Earlier today, Anime News Network reported that FUNimation acquired the domestic rights to Ghost in the Shell Arise. The company will release the title in a limited edition Blu-ray featuring Japanese audio and English subtitles. The release will be bundled with the imported Japanese O-card, film strip, and an English-translated art booklet. The run will be limited to 2,500 units, and will be released prior to the standard English-dubbed release. FUNimation also announced that they will screen the first two episodes in a limited theatrical run later this year.

The real take-away from the announcement, obviously, is that FUNimation is dipping its toe into the import pool. Previously, this market was dominated by Aniplex USA who, if one recalls, quickly gained notoriety for their expensive imports of titles like R.O.D The TV and Fate/Zero. The company’s approach to the market quickly gained the ire of budget-conscious customers, who argued that Aniplex’s scheme was both unrealistic and exclusionary.

At the same time, Aniplex sold out each run, and clearly posts enough profit to justify its current model.

In previous articles, I’ve mentioned that Aniplex thrives in its limited market because they cater to a valuable sub-niche. By becoming the broker for imports in the American market, they quickly found a blue ocean of customers that were flush with cash. This is the import crowd – they’re used to paying sums that are unheard of in the American industry, and they view the prices set by Aniplex as a bargain in comparison to the standard import market. Aniplex’s prices are often a sharp discount over the Japanese retail, which provides an incentive for many importers to bite on their offering instead of just heading to services like CDJapan or Amazon JP.

Given that Aniplex is thriving in this uncontested space, it was only a matter of time before a competitor would arrive to bloody the waters. Personally, though, I didn’t expect FUNimation to jump into this space.

FUNimation, for the most part, has been one of the biggest factors in the reduction in anime prices over the past decade. They popularized the 12-episode boxed set, and have continuously pursued price-cutting collections like the Viridian collection and S.A.V.E. editions. They were early backers of DVD/Blu-Ray combo packs in the American anime industry, and they’ve taken every step to bring costs down both on their ledgers and at the register. Granted, this is often done at the expense of bonus features and sturdy packaging, which leads to more spartan releases overall.

Because of this, it’s not too difficult to see my surprise at FUNimation’s foray into this ocean. Due to their position in the market, the company is essentially obligated to release a title with of magnitude of Ghost in the Shell in a general release. If not, they face backlash from the core customer-base. At the same time, when they do deliver on a low-priced premium edition, the company faces the risk of cannibalizing its own sales. One could argue that they are different markets, but to argue that at least a portion of this group wouldn’t make a substitution for the lower-priced edition. This plays into the Blue Ocean Theory’s prospect of Value Innovation. Basically, value innovation is the intersection where the cost of a product and a person’s perceived value intersect. While some will find enough value in the physical extras and early release to justify the higher price, there will be others that will wait a bit longer to get the dubbed copy for cheaper.

FUNimation has a difficult line to walk with this release. If they price their limited product too high, they’ll alienate the audience they intend to attract. If they price it too low, they risk devaluing the general release when it hits stores. The potential rewards of a successful release are great. However, they may find that the risks are too great to work in their greater business model.