I would have had this up before midnight, but for some technical difficulties! I swear!

Anyway! Shawne Kleckner, the owner of Right Stuf and Nozomi Entertainment, generously spent some time with me this weekend to chat for a bit. He dropped some hints about what we might see from Nozomi in the future, talked about the industry’s current and future states, and even reminisced about some of his favorite anime merchandise from years past.

So, without further ado: hit the jump for the full interview!

GM: It seems clear that Nozomi has had some success on producing sub-only DVDs and you’re continuing to release series in that fashion…

Shawne Kleckner: In terms of some of our releases, what we really look at is just basic economics. You have to figure out if you can put the product out in a way that is going to make economic sense. Emma, for example, is an absolutely wonderful show, but the market for it is pretty slow, so if we’d gone and put a dub for that title it most likely would have lost money. At the same time, that doesn’t mean that the show isn’t worth bringing over, and there’s certainly a fanbase for it and it’s actually been doing very well for us. So it realy comes down as we acquire or look at properties: do we think we can take that property and put it out in an economic form?

We look at each property and if we think we can put a dub with it and have it be a breakout hit, or we think it’ll sell enough units and be more of a mass-market series, then we’re going to dub it, like we dubbed The Third, which has a strong female heroine and a great sci-fi storyline. But we haven’t done that with some of our sets, like Aria, which I think will have a very niche appeal but which has a great fanbase that we want to support.

GM: And Maria-sama ga Miteru (Maria is Watching Over Us)? A lot of my readers were really excited about that.

SK: Yeah, there are three seasons of that and they’re making a fourth, so it’s definitely a show that has an appeal…but is it an appeal that I can get into Best Buy on the shelf? is the question. Sometimes it’s a difficult decision because you just don’t know, but I was reading an interview online last night that said that we should take the chance and then we’ll know. And FUNimation took Shuffle! and it was a huge hit. But FUNimation has more resources than we do, so we have to play things a little more safe.

GM: How do Right Stuf and Nozomi work? Do they share funds, do sales on Right Stuf fund licenses for Nozomi?

SK: It’s one company. What we did last year around our 20th anniversary (July 31st last year), to celebrate we sort of split up the branding. The company has always been Right Stuf as a whole and will always be Right Stuf as a whole. But there’s some level of confusion between the publishing stuff that we publish at Right Stuf and the store Right Stuf. So we tried to take Right Stuf and use it as RightStuf.com and use it as the store brand and we created the Nozomi brand to support our production and releases. It’s more to eliminate customer confusion than anything else.

In terms of does one fund the other? Of course, it’s really just one company.

GM: You’ve been doing really well with the sub-only releases, do you think we’ll see sub-only online-only releases without brick and mortar stores at all?

SK: I suppose that’s possible, or a combination of both. What I really see more than anything else is you’ll probably see properties– and I know this is what a lot of the market is looking for, is same-day with Japan, but that’s very difficult because a lot of the time the stuff is delivered only a day or two before the broadcast, and there’s just no time to sub it and get a translator and get a license done and all that other stuff. What I think you’ll see is a combination of the two, a DVD that’s sub-only and then maybe the episodes themselves available individually in downloadable pieces. That serves both markets; that allows the customer that really cares about the packaged media to get that property and be able to consume it, and also the people who don’t care to have the packaged media to consume it as well. So I think it’ll be a combination thereof, whether it’ll be iTunes or on site.

GM: You have stuff on iTunes?

SK: Not directly, but that will change soon. We have some streaming, we have some online episodes, so…we’re developing our Internet strategy. The nice thing in terms of packaged media is that you can go further with that than the online stuff. I’ll give you a great example, our Emma release. That nice 96-page booklet? I probably couldn’t post that online for download. So there’s some level of value to being able to consum packaged media.

GM: Speaking of swag…Bandai Entertainment has done will with their expensive premium editions. Do you see any of that in the future?

SK: We’ve done some of that, like our Ninja Nonsense box set that came with a squishie*, so we’ve done some of that. We did puzzles with our release of The Third box, so there’s some value-add there. So it really comes down to the licensor, and whether the rights are available and whether it can be done economically and so-forth. Some of these titles…clearing the rights up is a bit of a challenge.

GM: When did Right Stuf start licensing titles and why?

SK: The licensing started first actually. The company was started in 1987 and was originally founded to sell high-end telescopes. The name “Right Stuf” is a play off the old movie The Right Stuff about the Mercury 7 astronauts, so we didn’t really start out in the anime business, we started out with these high-end telescopes– and they were really expensive telescopes. But one gentleman I worked with at the time was a big Astro Boy fan, so, Astro Boy not being available and the video industry being very nascent at that time– we’re talking late 1980s, it was mostly rental-oriented –we went out and licensed this property and then went on a search for the materials, because the company we licensed it from did not have any of the materials we needed. So that was really our first license was Astro Boy, the original 1963 TV series.

So the business started on the licensing basis with this nostalgia program…it just happened to be a nostalgia program of Japanese origin. From there we went to Gigantor and Kimba the White Lion and so on. What we were finding in the late ’80s when we were trying to market these releases, the video industry being in the position it was at the time, we couldn’t get the rental shops to pick up the sets. So we started a mail-order division to sell the Astro Boy tapes to consumers. As time went on other companies started releasing products– Streamline entered the market, AnimEigo entered the market, and we started grabbing their releases and that is what started the Right Stuf catalog. And we were a mail-order operation for some time when the Internet really started burgeoning in the mid-90s. I think we were the first anime retailer with an online process, and there’s some wayback machine stuff where you can look back at the original pages, and it’s absolutely horrid…we were all on really slow dialup and had to deal with that, and…but to answer your question, being a licensor was our purpose, it’s not something we decided to get into after the store was founded, we started licensing nostalgia products and the mail-order piece came and that version became the Internet store.

To tie into our announcement from yesterday, the first non-nostalgia product we licensed was the original Toward the Terra in the early ’90s, and we released it on video cassette, so we’re really going back to our roots with this announcement. With the release of the new series from Bandai Entertainment, it was just time to bring that product back. Plus the Japanese have recently remastered the property so we have access to all of the remastered video, so I think it’s going to be a really good release.

GM: You’ve released a lot of your older titles on DVD already, are you planning on doing some more of that or licensing more oldschool titles?

SK: If we can do it economically. Certainly, we’re always looking at whatever we can do to serve the fans.

GM: And are you looking at Blu-Ray?

SK: At some point. But really at the moment with the stuff that we have…Blu-Ray is a very expensive format still in terms of operating costs and so on; we have a couple of titles which are suited to Blu-Ray and we do have masters that we could probably work with that, but as soon as we can get to a point where the number of units we would sell would justify the cost…I think it’s coming, but I don’t think it’s going to come in the short run.

GM: What is Nozomi doing to stay competitive in terms of fansubs and low sales?

SK: Our company is very fan-oriented. We have a group of fans working on all of our properties and as such I think that they’re a bit more well-versed in terms of what we can pick up as properties that are maybe overlooked by other parties. Also because we’re a smaller company it costs less for us to turn on our operation than one of the larger companies. So in some ways I think that gives us a strategic advantage; we can take a property and bring it to the market that one of the other companies might not be able to do properly.

But…fansubs are a problem, they’re going to be a problem for the industry, there are still people that do not understand that although yes, they are getting the titles they’re looking for, they’re making them unprofitable for anyone to bring over, or simply unlicensable, period. When they grab those fansubs the creators get absolutely nothing. Fansubs are so much easier to get than they used to be– it used to be, you have to send out a tape by mail to your friends. But now it can be taken out of one place, and you only have to have one seed to get it all over the Internet.

In terms of that, I would agree with what [FUNimation marketing director] Lance Heiskell said at the “Death of Anime” panel the other day: there needs to be more focus on education, and explaining exactly how this works and how that affects the creator and how it works with everything else. I think there needs to be some view on how we can provides value to the customer in a way that they’re more interested in picking up the property or downloading it through legal means that we can present, it’s an issue of access I think. And I think the third thing is enforcement, and I would agree that it’s very difficult to keep the material from coming out. And when you do there’s an amazing backlash, even though all you’re trying to do is keep your lights on. It’s so important to be able to generate revenue, we’re not in this as a hobby. But who wants to be in that position? Who wants to sue the consumer of your product? But at the same time, the consumers are effectively killing the market.

And it’s not just fansubs. People say that the companies are complaining but they keep licensing properties and they seem to be doing okay and making money…but have they been watching this convention? It is hurting. But that’s not the only piece of the problem; fansubs are an issue that hurts the market. Another is the general overall economy. Another is the fact that there’s so much entertainment content out there to compete with, whether it’s Warcraft or the new box set of the latest TV series. I think the last piece of it is access. How do you get the concept to the customer in a way that they wish to consume it? The customer wants to consume that bottom line and if you don’t find a way to do it then you need to fix it.

GM: Gen mentioned that a lot of it is the Japanese companies that refuse to sort of change their mindset.

SK: Yes. The Japanese companies are way behind the ball when it comes to rights that are non-DVD. The market has changed so quickly and they’re just not picking up. The other problem isn’t necessarily the company you license from– it’s all the companies that sit on the title. It’s not like it used to be. You go back 15 years, there was a company that financed the title and that was the company you worked with and they dealt with it all. Now it’s “X Production Committee,” which is probably 20 or 30 different companies, the authors and the agents and the guy who controls the music rights and ALL of those rights have to be cleared. You can’t put the product on the Internet without clearing the musical rights, mechanical rights, the story option rights…every one of those pieces has to be cleared. And that’s a challenge. And if it’s not done on the front end, guess what happens? Your company has to go back and negotiate with every single one of these parties, and they all want a piece of the pie, even if there’s no pie to be had. So it makes it very very difficult to get the material for some of these new media rights.

GM: Are you acquiring digital rights with every property (a la FUNimation)?

SK: Absolutely. We will not acquire titles without the digital rights, which puts you in a bad position because sometimes you’re working on a title and they say those rights aren’t available, and you almost have to pass. Because in this modern era…licenses run from 5-7 years, and during that term you’re going to need those rights, especially now.

Let’s say I want to license a property to television. Almost all television companies require the Internet rights on the same title so they can broadcast it on their website. So now you can’t make any TV deals because you don’t have those rights, and it becomes a real issue.

GM: Let’s move into fun questions. What’s the worst question you’ve ever been asked at a panel at a convention?

SK: Oh, wow. I get so many bizarre questions. I love doing panels, I think they’re so much fun and I try hard to leave big Q&A sessions. Sometimes it’s funny when people come up and ask questions about something I already said in the panel, that makes me laugh. The most bizarre questions are the weird personal questions, like what’s your favorite food. Or what you had for dinner last night. But at the same time…I enjoy working with the fans. I publish my e-mail address online and I get e-mail from everyone under the sun. Now unfortunately some people think that means that I can become their personal customer service rep and that’s obviously not going to happen, but I don’t mind the interactivity with fans, I like getting the e-mails saying people are happy with the store, I bought this and saved money. Or hey, I hate you because you take all my money and you suck.

But I’m a big subscriber to the concept that if you’re in tune to the customer base that you serve, you’ll be successful.

GM: I thought about asking you what your favorite ice cream was.

SK: Hmm…probably chocolate.

GM: What about conventions? Do you like big ones like Expo, or smaller ones?

SK: With my schedule I don’t really get to go to a lot of conventions, it’s hard for me to hit a lot every year. I’ll generally hit Anime Expo or a couple of the larger conventions, Comic Con or New York Anime Festival or Otakon. I don’t have a favorite but I do try to attend at least a couple every year, and I have other staff who attend other ones.

But let me answer a question you probably don’t have, about why we never have a booth at conventions. I don’t have a booth for one purpose: if you have a booth, you have to be there. I have any number of people that we sell product to who are selling at this show, and I don’t need to compete with them. I want them to be successful, that’s why they’re in business– they can go to all the conventions I can’t go to. I like to be able to go to these conventions and interact with the fans and I can’t do that if I’m stuck at the booth.

GM: Gakuen Alice and Toward the Terra: if you could only buy one of them, which would you recommend?

SK: That’s not a fair question, come on. If you’re a sci-fi fan, then yeah, I’ll say buy Toward the Terra. If you’re a comedy fan or you like shoujo properties I’d say Gakuen Alice. I think both of them are a very good value; we’re only asking $50 SRP on the 26-episode TV series [Gakuen Alice]. The remastered Toward the Terra, $20 for a 2-hour movie? I think that’s really reasonable. Obviously with discounts online that’ll be lower. That’d be a tough call…if you’re asking me personally I’d buy Toward the Terra because I have a lot of nostalgia for it, being the first non-nostalgia title we have. I actually have the movie poster hanging in my house.

GM: Now, Tpop is promoting Gakuen Alice a lot– are you doing any work with them?

SK: I understand that Gakuen Alice is one of the series that will be ongoing, so we’ve been already been talking about all kinds of cross-promotion and I’m sure that there’ll be lots of discussion. And we’ve done the same, they’re publishing the manga for ARIA…

But that’s not a fair question!

GM: Well, I have to think about it– I get paid well, but not that well! How do you get all those amazing discounts, like the ones on the Haruhi box sets?

SK: It’s…it’s magic. Let’s just leave it at that. It’s the Dark Lord magic.

GM: What is your favorite product you’ve ever carried that wasn’t a DVD?

SK: Wow, you ask some interesting questions. Favorite product that wasn’t a DVD. I gotta think about that…do you have any other questions while I’m thinking?

GM: Sure, this is one I asked Gen…more of the manga companies are looking at working directly in the US, but it’s been kind of hit-or-miss in the anime world, if you look at Bandai Visual USA and Gonzo.

SK: And Toei, which was a monster failure.

GM: Do you think that’ll scare companies off, or might we see more of that?

SK: It’s hard to say. Like anybody, you want to control as much of the market as you can, and I understand probably why they were trying to do it, but…I don’t pretend to understand how the Japanese market, and that’s why I don’t sell in Japan. I think the Japanese have to look at finding somebody who understands this market to sell their products, because the markets just aren’t the same, as much as licensors would like to think that in Japan they pay this much for a DVD so this is what they’ll pay in the US. A great example of this is that moe is enormously popular in Japan, but it’s not working here. Not at all. Magical girl stuff did really well in Japan; it really fizzled here. It’s just not the same market.

I think that if you get outside of your core confidence, you’re cruisin’ for a bruising. [Laughs] And I think that’s why most Japanese companies are backing off a little. Now in the online arena that might be a little bit different– they do have the ability to reach out to fans with high quality material, but at the same time when you build a brand, there’s so much more to it han just downloading an episode online. The fans want a package, they want to get the episode, cosplay as the character, buy the manga, buy the merchandise, buy the t-shirt, and have a social community where they can work and hang out with other fans that are fans of the product and discuss it and share it with their friends, et cetera.

That’s one of the things that makes the online business a little more complciated in my opinion; if you want to go share stuff with your friends, it’s a lot easier to take a DVD to your friends than to figure out how to hook your computer up and everyone sits around the computer screen, and…that’s one of the reasons why I don’t think DVD is dead. There’s been a lot of talk at this convention that DVD is dead. I sell a lot of DVDs. I still sell a lot of DVDs, I think next year I’ll still be selling a lot of DVDs. We can supplement that with other mediums and over time I’m sure you’ll see some shift, but still, the core business of every publisher at this convention is DVD. It’s a convenient medium, it’s an economical medium, and I just don’t see that changing any time soon.

Maybe I’m just oldschool, I just don’t like watching stuff on my computer. I can watch a panel or a transcript but if I’m going to watch a 30 minute show, I really like to sit back and watch it on TV.

GM: Do you think there might ever be a package deal where you buy the package and get the downloads right away while the DVD gets shipped to you?

Yeah, I’m sure you’ll see that soon. [Laughs] Okay, I’m still thinking about this [question about the merchandise].

GM: How about that DVD that came with panties?

SK: Oh yeah, Najika came with panties. I Give My All, the CPM release that never did come out, that was boxed with panties…but that was never released into the market.

Merchandise-wise…are you asking my favorite, or the most bizarre?

GM: Either.

SK: Bizarre would be the otaku soap. ADV had the otaku soap, and honestly I thought it was the funniest thing ever.

GM: It sounds like something they should give out at conventions.

SK: I think they actually did hand them out at conventions. It was a little bar of soap with a little robot inside it. So you could use the soap and then the robot was a toy that you could keep. I just thought that was funny.

In terms of neat stuff…there’s been a really nice variety. I like for example the lithographs that FUNimation has been putting out, they’re really nice, really high-quality prints.

GM: Kinda like cels back in the day.

SK: Yeah, there just are no cels anymore…fans probably could go back to the Escaflowne box sets that I had to take 14 years to get rid of. But there’s been some very unique merchandise. I enjoy the plushies, I loved our Kumaguro plush [from Gravitation] for example. I think a lot of the people who bought that plush didn’t know what the series was, and I think that introduced a lot of people into that show. Gravitation’s great, I think it’s a great show.

But I guess if you’re looking at the most bizarre, I’d go with the otaku soap. But obviously merchandising…the anime market at the moment in my opinion is very severely under-merchandised, and that’s something that I think we could do better on as an industry. There’s heavy merchandise for Dragon Ball Z and there’s heavy merchandise for Fullmetal Alchemist, Naruto, but there’s hardly any merchandise for anything else, except a select wallscroll from time to time or a plush.

GM: You’re referring to US-produced merchandise?

SK: Yeah, the stuff that’s being produced in America. Now there’s all sorts of stuff that I suppose you could import, but it’s not things that fans have an easy access to, going back to the access concept I was talking about before. How do the fans get some character goods from Shuffle!? They’re just not available. And if they want character goods from Buso Renkin, I don’t think those are available. You have a limited access, and to me…how do we get the customers interested in that? Because they can’t download that! There are no fansub plushies.

GM: But there did used to be a lot of knock-off merchandise, which I don’t see as much of anymore…but I remember there being a lot for Sailor Moon.

SK: Oh, there was.

GM: One last question: Dark Lord? Where did that come from?

SK: [Laughs] I don’t honestly remember 100% where it came from, and we’ve just run with it because it’s so funny. I think what happened is on the AoD forums, David Williams always went by DLW, and for some reason somebody started putting a “DLK” for me, and then it was “Dark Lord Kleckner,” and I just thought it was funny so I ran with it, and then it just kind of blew up to the point where…it’s the license plate for one of my cars. It does make me laugh.

GM: My license plate is GIAPET, so I understand.

SK: There’s nothing wrong with that! We’ve kind of built behind that the whole Star Wars motif– we have a lot of Star Wars fans in the office. Kris [Kleckner], who heads our production department is an enormous Star Wars fan, and they’ve built pictures of me in Star Wars attire, and that’s when all the characatures started, and every sale seems to have a new one. Apparently this week I’m Captain Jack Sparrow in the clearance sale. Some of them are kinda embarassing…the bunny rabbit one they did for Easter one year was, uh…quite interesting. But I enjoy it, I think it’s fun and it gives a personal face to the company, and I have no problem with it. I can make fun of myself just as much as everyone else, and I think that’s fun, and I think that people enjoy the back-and-forth with it and get a kick out of the fact that it’s more of a person tha they can associate the company rather than a place that takes their credit card number. And personal service is really one of the things that I pride our company on.

We’re not always the cheapest and I know that, and there are places that sell cheaper or for nothing and so on, but we have a weekly customer service meeting and we go through anything we have as issues, and we make mistakes just like everyone else– I employ humans and they make errors –but our people are genuinely concerned about trying to take care of the customer. If you need to get us on the phone we have our 800 number posted clearly, unlike a lot of websites where you can’t find an 800 number to save your life. We do answer all of our e-mail…it’s a service-oriented approach and I think that’s really important, and that over the course of the last ten years that’s been lost by way too many companies where they focused on eliminating headcount or sending people overseas and providing support in a way that doesn’t really provide support, and I just don’t believe in that. It costs us a little more money to do that since I have to employ more people to handle those support issues and to make sure that we get all the e-mails answered promptly and the phone answered, but I find it incredibly important and it’s one of the things I’m really specific about, making sure that our people are constantly focused on that.

Tags: ax08, nozomi, right stuf

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