Tokyopop Restructuring Analysis

Originally known as Mixx, the well-known Tokypop is a company that licenses, publishes and distributes translated Japanese anime and manga as well as Korean mahn-wa and global manga. Stuart Levy, who still maintains position as owner to this day, originally founded the company in 1997. Tokyopop has since released hundreds of manga graphic novels in both English and German, including global manga and 'cine-manga' (manga styled graphic novels using images from animated shows).

A co-publishing agreement with HarperCollins Publishers in 2006 handed over the distribution rights for a portion of Tokyopop's inventory. Along with this came permission for Tokyopop to begin creation of global mangas based on HarperCollins Publishers' books. It was the largest corporate news heard from the manga-publishing giant until June 2008, when Tokyopop announced a restructuring of the company.

On June 3rd, 2008, Tokyopop representatives issued a press release stating that Tokyopop would be split into two separate companies. While one side will continues its lead focus on the publishing aspect of the company, the other, titled Tokyopop Media, will deal with the company's recent endeavours with its digital releases and comics-to-film division.

Along with the split came news that in the restructuring, Tokyopop would be laying off 39 of its (approximately) 100 employees.

"According to Stuart Levy, CEO and Chief Creative Officer of the TOKYOPOP Group, 'This reorganization is the right business move, but we are doing it with a heavy heart. It involves saying goodbye to 39 of the most talented, creative and compassionate people I've ever known. While it goes without saying, it's important to note that our restructure is not at all a negative reflection on them.'"

Stuart Levy will remain CEO and "Chief Creative Officer" of Tokyopop while also being in charge of the newly formed Tokyopop Media. Other remaining employees were promoted and shuffled to fill new and previous positions within the company.

Almost immediately the effects of the lay-offs were felt on online communities as the now previous Tokyopop employees came forward about their abrupt dismissals while other remaining employees expressed their disappointment over the losses.

As quoted by one of the editors from BLU (Tokyopop's boys' love imprint):

"This is a very unfortunate situation for us all and I'm close to tears right now just thinking about how I won't have Midorihebi here to help me out any more. She's done an awesome job the last 6 months or so checking the BLU emails and always being there to support BLU. She was so looking forward to representing us at Yaoi-Jam but those plans have been canceled now and Yaoi-con plans are also up in the air. Times are very tough right now and with problems in the bookstore industry, we're facing a lot of challenges. I don't know exactly how things will end up right now but I would expect some changes in the BLU release calender. Hopefully the changes will be minimal. We have had a lot of success selling our books on Amazon so I want to thank you all who support us even when you can't find the books in stores."

At Gia's blog, A Geek By Any Other Name, two of the employees laid off by Tokyopop gave readers a better idea on how they had been treated: given no notice and asked to collect their things and leave moments after they were informed they had been let go.

AnimeNewsNetwork reported that a production manager, manga editor, copy editor, graphic designer, sales, marketing, and public relations positions were cut during the lay-offs. It was also announced that Tokyopop would no longer be an exhibitor at the San Diego Comic-con International, one of the world's largest and most influential industry conventions.

Other results of the restructuring are the cutback of book releases, down to 20-22 releases a month. This equals to 80 titles being dropped from release schedules. Logic seems to dictate around the global community that books suffering from low sales will be those cut, a bulk of which from Tokyopop's line of light novels.

"The time is now for us to focus our publishing business to overcome current market challenges. Fewer releases will allow for less cannibalization at retail. At the same time, the opportunity is significant in the digital and comics-to-film space. As one of the largest comic book companies worldwide, we must adjust our overhead to properly execute this new business plan."

A letter was also sent to writers and artists currently under contract with Tokyopop, assuring them that their current projects are still on going and work should be continued. They were also told that new editors would soon contact some of them.

Recent events revolving around Tokyopop news and scrutiny also began earlier in May with the release of a contract for the company's Manga Pilot Program. The program involves potential manga creators submitting series' proposals for the possibility of pilot follow-ups, which would then be reviewed by community members on Tokyopop's website.

The self-proclaimed pact, written in a simplistic manner uncommon to most legal contracts, outlines the guidelines for submitting proposals while also laying out the legal rights that an artist would maintain. Immediately the contract sparked outrage among the online community who deemed the contract an unprofessional and disrespectful write up that blatantly informs potential artists and writers of the loss of rights for their own work upon submission.

"MORAL RIGHTS" AND YOUR CREDIT
"Moral rights" is a fancy term (the French thought it up) that basically has to do with having your name attached to your creation (your credit!) and the right to approve or disapprove certain changes to your creation. Of course, we want you to get credit for your creation, and we want to work with you in case there are changes, but we want to do so under the terms in this pact instead of under fancy French idea. So, in order for us to adapt the Manga Pilot for different media, and to determine how we should include your credit in tough situations, you agree to give up any "moral rights" you might have."

The full document can be read in PDF format at Tokyopop's site while a response to the numerous allegations and concerns can be read at Anime News Network, as submitted by the team behind the Manga Pilot Program.

While many fear that this restructuring direction could imply the loss of some beloved books, or too much dependency on global manga titles (placing them over the licensed series from Japan), it also could present a positive direction for the company.

With the business going in two different directions, both groups will be allowed more focus on their respective mediums and objectives. In recent years, with Tokyopop branching out to new formats and projects, it has (without reasonable doubt) begun to suffer from stretching itself too thin and often placed priority on products and services that didn't pan out, yet left other projects floundering.

As an opposite effect, fears also continue to mount that Tokyopop's focus may continue to divert entirely away from the books in place of their comics-to-movie plans and other related endeavours, especially in light of title cuts. With so much of Tokyopop's financial standing and reputation grounded in their books, it seems unlikely that this will be the case as of now. The cutting of books could hopefully lead to a quality over quantity situation, as opposed to the market saturation maintained by Tokyopop for so many years due to numerous titles and simultaneous releases.

The newly formed Tokyopop Media is also said to be in charge of Tokyopop's website from this point on, fostering the hopes that the site may re-emerge as a more functional and informative resource. The site currently suffers from disorganization, problems with user-uploaded pornographic content and distracting advertising ranging from clothing lines to the newest Shyamalan film.

While present attention of most now remains (understandably) on the lay-offs and title cuts, there remain numerous possibilities for the company, possibilities that right now only time will tell until more effects are seen. For whatever happens from here on out, Christopher at comics212 said it well that "A reorganization is considerably better than bankruptcy protection", a worry for some in light of recent events.

So at the very least Tokyopop seems around for the long haul, and now it's a matter of hoping they learn from past mistakes, pick up the strongest remaining pieces and move forward into more positive directions.

By Lissa Pattillo

Related Links:

• Inside the Tokyopop Restructuring [ ICv2 ]
• Tokyopop Splits into Two Companies [ ICv2 ]
• Tokyopop to Restructure - Update [ ANN ]
• Tokyopop to Restructure [ ANN ]
• Tokyopop Revamps; Cuts Titles, Lays Off 39 [ PWCW ]
• Tokyopop restructuring: early reactions [ MangaBlog ]
• Update: Tokyopop [ The Beat ]
• More TP developments [ Icarus Blog ]
• Thoughts on Tokyopop???s Contractions [ Comics212 ]
• POP! Goes TOKYOPOP [ Giapet ]
• More on Tokyopop Re-structuring [ TCR ]
• Tokyopop Reorganizes [ CWR ]
• I was about to defend Tokyopop, but??? [ Comicsnob ]
• BLU Takes a Hit [ Kuriousity ]

The original press release from TP via ANN:

Los Angeles, CA (June 3, 2008) ??? TOKYOPOP announced Tuesday that it has reorganized its North American business into two separate companies by spinning off its newly established comics-to-film and digital units into one new entity TOKYOPOP Media LLC.

As part of the spin-off and reorganization, 39 positions within the organization have been eliminated. The move will allow the company to align its publishing business with current book retail trends, as well as aggressively pursue growth in the white-hot comics-to-film and digital space.

According to Stuart Levy, CEO and Chief Creative Officer of the TOKYOPOP Group, ???This reorganization is the right business move, but we are doing it with a heavy heart. It involves saying goodbye to 39 of the most talented, creative and compassionate people I've ever known. While it goes without saying, it's important to note that our restructure is not at all a negative reflection on them. The time is now for us to focus our publishing business to overcome current market challenges. Fewer releases will allow for less cannibalization at retail. At the same time, the opportunity is significant in the digital and comics-to-film space. As one of the largest comic book companies worldwide, we must adjust our overhead to properly execute this new business plan.???

Two key executive announcements accompanied the reorganization. Group President & COO John Parker has taken over the publishing reigns at TOKYOPOP Inc. with veteran Director of Marketing Marco Pavia being promoted to Associate Publisher. Current Publisher Mike Kiley has been promoted to the key senior executive role in TOKYOPOP Media, reporting to Levy, who will helm the new company.

John Parker explained, ???After establishing our European operations, my next focus will be on increasing profitability by significantly reducing our annual output, focusing on the most successful continuing series, and most promising new titles. Marco will be instrumental in developing the upcoming line. These moves will show that, once again, TOKYOPOP is leading the evolution of the manga and graphic novel categories.???

Speaking about the growth opportunities for TOKYOPOP Media, Mike Kiley commented, ???There has never been a time better for a graphic novel based creative studio such as ours. Over the past three years, we have produced more than 25,000 pages of original comics/manga material, making us the North American leader in production outside of Marvel and DC. With the relationships we have established in the past year, TOKYOPOP Media is ready to move quickly into the comics-to-film and digital markets.??? Pointing to prominent successes in online video (www.youtube.com/tokyopoptv and www.myspace.com/tokyopop) and mobile, both Levy and Kiley are optimistic about the future. Levy added ???Our goal is for TOKYOPOP Media to become one of the go-to production entities in Hollywood by building global entertainment franchises across media platforms.???

As part of the reorganization, TOKYOPOP's Japan entity will be separated into two units--one under TOKYOPOP Media and the other remaining the TOKYOPOP Group's holding entity. TOKYOPOP's European operations will not be affected.

About TOKYOPOP??
Founded by multi-cultural media visionary Stuart Levy, TOKYOPOP is hailed as a leading youth-oriented entertainment brand and an innovator of manga creation, with a revolutionary artistic vision that transcends countless platforms. From the introduction of the first-ever extensive manga publishing program in North America, to the development of its manga-originated intellectual properties into film, television and digital entertainment, TOKYOPOP has changed the way teens experience pop culture. The company's global reach has expanded to Europe and Asia, with offices in the UK and Germany, in addition to its Los Angeles and Tokyo operations. With millions of fans logging onto the new social networking site www.TOKYOPOP.com, reading its books, which are licensed in 41 countries in more than 20 languages, and watching its DVDs and television programs, TOKYOPOP's award-winning catalogue of licensed and original properties has made the company a visionary in an ever-growing teen entertainment marketplace. Visit www.TOKYOPOP.com for additional information.