U.S. anime distributor and manga publisher AD Vision is no more. The company's assets (and an undetermined number of its employees) have been divided up among four separate companies: AEsir Holdings, SXion 23 (Section 23) Films, Valkyrie Media Partners, and Seraphim Studios. Section 23 will continue to service former ADV accounts and its list of titles will continue to be available to retailers although information on which specific ADV licenses will go to specific companies has not yet been made available.

“The anime environment itself is challenging, ” said Chris Oarr, former sales and marketing director at ADV, who occupies a similar position at the new entity, Section 23. Chris Oarr told PWCW, “We’re deep in a recession and there are changes in technology [that are affecting the market]. These factors really do impact home video sales. Nobody’s certain how it will play out.”

A pioneer in bringing anime into the U.S., the Houston, Texas-based AD Vision was one of the largest distributors of anime DVDs in the U.S. market. ADV also established a manga publishing arm in 2003, licensing such edgy series as Gunslinger Girl, the story of a government-run team of 8-year old cybernetically enhanced girl-assassins, Cromartie High, a comic manga about a high school for delinquents and Yotsuba&!, a heartwarming and goofy story about a 5 year old girl and her interactions with her neighbors.

Like most anime distributors in the U.S., ADV struggled in acquiring licenses and maintaining their audience in a changing media landscape and a highly competitive anime home video market. Last fall, the licensor lost 30 properties when its relationship to their Japanese licensee, Sojitz, soured. Meanwhile, publishing delays plagued the company’s manga division and ADV’s American edition of NewType, an English language version of a Japanese-style anime and manga magazine, folded after 6 years of publication in the U.S.

The disintegration of ADV mirrors the struggling U.S. anime market. Fellow anime licensor Geneon shut it’s doors in late 2007; Bandai Entertainment has scaled back its releases; and Central Park Media, also a pioneer in bringing anime to the U.S., filed for bankruptcy this summer. With the overlap in audiences for anime and manga, will manga publishing in the U.S. follow suit? “It’s just like in manga where the franchises at the top are going strong.” Oarr says, pointing out parallels to a manga market where major series like Naruto continue to rack up impressive sales while it becomes more difficult to launch new material unfamiliar to fans. “You’ve got Naruto—that’s a juggernaut that drives the bus. But there hasn’t been a phenomenon like that in a while, ” Oarr said.

Oarr said that the rapid sales growth of manga in the American book publishing market has hurt its own prospects. “Five years ago, there were megahits; but the top ten percent wasn’t that removed from the next ten percent, ” Oarr said, noting that selling through ten thousand copies of any decent manga was normal. Now, however, “it’s so hard to break from the pack. A lot of licenses now will sell through five to six thousand copies.”

Piracy continues to be a factor affecting both the anime and manga market. Both manga and American comics are scanned and uploaded to the internet, often undermining sales. Indeed anime publishers have long had to compete with fan subs, pirated Japanese-language anime releases translated into English by fans, uploaded to the web and available for free download. But Oarr remains confident that the market will rebound. “DVD’s are not going away tomorrow, ” he said. “They’re still far and away the prime mover for consumer sales of video entertainment. And it’s going to be that way for a long time. It's the same with books. The Amazon Kindle isn’t eliminating books. Books are still a good business to be in if the product is good, ” Oarr said.

Oarr is optimistic about the prospects for the new post-ADV company SXION 23 and the opportunities for distributing new anime licenses going forward. “We’ve learned how to manage things efficiently, ” he said. Despite the market problems and financial stumbles of ADV, Oarr said, “The sales opportunities are out there. We’ve figured out how to make money in this market.”