Manga blogger Deb Aoki talked to Digital Manga Publishing CEO Hikaru Sasahara about his plans to change the way the manga licensing industry works, and it has broader implications than are immediately apparent.
Sasahara has created a Digital Manga Guild, in which amateurs would translate and edit manga with no upfront payment but would be promised a cut of profits should the book sell. What makes this less exploitative than, say, the Bluewater Comics model is that both the American and the Japanese publishers would also wait for their cut—no one gets paid until the books are sold. (Nowhere does Sasahara mention the production and printing end of things, but I'll bet the printers get paid up front.)
The problem with the current system, Sasahara says, is cash flow: The Japanese licensors demand a minimum of "several thousand dollars" up front, and then the company has to pay translators, editors, and other staff when they complete their work, so the company ends up spending quite a bit before the books ever reach bookstore shelves. What Sasahara is looking for is nothing short of a complete inversion of that system, with the licensors allowing their books to go overseas with no guarantee, and the editorial staff getting no pay as well. That would be a fundamental change in the industry that could have wide-ranging implications—or not.
To put this into perspective, Digital is a small company but they operate a bit differently than most U.S. manga publishers. Almost all their books are yaoi manga, and most of those are one-shots rather than series. Their sales, as far as I can tell, are very consistent and mostly in the 3,000 to 4,000 range. Yaoi manga, which feature romances between two men, are a lot like Harlequin romances, and the audience has always struck me as similar as well—they are willing to read widely within the genre, so the business not dependent on a few big sellers. There is no Naruto to prop up the line, but there also is no critically acclaimed manga that sells poorly and needs to be propped up.
Since the beginning of the manga boom in the U.S., the Japanese publishers have held a lot of the power. They are big companies and the income from overseas licenses has been a small part of their income stream, so there isn't much incentive to play nice with licensees. That's changing, though, as the Japanese manga market softens and smaller companies start looking overseas as well.
Sasahara was smart enough not to go to the big publishers with his proposal. Instead he went to small publishers who probably have little to lose and everything to gain by adding another income stream. Of the 25 or 30 he approached, six have given him verbal agreements to go ahead. Most publish yaoi manga (male-male romances), so they fit into Digital's line. If, and this is a huge if, the books are good quality, they will probably do well. If they are noticeably inferior, or the translation is awkward, they won't. My observation is that you usually get what you pay for, but again, this may be the exception: Digital will probably be tapping into a pool of experienced scanlators who have been doing this work all along for love rather than money.
If Tokyopop tried this, they would be denounced all over the internet, as they were for their manga competitions a few years ago. Digital may pull it off, because their readers are older and they have a better rapport with fans. (Some scanlators are afraid this is a trap to get them to reveal their illegal work and get them in trouble; if it is, it would be the stupidest move in the history of publishing, and I don't think Sasahara is stupid.) One key part is absolute transparency with numbers: Workers will be able to track sales themselves.
What remains to be seen is whether this strategy will work well enough to percolate up to the bigger companies. Translators and editors have never been well paid, and there is always economic pressure to pay them even less. Hobbyists can afford to work for free and the promise of a possible check somewhere down the line, but professionals can't. As long as the Digital model is applied to marginal works that otherwise would never be localized, it will expand the market and make it healthier; if it becomes the standard model in the upper strata, however, it could be damaging to professionals and fans alike.