Soft On Demand quits Fanza: is the end of Fanza's JAV world domination near?

Perhaps approaching a decade now, the JAV industry has been rather stable structurally. Individual studios may come and go (but often changing only the logos), but there's an understanding if not explicitly written code of conduct. Agents (and scouts) recruit and manage talents, studios produce films which are packaged as DVD, Blu-Ray or digital (download or streaming) and sold on DMM/Fanza, plus Amazon's a minor competitor to DMM, and street shops. But it shouldn't surprise you, it isn't always stable. And we might be, right now, witness a historic moment: the shake up of the distribution hegemony that we all know and love and hate as DMM/Fanza. The only major evolution in recent years is the post-scandals reform (delistings) and fading of uncensored industry. 

At the beginning, VHS rentals were dominant, which gave way to DVD rental and later DVD purchase became the norm. And then street corner shops gave way to online giants, eventually DMM/Fanza had a lock-grip on the industry and digital releases finally overtaking physical media. For distribution and retails it's pretty much unthinkable to bypass DMM entirely. It achieved this by having their parent organization, WILL, spawned or swallowed up many of the top and/or biggest studios, including S1, Moodyz, IdeaPocket, Premium, Wanz Factory, E-Body, Oppai, Fitch, kawaii*, Attackers, Hunter, Madonna, and the list goes on and on. It might actually be easier to make a list of JAV studios not in the WILL group. WILL's studios mostly make their titles exclusively on DMM. Keeping an account on DMM for their exclusive titles is, therefore, virtually compulsory for fans. With a monopolistic position of strength in retail distribution, DMM can pretty much tax (rumored to be around 70%) the studios to the brink of starvation.

Just more than a year ago I bought you the story of Faleno. The entire industry was watching. They were wondering if Faleno would survive, or thrive, or surrender, or just fold up and disappear without a whimper.  Turns out Faleno managed better than mere survival, they even managed to spawn a second studio Dahlia, formally achieving the status of a (minimalist) conglomerate: a streaming platform, multiple studios and multiple labels. A huge factor, not at all obvious from the beginning, is that WILL’s empire doesn’t extend to the agencies. Many top agencies allowed their established top idols to sign onto the unproven upstart, well a very well funded upstart. This continued to happen as both established talents and hot new recruits are (seemingly) fairly split between different studios, quietly admitting Faleno to the old boy club of top studios. The sustainable growth may not be spectacular, but now looking back, and remembering Japanese business world aversion to rocking the boat, what happened is downright remarkable.

Now what comes next may not be a direct result... but one wonders... In Feb 2021, Prestige withdrew from Fanza, overnight taking away their future, current and past titles.  It was so unexpected that Pretige's new releases faded from my own radar screen for months, because most of my browsing and research sites failed to adapt to the disappearance of Prestige titles from DMM platform. (the Prestige, First Star, and Maxing covers below don't link to R18, because they are taken off R18 along with Fanza)

The declines of all empires don't look like crashes, but more like the rusting away of a giant ship. No one could understand what's happening in front of our eyes. Sure "many" studios soon followed suit but all of these minor studios (with a tiny exception being First Star) added up to nothing on my radar screen. Until Maxing also joined the exodus. But still, I dismissed it, Maxing's best days were long in the past. It was still too early to count the final days of DMM hegemony.  

Now a second big player has served notice: SoftOnDemand has withdrawn all new titles (released in and after July) from Fanza, and customers who preordered SOD's October releases have received the cancellation notice.  But unlike Prestige's withdrawal, this current motion wasn't formally announced or explained by either DMM or SOD. After some inquiries by fans and industry watchers, it only came out via "unnamed sources" that indeed it was a withdrawal rather than a, say, computer/human error. However, the two sides are still in negotiations and the lack of formal announcement means that no permanent decision one way or another has been made. It's actually quite possible one day next week the SOD titles would be found on Fanza again as if nothing had ever happened. Or... maybe, just maybe, neither side would budge and SOD will fully withdraw from Fanza, taking its huge 26 years catalog off the platform. (notice the below SOD titles don't include their latest releases)

In retrospect, it's not a surprise that Prestige and SOD are the first two major players to moves against WILL. As mentioned in Part 2, they were the two studios that agreed to provide content to streaming provider H-Next (Faleno's parent). SOD's cooperation with H-Next grew quietly and deeply. On one hand, SOD contents are streamable on H-Next, on the other hand, physical copies of Faleno's productions are sold on SOD's website (an until-now forgettable challenger to DMM). SOD and H-Next/Faleno aren't exactly in bed together, but there could well be an unspoken conspiracy between Prestige, Maxing, SOD and Faleno to erode DMM's hegemony. 

Are more non-WILL studios going to join the revolt? Perhaps, but I think WILL/DMM/Fanza has started noticing.  One hint is that SOD's move isn't final yet and active negotiation is still grinding. More likely, the SOD issue will resolve soon, one way or the other. But I'm going to guess that the next major moves won't be visible for a while. Fanza must do something to halt the exodus, the easiest (and perhaps painful) thing to do is cut their tarrif on the retail operation, this is the single biggest hurt. Fanza cannot suffer another major player exiting, already the fandom has become skeptical of the daily, weekly, monthly and annual idol and DVD rankings made by Fanza. That is, there were mumbles about the veracity of the rankings even before Prestige's exit. Now if Faleno, Prestige, Maxing and SOD are all missing from the statistics, would anyone even care about the Fanza ranking? Once you give up the superpower status, everything could become 10x more difficult and less profitable.