RIAP Writes

More Than You Ever Wanted to Know About Licensing Anime in the U.S. (continued)

Case #2: The title finds the company.

The other way for titles to be licensed is that an established contact will approach the company with a title, or a package of titles, for licensing. In this scenario, you get to skip steps 1-5 above, but there is the replacement step of negotiating the dollar figures.
Package contracts can be a mixed bag with both positive and negative results. For example, LA Hero offered the following contracts to Books Nippan:

GUNBUSTER (Volumes 2&3), APPLESEED, BLACK MAGIC M-66
GIANT ROBO, AMBASSADOR MAGMA, UNTRAMAN (Live Action & Hanna Barbera Feature)

Obviously some contracts are worth more than others...
While these answers address the actual process, I have yet to provide any insight into the decision making process that determines which titles are actually sought and obtained in licensing agreements. The answer to this is fairly complicated because it involves not only legal issues but economic and psychological issues as well.
A title must not only be legally licensable, but the company must have the money to pay for the rights (not to mention man-power to produce the product), and the show must fit in with the companies philosophy or principles of what that company considers successful titles.
For example, Manga Entertainment seems to be focusing on the violent feature films and would probably have many other titles in mind before it looks at a title such as MARMALADE BOY (a shojou soap opera) even if it was in their price range. Other companies may decide that they are not interested in the long term commitment and financial investment it would take to pick up a television series, even one the quality of ESCAFLOWNE unless it could be picked up at a bargain rate.
Which leads to the fact that anime titles are rapidly inflating in value, and a title that may seem like it should be moderately priced, may in fact be exorbitant. With the increasing interest in anime in the USA and internationally, the cost of rights is increasing.
Take RAYEARTH for example. While I have not personally bid on the rights, I would estimate that the rights for this show are as expensive, if not more expensive than EVANGELION because of the following factors:

RAYEARTH is a longer series, and a minimum guarantee is frequently based on a per episode basis.
RAYEARTH was an extremely popular TV series in Japan, so the expectation will be that a top dollar will be paid for the rights...I picture the producer saying something like "but DIC paid that much for Sailor Moon..."
RAYEARTH is created by CLAMP, one of the hottest manga teams in Japan.

Each of these factors inflates the cost of this series, possibly out of the price range of the US Anime companies who, for cash flow reasons, prefer to release shorter series that cost less, or that can make back the investment quickly. Another factor is that these companies may have already bought as many titles as they feel comfortable purchasing at a given time. For example, after picking up the rights to BLUE SEED (48 episodes), EVANGELION (26 episodes) and USHIO AND TORA (an OVA series), AD Vision may decide that they have invested enough money in long term projects and decide to pick up a few more quick OVA or adult titles. (At 2 episodes per tape, one tape per month, EVANGELION alone would take at least 14 months to release, assuming the project remains on schedule. You can do the math yourself for the others.)
Finally, add in the fact that major Hollywood names are showing an interest in Anime (Disney's deal with Tokuma Shoten for example), and suddenly, some license holders are waiting for more than just money — they want the big name licensors. A company might decide that they will wait for several years on a "maybe" from some Hollywood company that would give their title first class treatment — and I can't blame them. The average Hollywood feature has a $15 million marketing budget. A secondary level feature still has a seven figure marketing campaign, while our tiny little anime community is lucky to hit five figures on a good title. The companies know they can get the money, now they want the prestige.
So it boils down to more than just desires and decisions. An anime licensor gets what it pays for, and it gets what it can afford. If the company is smart, it will write a strong contract that gives it flexibility for future business. If the company is lucky, the titles will sell strong enough to fund half a dozen other trips to Japan to sign more contracts.