Earlier this month, Funimation completed its $ 1.175 billion acquisition of Crunchyroll, merging the animated megaplexes of Sony and AT&T and setting the stage for an industry disruption. The era of “great anime” has officially arrived.
Consolidation is the hottest trend when it comes to streaming services. Powerful players in the content world are folding in on their competitors like giant solar systems bending space-time in their direction. WarnerMedia Merges With Discovery; Disney acquired 21st Century Fox; Viacom merged with CBS. Sometimes these agreements have enough impact to attract regulatory scrutiny. The Ministry of Justice for follow-up AT&T on its plan to buy Time Warner in 2017, saying the resulting mega-incorporation would hurt consumers, but the the company prevailed. The acquisition of Crunchyroll by Funimation was also would be the target antitrust review after the agreement has been announcement last december.
Eight months later, FuniRoll will be around, although details are sparse on what it will look like. Sony Pictures Entertainment CEO Tony Vinciquerra gave a hint: “Our goal is to create a unified anime subscription experience as soon as possible,” he said in a press release on Aug. 9. Anime industry experts interviewed by WIRED say that Funimation-Crunchyroll, however, represents a big change in the size and structure of the anime industry, and a key footnote in the larger narrative of today’s streaming wars.
“The influence and activity of anime is shifting from the niche to the mainstream,” Tadashi Sudo, anime industry analyst and reporter, said through a translator. With Funimation-Crunchyroll on the horizon, he adds, “The balance of power in the anime industry in North America will change dramatically.”
For decades, the distribution of Western anime was the domain of gender-focused media companies. Funimation was founded in 1994 and launched its streaming service FunimationNow in 2016. Crunchyroll started as a streaming site in 2006. It was taken over by AT&T in 2014; Sony took a majority stake in Funimation a few years later. While other streaming companies like HIDIVE exist, Crunchyroll and Funimation have long been the major players in licensing television series from Japanese studios to Western audiences. They can offer an otaku-friendly experience, an ecosystem of forums, merchandise, and even animated news, as well as, most importantly, the simultaneous posting of episodes alongside Japanese cable networks.
More recently, however, as the international appetite for anime grew, traditional giants like Netflix, Hulu and Amazon have entered the licensing fray, gobbling up exclusive titles like bees, Karegurui, and Made in the abyss. Anime has become the third most requested TV subgenre in the world, according to data from Parrot Analytics. In fact, the firm estimates that the thirst for otaku could support 33% more anime titles and already, more than 190 are released each year. Between 2001, when Dragon ball created on Cartoon Network’s Toonami block, and 2019, the number of new animated series produced in Japan has grown annually by more than 50 percent. And it’s not just the Japanese who produce anime anymore; Netflix has paid millions in the industry with the ultimate goal of internationalizing the genre with talents from all over the world.
Crunchyroll and Funimation have had to compete with each other and with streaming giants like Netflix, not only for free time and anime fan subscriptions, but also for the rights to the most popular titles. For years, license fees have been inflated because of the mad rush to get into anime, says Shawne Kleckner, CEO of video and anime company RightStuf. “They were bidding to try to get the best deal. And very often, they bid too much. So when you have a consolidation, they don’t need to do it anymore, ”says Kleckner. According to Anime news network, a simulcast of “triple A” anime for North America could cost the licensee $ 250,000 per episode.