Funimation officially acquires anime streaming service Crunchyroll for $1.175B

Illustration: James Bareham/Polygon

On Wednesday, Sony Pictures Entertainment Inc. announced that AT&T and WarnerMedia agreed to sell Crunchyroll to Funimation. Though there had been rumblings of the acquisition for a few weeks, it wasn’t clear just how the deal would go down or if it would at all. The purchase price for the transaction was estimated by Sony to be $1.175 billion.

“The Crunchyroll team has done an extraordinary job of not only growing the Crunchyroll brand but also building a passionate community of anime fans. Crunchyroll’s success is a direct result of the company’s culture and commitment to their fans,” said Tony Goncalves, WarnerMedia’s CRO, in a statement. “By combining with Funimation, they will continue to nurture a global community and bring more anime to more people. I’m incredibly proud of the Crunchyroll team and what they have been able to accomplish in the digital media space in such a short period of time. They’ve created an end-to-end global ecosystem for this incredible art form.”

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“We are proud to bring Crunchyroll into the Sony family,” Tony Vinciquerra, Chairman and CEO of Sony Pictures Entertainment, added. “Through Funimation and our terrific partners at Aniplex and Sony Music Entertainment Japan, we have a deep understanding of this global artform and are well-positioned to deliver outstanding content to audiences around the world. Together with Crunchyroll, we will create the best possible experience for fans and greater opportunity for creators, producers and publishers in Japan and elsewhere. Funimation has been doing this for over 25 years and we look forward to continuing to leverage the power of creativity and technology to succeed in this rapidly growing segment of entertainment.”

At first glance, Sony’s acquisition of Crunchyroll from AT&T might put them in a better position to compete with Netflix, but the move actually grows their influence over Japan’s anime industry. By adding Crunchyroll’s 70 million free members and 3 million paid subscribers to their portfolio of anime streaming and production companies, the company intends to reap the rewards of anime’s growth overseas, which in both 2017 and 2018 grew to nearly half of the industry’s over ¥2.1 trillion (about $19 billion) total revenue.

Although Sony’s move into anime streaming might seem sudden, the company has been involved in anime production for decades. In 1995, Sony Music Entertainment Japan (SMEJ) established Aniplex, a subsidiary created for managing anime and music productions. In 2005, Aniplex started its own animation studio, A-1 Pictures, which would go on to animate shows like Kaguya-sama: Love is War and Sword Art Online.

But over the last five years, Sony has strengthened its portfolio of international streaming services through acquisitions, starting in 2015 with the French anime streaming service Wakanim. In 2018, the company purchased the Australian anime distributor Madman Anime and its streaming service, AnimeLab. A year earlier, a separate subsidiary, Sony Pictures Television, acquired American anime distributor Funimation. Then, in 2019, Aniplex and Sony Pictures Television consolidated all of these streaming services together under Funimation’s name as a joint venture between the two subsidiaries.

Along with the announcement came a demonstration of how vertically integrated Sony’s anime business had become, as they revealed that episodes of the series Fate/Grand Order - Absolute Demonic Battlefront: Babylonia would have a 30 day exclusivity on Sony’s international streaming services before being available on other platforms. The English dub would have a year of exclusivity. The anime series was produced by Aniplex, animated by CloverWorks (an Aniplex owned animation studio,) much of the show’s music was from SMEJ artists, the English dub was produced by Funimation, and the series is based on a mobile game produced by Aniplex.

Crunchyroll’s billion-dollar acquisition price tag comes not from being the simulcast market leading streaming service, but from how it will expand Sony’s vertical integration in anime production overseas. Although Aniplex already has a North American distribution, game publisher and merchandising arm in Aniplex of America, the non-streaming parts of Crunchyroll’s business have expanded in many ways that Funimation and Aniplex of America had yet to.

Crunchyroll’s current line-up
Image: Crunchyroll

In 2017, the company launched its own yearly convention, Crunchyroll Expo, and has been the major sponsor of AnimeNYC since its inaugural event later that same year. They also began co-producing new shows like Kemono Friends, and Kino’s Journey -the Beautiful World-, before in 2020 announcing “Crunchyroll Originals” branding for shows produced in house. Many of these shows would be done in partnership with Japanese animation studios like MAPPA and Production I.G, although shows like Onyx Equinox will come out of the newly formed Crunchyroll Studios.

In 2018, Crunchyroll also created its own games publishing label, Crunchyroll Games, to localize and distribute previously released Japanese mobile games based on popular anime properties into English speaking markets. And in 2019, the company purchased the European branch of manga publisher and anime distributor Viz Media. Sony owns it all now.

Where things go from here for the industry and consumers is difficult to predict. At the end of last year, I wrote about complications anime faced during the streaming wars, and predicted that streaming services would become more involved in the production of shows not just the licensing. Much of my prediction was based on the idea that the competition between the different anime streaming services would necessitate the investment in their own exclusive shows to entice consumers to subscribe.

Netflix has been content to produce its own exclusive shows at a rate of one to three every season, then later licensing other series after they finished airing for their international catalog. As predicted, Funimation and Crunchyroll had been vying for licenses to 30-40 new shows each season by often becoming involved in the productions to help secure the simulcast streaming rights.

However with that suddenly no longer the case there shouldn’t be much change in the short term aside from consumers potentially only having to subscribe to one or two services to simulcast new shows (compared to the four or five you needed to only a few years ago). In the long term, though, the Sony-Crunchyroll deal has the potential to shrink the number of, and budgets of, future anime productions.

But given the valuation of the acquisition, and the growth of the market over the last few years, it seems likely new players will step in to fill the spots once occupied by Funimation and Crunchyroll production committees. Although the only place you’ll likely be able to watch their simulcast will be on Funimation/Crunchyroll.

Update (Aug. 9): Sony’s Funimation Global Group announced Monday that it has officially completed its acquisition of Crunchyroll from AT&T. According to Sony’s announcement, the company’s Funimation Global Group — a joint venture between Sony Pictures Entertainment and Aniplex — will unify Funimation and Crunchyroll into a single anime subscription in the near future.

“With the addition of Crunchyroll, we have an unprecedented opportunity to serve anime fans like never before and deliver the anime experience across any platform they choose, from theatrical, events, home entertainment, games, streaming, linear TV — everywhere and every way fans want to experience their anime,” said Tony Vinciquerra, chairman and CEO of Sony Pictures Entertainment, in a news release. “Our goal is to create a unified anime subscription experience as soon as possible.”

Comments

…Well shit, how am I gonna watch anime in it’s original language with subtitles, for free now?

There is a way.

This is the way?

do u no de wae?

Did the article say anything about dropping the current free tier? My kids watch a bunch of stuff that way now.

My guesses are that AT&T would have just shuttered CR if there was no buyer to save money after that idiotic DirecTV buyout; and that Sony’s endgame is that both FunimationNow and Crunchyroll’s content, as well as Aniplex and Sony’s non-anime stuff, will get migrated in a new, central Sony streaming service much like HBO Max.

Stargate, Shark Tank, The Shield and Sword Art Online, what a combo.

I’ve been expecting VRV to be folded into HBO Max for a long time now, just based on the other decisions ATT have been making with this stuff… the CR team’s jobs are probably safer over at Sony, if we’re being honest.

I guess Sony owns anime now

In a few years, when all theatrically released movies are called "Disneys", all animated shows and movies from Pacific Asian countries will be called "Sonys". It will all be reductive trope-recycling drivel.

So anime won’t be different. Sweet!

You should be careful in what you say or the Juche may find you guilty of subversion…

Not particularly happy that the West is having a say in the industry when they largely ignored for the industry decades until it got popular…and profitable. Looking at this email, Sony could have gotten it for $30-50 million https://wikileaks.org/sony/emails/emailid/1285.

Personally, I dont want to see some much more western influence in anime since I enjoy there unique culture, ideas, and story telling.

I agree, but I think that’s gonna happen one way or another anyway. If not like this, which I still think will be very minimal on the creative end (even with Funimation on the production committee with lots of new anime – they’re mainly there for easier and more permanent licensing rights), then by the aging Japanese anime folks retiring/dying. Because sooner or later, they’re gonna need immigration to bolster their economy.

Japan’s internal fanbase cannot self sustain their entertainment industries either, the aforementioned aging issue being the top reason. Just looking at Japanese game sales is pretty pathetic now, other than Nintendo (who also gets WAY more sales overseas than Japan), it’s a fraction of what was selling well before. Even the PlayStation has pretty much converted into an American brand in the last decade, with American higher ups, the worldwide Hq now in San Mateo, CA and publishing being vastly Western focused.

It’s just the state of where Japanese customers are with games consoles these days. The PS2 managed to sell over 23 million units whereas that dropped to 10 million with the PS3 and the PS4 is around 9 million while the Switch had sold over 15 million units thanks in large part to Animal Crossing.

Yeah, declining birth rates lack on immigration and the lost decade will do a number. That is about to hit the us over the next decade. US policies since 1980 are all reaching their end goal. Unions were decimated, college costs exploded, we cut taxes on the wealthy and corps steadily from Reagan on (actually from Kennedy on), our inner cities lost all their manufacturing and then first crack, then meth, hollowed them out, some cities were then revitalized and are now too expensive for people to live in without six figure incomes (SF, DC, NYC, Seattle, and I mean the city proper not the outer boroughs for NYC) or they are derelects (Detroit, Newark, NJ, etc)(also gross over simplification, i know), then the lack of meaningful antitrust enforcement has allowed massive consolidation of big business which has meant less jobs and higher prices for consumers on things that matter, we have let healthcare run wild, at best the ACA slowed the rate of growth in costs to consumers…slowed the growth that is it, then between walmart and other consolidation in meat pack and food production our rural areas got hollowed out, toss in moving off of coal and leaving coal miners to rot and now our rural areas have opiods (but no war on drugs for them…because racism)….we have done infrastructure spending in a meaningful way in decades. So you have younger millenials and down…who are heavily in student loan debt, working longer hours at jobs, with longer commutes, for less money (inflation adjusted) and worse benefits than their parents generation, with exponetially higher rents….who are putting off marriage and children (we have clear data on it)…..and who have now had 2 major economic disruptions in the past 12 years. The effects on things are lagging, but our chickens are coming home to roost. It means a degradation in consumer buying power in ten years (well steadily)….2020 is going to be China’s true rise…by 2030 they will be the dominant power. I see no will in america for the revolutionary action needed to revitalize the country. Green New Deal, mass switch to clean energy, universal healthcare, publically funded college and technical training, and housing policies to get younger people into homes, breaking up of large industries to promote competition, and massive financial reform. If we get even one of those things started in the next ten years I would be fucking amazed. We need all of them. So look at Japan and realize their current situation started in the 90s with the lost decade….but it took 20 years to really kick in, and now they are ten years past that. We are in the middle of our 20 year point now.

What will this mean for anime tho?

Find out next time on the next thrilling episode of Dragon Ball Z!

This was good. Thank you. I will tune in next time.

Spirit Ball away the deficient.

\o/

Yeah, but the industry pretty much always ignores things until they start becoming popular. Like, that’s pretty much their M.O. Look at the vast majority of popular music, ignored until their popularity becomes too much to ignore.

I mean, unless you only consume the hardcore niche shows that aren’t ever marketed abroad, the more popular anime gets, the more diverse influences it will take in from around the world, not just "the west". Nothing exists in a bubble, and Anime is no different. Looking abroad for inspiration can lead to some great works of art being created. Wanting nothing to change just sounds dull to me. The world is a diverse and unique place, and anime deserves to take as much of it in as possible.

(: I would argue that the commercialism and pandering in Japan has already ruined anime… like, for the last almost 20 years.

Nahhh. Rampant commercialism was always present in anime, just like American cartoons were before the US stepped in with regulations in the 80s. Everything from Doraemon to Fist of the North Star to Gundam – and the entire output of Tatsunoko – is built on a merchandising empire.

And anime has simply grown bigger, year after year. There’s more pandering commercial projects than ever, but there are also more earnest projects than ever.

fair, but i think there’s a general romanticization of anime by US fans like the majority of it (and the increasing majority after the 90s) WASN’T cookie cutter bullshit (usually moe). i feel like they have this idea that anime isn’t like, initially a nerd circle jerk that eventually turned into the hikkikomori equivalent of CSI, NCIS, etc (along with an endless shit stream of "your prescribed gender role as a cartoon, enjoy it kids!").

gundam… i mean the first 2 gundam series are artistic triumphs. and i’m sure there’s still intentional, unique-voiced stuff coming up. but good god, as the 00s went on, i felt like the stuff that fansubbers would see fit to bring over to the USA was more and more infiltrated by just genre-repeating commercial trash. it got into the bloodstream of the "serious" anime and made almost everything unwatchable for me. YMMV (:

"Your prescribed gender role as a cartoon" succinctly captures what I hate so much about anime tropes, and why I can’t just let it go.

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