Public Service Announcement! - Crunchyroll Acquires Funimation! What Is Going To Happen Next? | Ep.89

Crunchyroll acquires Funimation

This is a public service announcement sponsored by Ed and the good folks at Suuuper Anime Podcast. Allow me to re-introduce myself, my name is Ed, host of the Suuuper Anime Podcast and today is a Solo-less episode, Solo is taking a break to wax his head but he will be back shiner than the sheen on Saitama’s head. Cue Solo laugh 

But never fear because Ed is here and all I need is One Mic, and speaking of One, no not the One Punch man artist, I mean Funimation and Crunchyroll have decided to finally tie the knot and become one. I don’t know why but saying One repeatable reminds me of that Brian McKnight song One you're like a dream come true,…. Yes Solo I sing even without you on the podcast, I know your thinking here he goes again. But I digress, is this a dream come true?

I’ve seen a lot of images of the fusion dance Super imposed with Funimation and Crunchyroll on there, but this is not a fusion which only last for a temporary period, no this is some till death do us part Union or Sony decides to shut us down kind of union. 

But who cares about the marriage, what does this mean for us, the public, the people, who have and will be funding this marriage? What happens to the Funimation family, and what happens to the Crunchyroll family? 

Well let’s talk about it, for all my Crunchyroll subscribers your good. You can sit in your chairs, no need to get up and go shake the hands of the Funimation family members. Because it looks like in this relationship, Crunchyroll is the man and as tradition dictates the woman takes the man’s name. 

In what way you ask Ed, well the union sees the anime arm being renamed to Crunchyroll LLC when it was initially named the Funimation Global Group; and with that comes the dissolving of the Funimation entity which has already started to off load it’s Library of content onto Crunchyroll. 

In fact, and I quote Funimation has said if you have a “Funimation account you can cancel it as you no longer need it” Now this begs the question what if I have already paid for an annual subscription? which a lot of people where asking and angry about on Twitter. Funimation being Funimation replied back with a please click the link to found out more. So I did and hear is what they said I will read it word for word. 

“With so many new shows coming to Crunchyroll, Funimation subscribers will want to sign-up for a Crunchyroll subscription as soon as possible! In fact, if you’re a Funimation paying subscriber and you started your subscription before 2/28/22, we’ll be offering you a 60-day Free Trial of Crunchyroll Premium. This offer is available to new Crunchyroll subscribers only, so if you already have a paid Crunchyroll subscription, you won’t be eligible. Qualified users will receive an email by March 8, 2022 with their own unique link to redeem this offer.”

So, you do get a 60-day free trail if you’re not a Crunchyroll subscriber yet, so if you were paying for both, cancel your Funimation subscription now if you haven’t. But as a Funimation user your queue and watch history will not be transferred when you move to Crunchyroll which again is a massive inconvenience for people who subscribed to Funimation - but apparently, they are working on this. 

So, with that public service announcement and bit of context what does this all mean. Why the merger? Well, I wouldn’t even call this a merger, it’s more like an acquisition, Crunchyroll gets to keep its name, it’s platform, branding, while Funimation is the one being consumed and acquired into Crunchyroll. But I digress. 

• Why did Crunchyroll acquire Funimation?
• Is this good or bad for us the public? 
• What does it mean for future Crunchyroll content, titles and exclusives?
• How will Crunchyroll utilise its newfound powers? Will it use it for good or evil? - I.e raise Crunchyroll subscription prices. 

This and more, find out on the next episode… nah I am just kidding alright so let’s start with the Why?  

Why this acquisition?

Sony made a big bet on the anime market last year when in 2021 it bought Crunchyroll from AT&T for a mere $1.175bn dollars. - We made a podcast episode about this and now I think about it, it also has a Jay Z influenced episode title. It’s called Reasonable Doubt after his first album. You can go and listen to that after this I will link it in the show notes. 

With this acquisition of Crunchyroll Sony now had two subscription streamers focused on the market for Japanese animation - if you recall Sony bought Funimation in 2017. Fans now had to subscribe to both Crunchyroll and Funimation to get everything they wanted, in addition to Netflix and other services, said Colin Decker Chief Executive of Crunchyroll, who runs Sony’s anime businesses.

He goes on to say “a big chunk of our content was divided,” “It was a pretty bad experience, and that’s been a frustration that the company has attempted to fix.”

Now for me as a consumer this is brilliant because this is a business looking and thinking in a consumer first led approach. There is a saying “Your earnings are a by-product of how well you serve your audience”

I’m fact in my research I found a quote from the CEO of Crunchyroll Colin Decker himself saying “When we brought Funimation and Crunchyroll together last year, our top priority was to put fans first," and I don’t doubt that if Crunchyroll continue to think this way they will see massive returns. 

Another reason for this acquisition is to remain competitive. There is a quote by Brian Solis who states “competing for the future starts with a shift in perspective. Without that shift, you will be confined to cycles of iteration—rather than innovation.” This is crucial as the global anime market which was at $24.23 billion in 2020 is projected to grow to $43.73 billion by 2027. That’s HUGE! And other streaming services like Netflix and Amazon know this and have come in to grab snatch and take some of this projected $43bn. Smell that, smells like opportunity. In fact, Netflix in 2020 signed deals with multiple anime studios — Naz, Science Saru, MAPPA and Studio Mir — to increase the supply of content for its service, which now has 222 million subscribers. To put that into context before the Crunchyroll acquisition, Crunchyroll had 5 million subscribers and 120 million registered users.

Is this good or bad for us the public? 

Well as I mentioned earlier, Crunchyroll Chief Executive, mentioned their top prirority was to put fans first and I think this will be a huge benefit to us the fans. Firstly competition is good for any market, if there was no Netflix or Amazon Prime, this would be an, unwelcomed monopolised acquisition but given those companies are streaming powerhouses I am glad they got in the game. We live in a time of digital Darwinism, an era when technology’s impact on business and society involves both evolution and revolution. Digital Darwinism is real, and it’s driven by changes in people (your customers, employees, and partners). How they think, learn, and make decisions is constantly changing as are what they expect, prefer, and value, and how they influence each other.

Now now, stay with me. Digital Darwinism occurs because of the impact that disruptive technology has on pretty much everything. But whether businesses flourish—or end up being disrupted—depends to a great extent on how executives react in moments of truth. For some, doing nothing is the answer. For others, reacting to trends once they become mature is the favoured way to move ahead. Only a relative few will relentlessly pursue market relevance and leadership and make innovation part of the corporate DNA and culture.

The quote I want you all to focus on is “how executives react in moments of truth” Chief Executive of Crunchyroll Colin Decker knew that in order to compete they would need to evolve and revolutionise the brand. Digital Darwinism is driven by change in people and as people and consumers we are becoming more and more brand agnostic in our loyalty to brands. Convenience is now much preferred and through this acquisition, Crunchyroll will now be able to consolidate a number of titles under the Crunchyroll banner name. In fact to begin with they will be adding an additional 50 titles with 1,600 hours of content. This will include notable dubbed anime coming to Crunchyroll such as Dr. Stone, (Time to get excited) Fire Force, (It’s explosion) My Hero Academia, and Tokyo Ghoul. Other iconic series that were previously exclusive to Funimation, like Cowboy Bebop and Yu Yu Hakusho, are now also available on Crunchyroll.

What does it mean for future Crunchyroll content, titles, and exclusives?

This niclely transitions us on to what does this mean for the future of Crunchyroll content, titles and exclusive. Well, I was in a twitter space speaking about this merger and there was a great point made regarding Crunchyroll needing to take more risk with developing exclusive titles such as Tower of God for example. With this acquisition, it should hopefully mean Crunchyroll has more negotiating power when it comes to the table so to speak of getting that exclusive either from Japan, Korea, China or elsewhere because we know that Netflix have already started doing this. This really is a game of content and the streaming service which has the most popular content is most likely to win. Its why Netflix spend billions of dollars getting in content and exclusives, they want to be a one stop shop entertainment streaming brand.

Now this does not mean Crunchyroll should start brunching out and introducing documentaries and stuff on their platform, and lord knows I hope they don’t start thinking of making anime films – that would be a disaster. I think they have a strong enough niche to set them apart from the likes of Amazon Prime and Netflix, but they have to ensure that this Niche is attractive enough to keep users subscribed or get users to subscribe.

How will Crunchyroll utilise its newfound powers? Will it use it for good or evil? - I.e raise Crunchyroll subscription prices. 

And speaking of subscribers how will Crunchyroll utilise its newfound powers and audience. Will they raise their subscription prices? Well in my opinion NO! And here’s why? As stated earlier, competition is great for the market, and while this acquisition definitely gives Crunchyroll a more attractive portfolio with regards to more content, it still has to compete with the likes of Netflix, Amazon Prime and even Disney to some extent. And as we all know, what is usually the deciding factor for someone shopping elsewhere? – PRICE! Quality can come into it but in this case its price. People are more price sensitive to streaming services given there is soo many options, it really is a buyer’s market, Crunchyroll subscription model is around $9.99, this is in line with the other platforms like Netflix and Amazon Prime, they would be foolish to raise it to like $15 or even $12 dollars given how price sensitive buyers are in this market.

They have done the right thing in consolidating, it’s a good win, now they just need to make the transition as smooth as possible, use the current and incoming revenue from Funimation customers to better innovate, develop and provide a better experience for us, yes us the customer. For as the found of LinkedIn Reid Hoffman once said, “a win on the score board isn’t enough when you can change the whole game.”

So, with that said, I hope you enjoyed my economic lecture, I knew my degree would come into use one day, who knew it would be for an anime podcast – Emotional damage! I hope you enjoyed this publish service announcement, and as always we would we love to hear what you think of this acquisition by Crunchyroll, feel free to message us on Instagram like Bradlad.Wav, tharealbrando etc or send us a voice note via our website Suuuperanimepodcast.com and hit the orange mic like Ageing Smith did or engage with us on Facebook like Heather Stewart, which ever socials you use, we are there. Also thank you so much for the feedback we got on the On the Hotline Valentine’s Day episode and telling us what anime has made you cry; I will be shouting you out and discussing your recommendations with Solo once he is back from waxing his head. Cue solo laugh

Thanks for listening, we have a very special guest next week, so make sure you come back for that but until then have a Suuuper week!