Funimation Completes Acquisition of Crunchyroll

Anime streaming site Crunchyroll has had quite a journey. Starting life as a pirate site before seeing the error of their ways and (with the help of a major investor) going legit. The site has been at the forefront of the legal streaming revolution in anime ever since and has grown over the years, recently surpassing five million subscribers and 180 million registered users worldwide. Crunchyroll became part of mega-multi-media conglomerate AT&T/WarnerMedia through the acquisition of its parent company. Otter Media. Late last year, it was reported that AT&T were looking for a buyer to raise capital for their massive debts. Ultimately, it was Sony Pictures Entertainment Television through Funimation Global Group who announced that they intended to buy the company.

The deal has been held up by US government red-tape, as the sale was investigated as leading to a possible monopoly in anime streaming in the United States. This all seems to have been sorted as SPE have this week announced the deal has gone through for $1.175 billion.

Funimation is the US's biggest and most established traditional distributor of Japanese animation, with over 25 years in the business. Although they have made great strides in the streaming market in recent years, their streaming site has been consistently lagging behind their biggest competition.

What does this mean for viewers? In the immediate short term, not a lot, as they will continue to operate as two separate entities for the time being. It will mean that the two will immediately no longer be competing for licences, and there will be the opportunity for shared content, as happened under the Crunchyroll-Funimation pact that was in place for some years before Sony bought Funimation.

Long term things are not so clear cut. During the Pact years, the two companies transformed Crunchyroll to the destination for original-language subtitled content, while Funimation hosted dubs. Since the end of the deal, subtitles have returned to Funimation's streaming service, and Crunchyroll has been getting more and more into dubs (not just in English). It seems unlikely that they would go this route again.

The announcement says that they are going to create the "ultimate experience for anime fans" and that "our goal is to create a unified anime subscription experience as soon as possible". This could mean one service being absorbed into the other, as happened recently with the UK's iconic Manga Entertainment brand and Australia and New Zealand's  Anime Lab service. It might seem that a billion dollars plus is a lot to pay for company you are just going to shut down, but Funimation gains access to those 50 million subscribers, 150 million registered users and countless new markets- Crunchyroll is available in 200 countries. It also, of course, gets them Crunchyroll's considerable library.

Continuing to operate as two separate services seems unlikely. Could it be possible however to keep them as two separate channels under a single service/subscription- like a 'Sony Anime Service' that could feature channels from Crunchyroll, Funimation maybe other Sony-owned brands like Aniplex and A1-Pictures? It could work similarly to how the different brands like Disney, Marvel,  Pixar and LucasFilm work in the Disney Plus app. Could (and this is really wild speculation based on no evidence) it even be part of a bigger unified Sony streaming service, that could include the Studio's movies and TV shows?

The other possibility would be to create an entirely new service combining the assets of both companies. There's a lot of talented folks in both companies with years of combined experience, so they would have the opportunity to create something pretty impressive.

There are a lot of questions to be answered, and it's likely we won't know what the fallout is for some time. What effect will this have on Crunchyroll's increasing investment in Originals? What will happen with the apps? Most importantly, what does it mean for the staff at either company? We hope that it doesn't result in job losses.

This is likely to be good news for anyone who subscribes to both services- it's probable you won't have to pay for two subscriptions for much longer. Combined, the two companies will be better able to compete with completion to giants such as Netflix and Amazon, as they continue to encroach on their territory. On the other hand, competition is healthy for the market. Some are worried about the one remaining independently owned anime streaming service Hidive (which is owned by the same company that owns distributor Sentai Filmworks). However, they survived the original pact and they're still here, so no reason to suspect it would be any different this time.

We'll be keeping an eye on this as it develops.