Streaming Business, Autumn 2017

I remember supporting Crunchyroll when it turned legit in 2009 and started to charge a subscription. Now, it’s the incumbent, to answer the irony-note. There is nothing incumbent to Daisuki–it’s a new venture by a bunch of Japanese companies to try to stream internationally. Crunchy beats them by like, what, 4 years? A …decade (lol) by internet streaming time. Not that it really matters.

When Funi sold to Sony for ~150M USD it was a sign that CR is worth a lot more than that. Maybe $250M? When Chernin bought half of the company in 2013 it was valuing CR at about $100M, and today Chernin’s company owns about 80% share of the Crunch. It’s really hard to say how much more it is today in exact terms. Part of the reason is because not only we are long in the era of Warring Idols, we are squarely in the heat of combat during the era of Warring Streaming Services. Netflix’s random number drop here is a stake in the ground.┬áThis explains a major reason why Daisuki is going away–why would the production companies like Bandai Namco, several who are likely serving as middleware for Netflix and other foreign interests, compete with their customers? 30 anime is a lot of work that probably will go very far as far as engaging production pipelines largely controlled by the same o’ stakeholders that has been pumping out the animes that we know of since the late 90s. Plus, more competition will make Daisuki more difficult of a proposition when its owners may be better served with more “remotely-local” money participating, as it always is the case of doing business in a foreign country. By that I mean, why would Japan spend the extra effort and extra money courting Americans (or other foreigners) when American companies can spend that extra stuff courting Japanese licensors and production companies?

So, then, Netflix. Netflix is flexing this muscle because 1) they’re in a hurry for attractive original content and 2) they’re newcomer in the anime space, yet they have a major leg up over the other American competitors like Disney or Amazon. Anime, after all, is cheap, and its cheapness is possibly the strongest suit about this type of media. I can’t imagine how many live-action American Netflix Originals $8B can get them, maybe 10? 15 tops?So yes, Author is right, the incumbent will slap Daisuki, Crunchyroll and every anime-specific simulcast service in the world silly with $8 Billion. Why did FUNi and CR merge their streaming effort? Gotta hunker down when giants roam your town, I guess.

Crunchyroll is the incumbent in this space. It has some strong competition, but more because streaming giants are going further to reap margins and build walls to protect their revenues. Daisuki serves its masters more by folding and having CR do their deeds, or whoever else is paying more. Anime is just a growingly important area that has long been neglected. You can kind of tell that when big guns start to target the smaller fries, the market is maturing as margins thins enough so deeper niches are being courted, because now they make economic sense.

It’s worth taking a moment to also think about why Sony bought Funimation. Their FAQ explains a lot, but it’s basically because everyone wants a pie in the Streaming Wars. Sony’s stakes in the ground begins probably with Playstation Vue, and extend to their on-demand offering like Crackle and whatever you see in the Playstation Store. More importantly the rest of the world is fertile battlegrounds, where Netflix’s anime streaming worldwide will clash with licensed content from the usual folks, including Sony, eventually armed with a bunch of FUNi stuff. It’s been 9 years since I watched Xam’d on PS3. God damn.


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