Summary
- Despite international acclaim, Crunchyroll faces challenges with new mainstream streaming options.
- Internal tension and employee turnover following Sony’s acquisition may hinder Crunchyroll’s growth.
- Competition from mainstream services like Netflix and Disney could impact Crunchyroll’s production fees and market share.
Crunchyroll is probably the biggest service focused on anime worldwide. No other official anime service is available in as many countries, at least not providing localized content in as many languages (because if there is any other anime platform available worldwide, it is likely to offer content only with English subs). Furthermore, Crunchyroll offers major series like One Piece, but also niche anime, with options to suit all tastes.
Even before fusing with Funimation, the service was unmatched when it came to international attention (because Funimation was only as competitive in English-speaking countries). When Sony acquired Crunchyroll, the conglomerate seemed to have built an anime empire that would have no big competitors.
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But that’s not exactly how things are going, according to a recent Bloomberg in-depth report. First, according to research manager from data company Ampere Analysis, despite the anime viewership upsurge, these new viewers are casual likely to watch anime on mainstream streaming platforms like Netflix or Disney+/Hulu, and not look for niche services.
Employees Don’t Seem To Be Happy
Bloomberg interviewed 18 current and former employees, and points to tensions emerging after the company was acquired by Sony/Funimation and changes in the work environment. Top managers like former Chief Executive Officer Colin Decker, former General Manager Joanne Waage and former Chief Operating Officer Brady McCollum left the company in the months following the acquisition. Bloomberg reached Decker, who stated she left to focus on her family and pursue her own company, in a different industry.
McCollum leaving the company can be seen as symbolic, as he worked for Crunchyroll from 2008, when the service still streamed pirate content, to 2023, so he was not only COO, but also one of the most senior employees. Three rounds of layoffs have happened since the acquisition, and another reorganization is on its way by early 2025.
Still, according to Bloomberg’s sources, the new management team comes primarily from Funimation and is out of touch with employees and customers. Internal documents point out the company is aiming at reaching 25 million subscribers by the end of 2025, but those insiders don’t think it will reach the goal, because it was not set based on meticulous market analysis. They aim to triple subscribers in India and Southeast Asia, but the only market that reached the 2024 goal was Latin America (one of six regions).
Crunchyroll is investing in localization (subs and dubs) for many languages to appeal to Asian markets, including Hindi, Tamil and Telugu. The price for a monthly membership in India is $1, which might be even too low to be profitable. Yet, Bloomberg claim internal documents suggest the turnover rate is higher than the typical 5% in the streaming industry, and maybe even higher than 8.5%.
Mainstream Services Enter the Stage
Disney and, especially, Netflix, have invested more in anime content. Despite seemingly struggling at the beginning, Netflix has now been able to acquire major mainstream titles, like the upcoming Sakamoto Days. Disney has been exclusively streaming Bleach and its sequel for a few years. Licensing companies like VIZ seem to be testing which streaming services give a better return, so titles like Dandadan and Zom 100 have been streamed on both Netflix and Crunchyroll.
Some studios/distributors, such as Toei and Toho, are also trying to reach general audiences, and might focus on deals with Netflix and Disney. Toei has made deals with Crunchyroll for series like One Piece, Precure, Dragon Ball, Saint Seiya and Sailor Moon Crystal, but also seems to be testing the waters with Netflix, which streams the Sailor Moon Eternal and Cosmos movies, and One Piece and Dragon Ball Daima (a week after premiering on Crunchyroll). A few older Toei titles, like Slam Dunk, have also been landing on Netflix. Furthermore, Netflix and Toei partnered to produce the One Piece remake series. Crunchyroll defends that sharing titles with mainstream outlets will bring more subscribers, as it deepens interest in animes.
Mainstream services investing more in anime could also mean the production fees could rise, making it harder for Crunchyroll.
Actually, the first time they partnered for a bigger project was with the CGI Saint Seiya reboot, but Netflix apparently went back on the deal, since it streams only the first season. The rest of the series is streaming on Crunchyroll. The series has not been well-received by fans since the first season, and probably was a major setback for Toei.
Furthermore, Bloomberg reports both studios have been dissatisfied with the current marketing strategies undertaken by Crunchyroll in relation to some of their titles, including One Piece and Dandadan. Not only them, but major manga publishers like Shueisha and Shogakukan are upset with the way the company manages merchandise rights. Three anime industry employees also told the news outlet that they don’t consider the reports on sales that Crunchyroll shares for revenue-sharing purposes to be trustworthy.
Crunchyroll’s Responses to Bloomberg
Bloomberg reached Crunchyroll in order to produce the story. In an email, the company stated that it offers everything, from exclusive titles to merchandise and games, that anime fans could want:
“There’s never been a more exciting time to be an anime fan, and we are strategically feeding a pipeline of anime content and experiences that fuels that fandom, deepens the love of anime, and exposes more audiences to the medium. The Crunchyroll business is outperforming our financial expectations, and the company is well positioned to continue to grow alongside the rising global demand for anime.”
Regarding alleged layoffs, Crunchyroll added it has 100 opem positions around the world and its staff has grown 27%, but Bloomberg adds it isn’t clear if Funimation staff that were transferred to Crunchyroll are included in that number.
Toho and Toei either didn’t respond or declined to comment for the story.
Source: Bloomberg