Crunchyroll Might Not Be Going That Well, Bloomberg Reports

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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.

As a long-time enthusiast of anime and manga, I find myself deeply concerned about the current state of Crunchyroll, a platform that has been instrumental in bringing Japanese animation to Western audiences. The recent report by Bloomberg paints a picture of a company struggling to maintain its position as the go-to destination for anime fans.

Globally, Crunchyroll stands out as one of the most extensive services dedicated to anime. Unlike other official anime platforms, it’s accessible in a multitude of countries and offers localized content in various languages. If there are other worldwide anime platforms, they usually provide content only with English subtitles. Notably, Crunchyroll features popular series such as “One Piece,” but also caters to more specialized tastes by offering a wide range of options to satisfy diverse preferences.

Prior to its merger with Funimation, Crunchyroll already stood out globally, given that Funimation’s competition was primarily within English-speaking regions. With Sony taking over Crunchyroll, it appeared as though they had constructed an unrivaled anime empire.

However, contrary to what might be assumed based on a recent Bloomberg in-depth report, it appears that the surge in anime viewership doesn’t necessarily mean these new viewers are seeking out niche services. Instead, they seem more likely to watch anime on mainstream platforms like Netflix or Disney+/Hulu.

Employees Don’t Seem To Be Happy

As a dedicated fan, I’ve noticed some intriguing shifts within the company since it was taken over by Sony/Funimation. Bloomberg spoke to 18 employees past and present, suggesting that these changes have led to some underlying tensions. Notably, key figures like our former CEO Colin Decker, General Manager Joanne Waage, and Chief Operating Officer Brady McCollum all parted ways with the company in the months post-acquisition. I managed to get in touch with Decker, who shared that she chose to step down to prioritize her family and start a venture in another sector.

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.

Despite reports from Bloomberg’s sources, it appears the newly appointed leadership team is predominantly composed of Funimation personnel, which raises concerns about their connection with the company’s employees and customers. Internal records suggest that the company aspires to attain 25 million subscribers by the year 2025; however, those within the organization question if this target can be achieved due to its lack of basis in thorough market analysis. The plan is to significantly boost subscribers in India and Southeast Asia, but so far, only Latin America has managed to meet the 2024 objective, out of the six regions considered.

Crunchyroll is putting money into creating translations (subtitles and voiceovers) for various languages, such as Hindi, Tamil, and Telugu, to attract viewers in Asian markets. Interestingly, the cost for a monthly membership in India is just $1, which some might find too low to be profitable. However, internal documents from Bloomberg suggest that the subscription rate could be higher than the usual 5% found in streaming services, and potentially even surpassing 8.5%.

Mainstream Services Enter the Stage

Disney and notably Netflix have significantly increased their investments in anime content. Initially, it appeared that Netflix might face challenges, but they’ve managed to secure popular mainstream shows, such as the upcoming “Sakamoto Days.” For several years, Disney has been exclusively streaming “Bleach” and its sequel. Licensing companies like VIZ appear to be assessing which streaming platforms provide a better financial return, hence shows like “Dandadan” and “Zom 100” can now be found on both Netflix and Crunchyroll.

Various studios and distributors, like Toei and Toho, are aiming to attract a wider audience and could potentially strike deals with streaming platforms such as Netflix and Disney. For instance, Toei has collaborated with Crunchyroll for series such as One Piece, Precure, Dragon Ball, Saint Seiya, and Sailor Moon Crystal, but also seems to be exploring partnerships with Netflix. This is evident in the streaming of the Sailor Moon Eternal and Cosmos movies, as well as One Piece and Dragon Ball Daima (released a week after on Crunchyroll). Some older Toei titles, such as Slam Dunk, have also found their way onto Netflix. Interestingly, Netflix and Toei have teamed up to produce the remake series of One Piece. Crunchyroll argues that sharing content with mainstream platforms could boost their subscriber base by fueling curiosity in anime.

Investing heavily in anime by mainstream services might lead to an increase in production costs, potentially causing challenges for streaming platforms like Crunchyroll.

Initially, I noticed that their collaboration took place during the CGI reboot of Saint Seiya, but it seems Netflix opted out of the deal, as they only stream the initial season. The remaining series is available on Crunchyroll instead. Since then, the series has not been positively received by fans, and this could have significantly impacted Toei Animation negatively.

In addition, Bloomberg states that both studios and major manga publishers like Shueisha and Shogakukan have expressed dissatisfaction with Crunchyroll’s marketing strategies for shows such as One Piece and Dandadan. Moreover, industry employees in the anime sector claim they don’t trust the financial reports on sales that Crunchyroll provides when sharing revenue.

Crunchyroll’s Responses to Bloomberg

Crunchyroll was approached by Bloomberg for content creation. In an email, the company emphasized their extensive offerings, which encompass not just unique anime series but also related merchandise and gaming experiences tailored to meet the desires of dedicated anime enthusiasts.

It’s never been more thrilling to be an anime enthusiast! We’re deliberately supplying a constant stream of anime content and encounters that nurture this fandom, increase love for anime, and introduce more people to the medium. The Crunchyroll business is doing exceptionally well financially, and the company is poised to keep expanding as global interest in anime continues to surge.

Observing the recent news about potential layoffs, Crunchyroll mentioned they have approximately 100 open positions globally and their team has expanded by 27%. However, it remains unclear whether the employees from Funimation who were transitioned to Crunchyroll are included in this growth percentage.

Toho and Toei either didn’t respond or declined to comment for the story.

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2024-12-24 21:25