Screenshot of various anime titles shown on the Apple TV app.

Funimation Buying Crunchyroll Is A Big Deal, But It’s Not The End of The World As We Know It

The internet was rightfully abuzz Monday with the announcement Sony (by way of Funimation) had completed its acquisition of Crunchyroll, originally announced in December of 2020. While Funimation and Crunchyroll had a content sharing agreement prior to Sony’s purchase of Funimation, the two truly joining forces has the potential to really shake up the anime industry, especially in the US. That said, I think there are a lot of important things to consider that may have been missed in the initial buzz from anime fans.

First, and perhaps most importantly, Sony may own Funimation, but they do not directly control them. From Sony’s press release on Monday (emphasis mine):

Funimation has nine offices in six countries and hundreds of employees worldwide. As an independently operated joint venture between U.S.-based Sony Pictures Entertainment and Japan’s Aniplex Inc., a subsidiary of Sony Music Entertainment (Japan) Inc., Funimation benefits from deep entertainment expertise across cultures, territories, and languages.

Funimation is a Sony company in the sense that it is a join-venture of Sony Pictures Entertainment and SME Japan d/b/a Aniplex, but the important bit there is the part where they are still independent. While this could well change with Crunchyroll joining Funimation, I would interpret this as Funimation having the financial backing of Sony, but Sony is letting Funimation continue to run things their own way – for now.

That said, Sony is a ridiculously huge company in Japan, but not all of those branches exist over in the US. We don’t have Sony Bank, nor do we have Sony’s insurance company. Yes, Funimation is split between a US-based Sony branch and a Japan-based one and while that certainly means than Sony could make Funimation and Crunchyroll focus on Sony titles only, I don’t think – well, I hope – they won’t make them do so.

Sony may own a significant portion of the anime industry in Japan, but they don’t own all of it. Purchasing Crunchyroll means they now own the majority of the US anime industry, but again, they don’t own all of it. Sentai is still going strong as an independent distributor, and they’ve gotten their hands on some pretty solid titles lately. You probably know RightStuf as the online anime and manga store, but they have a production company too, Nozomi.

That said, Sony’s involvement in anime, especially in Japan, is far from new. Aniplex has been in operation since 1995 doing anime planning and licensing. Sony Music takes care of soundtrack production. A-1 Pictures and CloverWorks do the actual animation. In Japan, Animax is their streaming platform. Sony purchasing Funimation and Crunchyroll just makes a lot of sense for them to get involved on the US-side of things, which considering how much anime has exploded here since 2007 (when I started watching it), Sony is arguably late to wanting to cash in and/or control growth of anime in the US.

I think fans are right to be concerned that Sony does now want more of that control. Funimation’s track record on censorship and casually inserting political agendas into dubs is far from a perfect one. The latter concern is one that I think is more of a Funimation problem rather than a Sony one, but censorship is definitely going to be a Sony problem, even if Funimation became infamous for dropping Interspecies Reviewers. Sony, like the majority of Japanese companies unfortunately, can be extremely overly cautious. Any kind of change in Japan is excruciatingly slow to happen, in part because they overanalyze the hell out of any kind of risk. Could it offend exactly one person? Yes? Not worth the risk. There’s a reason Japan is still reliant on fax as a primary source of communication.

So what will this merger ultimately mean? I think it’s too soon to say. While neither Funimation nor Crunchyroll have announced many details yet, Funimation has confirmed that subscriptions will eventually merge. There are a lot of things that could happen, but it’s important to remember both Funimation and Crunchyroll made acquisitions overseas, where there are different legal restrictions than in the US. Funimation owns Wakanim in France and Madman in Australia. Crunchyroll owns Viz Media Europe Group.

I mentioned Sony acquiring both companies made a lot of sense for them to have more control in the US market. Crunchyroll and Funimation arguably have one specific thing they are both good at, and that “thing” is different for the two of them.

In the case of Crunchyroll, it’s software. Crunchyroll may have started as an anime piracy site, but they very quickly became the global leader in legal anime streaming. VRV has been an interesting product from Crunchyroll, and was a great solution to having to switch between the Crunchyroll and Funimation apps for a time.

Funimation has been distributing anime since 1994 on physical media. Funimation didn’t begin streaming anime until 2011. While that is only two years after Crunchyroll pivoted to legal streaming, Crunchyroll has been in the streaming business since 2006. Funimation arguably didn’t get serious about streaming until 2016 with the rebranding of their streaming service as FunimationNow. Funimation did, however, have a TV channel from 2005 until 2015.

With that in mind, even though Sony was widely reported as balking at the original price AT&T offered Crunchyroll for, I suspect Crunchyroll was a service Sony very much wanted to acquire after purchasing Funimation. Sony already has established lines of business for anime production and distribution in Japan. They did not in the US until Monday.

I would be very surprised if this happens quickly, but if Sony US is hopefully smarter than Sony Japan, I see Funimation exiting the streaming business. They have never been very good at it, but they have been very good at producing dubs and physical media releases of anime. I expect Funimation to take on a role in the US similar to that of Aniplex in Japan. On the other hand, I expect Crunchyroll to fully take over streaming operations. While they’ve tried series production before, they just don’t have the experience Funimation does.

It’s also entirely possible we go back to something similar to when the two had a content-sharing agreement and the early days of Funimation’s streaming efforts: Crunchyroll streams subbed anime, Funimation streams the dubs. While Funimation has said they plan to merge subscriptions, it would not surprise me if they did a subs-only, dubs-only, and both as subscription offerings.

Ultimately, there are a lot of things that could happen with this merger, but I think it will be several months before we start to see anything significant change. So don’t panic – yet.