But It Is a Move To Be Concerned About
Crunchyroll’s acquisition of Right Stuf last Thursday definitely is not a move I would have expected, but it’s one that makes sense for Crunchyroll and ultimately Sony. However, it’s a move I would be much less concerned about if Crunchyroll were still under WarnerMedia ownership rather than Sony.
Crunchyroll is no stranger to e-commerce, but they arguably have never done it particularly well. When I signed up for Crunchyroll in 2010, it was limited to one “Daily Deal”. While it was a model that worked fine to make some extra income, it was unlikely to be profitable in the long run, especially considering how quickly Crunchyroll was growing. Fulfillment for several of them also seemed to be outsourced to third-party vendors, giving Crunchyroll the appearance of a company incapable of physical distribution on their own.
However, Crunchyroll is ultimately a software company; I don’t think they should have been expected to have an order fulfillment department at that time. A few years later it absolutely made sense to have one. Crunchyroll was quickly becoming a company with brand name recognition. Gone were the days of only four simulcasts a season. Crunchyroll was going to need another revenue stream to continue funding its expansion, and selling merchandise from currently airing shows was a move that made sense. Since then, the Crunchyroll store has relaunched a few times, slowly becoming a store representative of the Crunchyroll brand and titles under the Crunchyroll catalog.
But again, Crunchyroll is ultimately a software company, specifically a streaming video and (to mixed levels of success) mobile gaming one. Yes, they’ve definitely done series production long before the merger with Funimation, but I would never have considered Crunchyroll a leader in it. Likewise, I would not consider Crunchyroll a leader in e-commerce, nor physical distribution.
Right Stuf, on the other hand, I would consider the leader in physical distribution for anime and manga in the US. Yes, you certainly have alternatives, but I can’t think of anyone that specializes in anime and manga specifically and has the brand recognition that Right Stuf does. They’ve done fulfillment for several anime-related Kickstarter campaigns, both their own and those of others. For a time, they were the exclusive distributor for Aniplex, a Sony company. While one of the much smaller studios out there, they’re also the parent company of Nozomi, who has put out some very underrated releases.
Crunchyroll acquiring Right Stuf means Sony now owns a software company (Crunchyroll), a production company (Funimation), and a physical distribution channel (Right Stuf). However, while Right Stuf has been in business since 1997, they are becoming part of Crunchyroll’s Emerging Business department. It is that designation that concerns me about this acquisition. Overnight, Sony has gone from doing e-commerce as a hobby to being the market leader (for anime and manga anyway). While Sony might not own a manga publisher – yet (they have a very small stake in Kadokawa) – they now own several anime studios (Aniplex, A-1, CloverWorks), the leading anime streaming service (Crunchyroll), the largest English-language production company (Funimation), and now the US leader in anime e-commerce (Right Stuf).
This gives Sony dominating power over the anime industry in the US. If you remember the infamous “Aniplex Tax” of the 2010s, I think you might know why this acquisition concerns me. While there is absolutely a “popularity tax” in anime still, the “Aniplex tax” was Sony attempting to charge the same exuberant prices for anime physical releases and merchandise in the US that are commonplace in Japan. If you think $60 for part of a season is bad, when I started getting in to anime, $60 for four episodes on a disk was not exactly unheard of. While it was a bit more rare in the US than how common it is in Japan, it still made anime an extremely expensive fandom to get in to.
While I think it would be a very bad move for Sony to do so, they’re now in a position where they could potentially charge whatever they wanted for a series or related merchandise. Crunchyroll no longer offers an ad-supported option for the latest titles. If that’s making you do the right thing of waiting for a disk release rather than sailing the seven seas, Sony could now force you to get that disk from Right Stuf, and they could charge anything they want for it. $80 or more for part one of a season with no special features could quickly become the standard for the vast majority of anime titles on disk in the US. Sony could make every single title on Crunchyroll a Right Stuf exclusive if they wanted to. No more Amazon, Target, Best Buy, or Kinokuniya to get your anime fix. Sony could pressure merchandise manufactures to sell exclusively on Right Stuf in exchange for the merchandise rights to a series.
I very, very much hope I’m wrong about this prediction unlike my predictions about the Crunchyroll and Funimation merger. I get why Sony is making the moves it is. Anime has become a huge business in the US, and Sony wants to cash in on it like they have in Japan, but they are making moves in the process that could push anime back in to a fandom that is less accessible than it has become. I think the golden age of anime in the US has now come and gone. A market dominated by Sony is not a market where fans win.
Yes, the Crunchyroll and Funimation merger raised alarm bells, but I said it was too early to start panicking. Especially now that Sentai has been acquired by AMC Networks, I would say there is no longer a significant independent player in the US anime market – and that is something to be worried about.
Sony, AMC, and Netflix now control the anime industry in the US. Two of those players have huge reserves of cash at their disposal, granted Netflix is scaling back their investments, which makes me think that now would be the ideal time for Apple to enter the market. Yes, Apple. TV+ has been a quirky service to watch grow, but I honestly think it is one that anime could work on, even if Amazon’s efforts with Prime Video and Anime Strike infamously failed.
If, and I again hope I’m wrong about this, Sony were to acquire GKIDS next, I would be bold enough to call game over for anime fans in the US. Sony would have ultimate control over the market in the US, and there would be very little fans would be able to do about it.