Why Don't Streaming Sites Work Together?

by Justin Sevakis,

xNightshade 22 asked:

A simple question for you. Why don't they put all the anime streaming services together on one platform and charge a monthly fee for it? I believe this is a crucial reason why people use pirate sites to watch anime and why these companies are losing money to those sites. With that being said if they did do that, it could potentially cut the costs of obtaining licenses for shows so they split the costs between each other to post them on a single website.

What you are essentially asking for is for all of the companies who license anime to stop competing and put all their anime under one umbrella service, much like Funimation and Crunchyroll did, so that you can have all your anime in one place for one low price. I can understand why you want that. But it is a terrible idea in practice.

It's funny, consumers used to love competition. Competition meant that nobody could jack up prices too far without sticking out, and had to put out a high quality product, because if they didn't, the competition would. Because of competition, companies have to work hard to keep customers happy, because if they don't, the consumer can always go to the other guy. Competition, so long as it's kept in check, generally keeps markets healthy and functioning. Lack of competition -- monopolies, to put a name on it -- creates slow, lazy companies who don't try very hard to impress anybody. There's a whole host of reasons why monopolies are bad for consumers, the market, and tend to abuse their market power. Just think of your local cable company for a good example.

One of the strange things about the internet era is that the internet loves monopolies. Think of any one website category and you can probably immediately identify one clear, uncontested market winner, and maybe a few also-rans that nobody takes seriously. Want to search for stuff? You go to Google. Want an email account? Gmail is your best bet. Video game livestreaming? Everybody uses Twitch. Pretty much every other form of livestreaming? If it's not YouTube, people grumble. General shopping? Amazon is the first place you go. While a few competitors have found small niches to carve for themselves, nobody even attempts to compete with these companies head-on anymore. Nobody would even take them seriously.

While the quality of those services remain high, you don't have to look very far to find complaints of these companies abusing their power, be it with snooping on customers' private data and selling it to advertisers, strong-arming product manufacturers, or manipulating news feeds. If any of these companies had significant competition on those spaces, they might be forced to be better or more transparent in order to win customer trust. But that won't happen, because you don't really have a choice.

What would happen if we had a total monopoly in anime streaming? It's hard to predict. Probably not a lot at first, and things would seem pretty good. But after a while the company would get complacent, and stop trying so hard. Companies that simulcast today pretty much break themselves in the rush to license, subtitle, dub and encode tens of hours of anime every week. I would bet that after a while we would stop getting shows so quickly. And the fees being paid to Japan for them would probably go down.

Anime production in Japan is increasingly dependent on license fees from companies that stream to the West. Without competition for new shows, those license fees would decline substantially. Japanese anime producers are so concerned about this that, six years ago when Crunchyroll had a near-total monopoly, several of them cooperated to start a site called Daisuki to compete with them. The site had a lot of problems, fans didn't like it, and it failed, but other competition sprung up eventually.

The current companies streaming anime are pretty unlikely to work together, in my estimation. Amazon has zero incentive to work with Funimation and/or Crunchyroll. The whole point of their content-buying odyssey is to boost their streaming service to the point where people consider it competition to Netflix. The only way they'd be interested is if they bought both companies to add their subscribers (and given the current owners of both companies, I don't see that ever happening). HIDIVE isn't much of a thing yet. Hulu is still getting stuff from Viz, who has their own priorities (that don't include any of the previously mentioned companies). For all of these companies to work together, they'd have to have identical goals and ambitions that compliment each other. That doesn't seem very likely.

You could say that the pirate sites are competition enough, and unfair ones at that (since they don't have to license, translate or dub anything). And it's true that not being able to get everything immediately for very cheap all in one place might be pushing some more people to stream illegally. But having a sustainable competitive ecosystem is important too, and balancing that with keeping services affordable to fans is the only way anybody in this industry is going to make a living.

Thank you for reading Answerman!

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Anime News Network founder Justin Sevakis wrote Answerman between July 2013 and August 2019, and had over 20 years of experience in the anime business at the time. These days, he's the owner of the video production company MediaOCD, where he produces many anime Blu-rays. You can follow him on Twitter at @worldofcrap.

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