Why Did Crunchyroll and Funimation Divorce?

by Justin Sevakis,

Jonathon asked:

Funimation ended the partnership with Crunchyroll recently, and a bunch of their shows are getting pulled off of VRV, which sucks. Why did this happen? What will happen to the two companies? Should I be concerned that one of them is going to go away?

When it was announced about a year ago that Sony Pictures was buying Funimation, I predicted this would happen. The partnership between Crunchyroll and Funimation (and I call it that because the two companies didn't really combine in any meaningful way) was always one of convenience: Funimation did dubs and physical media better; Crunchyroll did quick subtitle translations and streaming better. Competing against each other AND Amazon AND Netflix simply didn't make sense at the time.

Now that both Crunchyroll and Funimation are parts of big international entertainment and communications conglomerates, it's a much different story. Both are now in the position where they're expected to feed their parent company's interests, which include their own streaming platforms, their own library of content, their own partners and their own distribution. Their goals no longer align like they once did.

There were other signs that the partnership wasn't always a good one. I heard rumblings behind the scenes of culture clashes and nerd tribalism that affected working together, which happens during a lot of mergers and partnerships like this one. The deal was a short-term one -- only a couple of years before it had to be renewed -- and given the two companies' long history of competition, I think it's reasonable to speculate that maybe they never quite got around to fully trusting eachother during this short period of cooperation.

But no matter. It's over now, and a number of titles are disappearing off of each other's sites. The two did license a huge number of titles jointly, however (including several yet to be released, where they're even on the production committee together), and those will be staying put (although most of Funimation's dubs are being pulled from Crunchyroll). It's all very confusing, since every title was a slightly different arrangement.

Neither company is in any danger of going away. While WarnerMedia has been trimming the fat off of their new acquisitions by closing down services like DramaFever and FilmStruck (the latter of which is already being replaced after an outcry), Crunchyroll is decidedly not "fat" -- it's the most successful niche streaming service in the world, with 2 million subscribers and turning a profit. While I can't guarantee what will happen to the rest of the VRV collection of services, Crunchyroll is in no danger. It's the envy of the digital media world. VRV and Crunchyroll may even form the basis of WarnerMedia's new streaming platform, expected next year.

Crunchyroll will soldier on, much like it has been doing. They've already announced that they'll be filling the void left by producing a lot of their own dubs, though I highly doubt many of the vendors they're using are up to the sort of speed Funimation is capable of, it isn't impossible to build something with similar speed and quality. And HiDive, which represents much of Sentai Filmworks' catalog, has already replaced Funimation on the VRV service, making new dubs like Food Wars! and other shows available.

Sony Pictures also just paid a lot of money specifically to buy Funimation, and they're definitely not keen to let their investment go to waste. That said, this move indicates that control of the company will likely be shifting entirely to new overlords soon. That means that 2019 is going to be a year of major transition and trauma over in Flower Mound. I suspect some layoffs are in store, as well as transitioning away from Universal Pictures Home Entertainment's distribution, since that's something Sony can do in-house. Transitions like that are always rocky, and may result in some temporary shortages.

I would expect some level of continuity for consumers, but to be honest, I don't know if we'll be able to recognize the company in another year. I don't know what their goals are in terms of licensing strategy, distribution or streaming, and I suspect that most Funimation employees don't either. But the company is definitely not going away, and neither are most of its flagship titles. I expect the dubbing studio to be fairly safe as well, since it's more cost effective and more efficient than nearly any operation of its kind. (Sony Pictures typically hires LA area dubbing studios for its projects, which typically cost far more).

Yeah, safe to say 2019 will be very interesting for both of these companies.

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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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