Answerman

Why Is Crunchyroll On So Many Production Committees?

Recently, Crunchyroll has increased the number of anime titles in which they are a member of the production committee. What benefit does being part of the production committee have over just licensing a title for release, and why is it only Crunchyroll using this model to acquire titles?

The biggest reason for any distributor to be on a production committee is that they're the partial owner of the show, because they contributed money to the production -- in other words, they're a co-producer. As such, they sign on to the project with the ability to guide important decisions over their jurisdiction of the Anime Kingdom: in Crunchyroll's case, worldwide streaming rights. Any company who co-produces automatically gets the rights to that show that were agreed to when the committee first forms. In other words, they don't have to bid on the show later. They automatically own it.

This is hugely important, and the driving reason why foreign publishers have joined production committees over the years. Competition for new series is so intense between distributors that automatically being able to shut out the competition eliminates a huge headache for these companies. And Crunchyroll is far from the first to do so. ADV Films was on several production committees (for shows like the original Kino's Journey; Geneon USA was on the production committee for shows like Tenjho Tenge and Ergo Proxy; even Media Blasters and Central Park Media co-produced a couple of OVAs back in the 90s. Funimation is also part of many production committees, and their purchase by Sony last year is thought to open many new doors for them.

But the benefits of co-ownership go far beyond having "dibs" to the show. A single season anime series usually runs about US$3.6 Million to produce, and depending on how many companies are on the committee, it could be that co-producing the show actually costs LESS than bidding on the rights to the show later. What's more, if any aspect of the production is successful, ALL of the co-producers get a share of the profits. So, say a new series is a bomb in America but does very very well in China. If Crunchyroll was part of its production committee, they would get some revenues from that success in China, even if their own release was a failure. If a company approached Crunchyroll to do merchandise or a game of the series in question, Crunchyroll would still need to get the approval of the committee, but as a member, the process would be comparatively very quick and easy for them.

Investing in a new show is a very long road, and has its pitfalls. Being an active member of production is quite a bit of work, and involves a lot of regular meetings in Japan, where every aspect of the show and its release are discussed. Series take YEARS to get off the ground, as anime production studios are currently booked solid for at least 3-5 years in advance. And from early designs and an original work, it's very hard to tell if a show is going to be good. A bad or dysfunctional committee can easily turn destructive, and make a lot of bad decisions that can completely derail production or even cause the total loss of funds before a show even gets made.

Production Committees are a hard party to get an invitation to. Production committees make decisions by consensus, and are therefore assembled only from trusted members of a very small clique of executives at known companies. There's a pecking order to them -- there are committees made from very successful "cool kid" investors, and ones made up of lesser producers and companies. While the recent boom in streaming anime both in the West and in China has made Japanese producers open up these committees to foreigners, it's been a very slow process, and it's taken a very long time for both Funimation and Crunchyroll to earn enough respect to sit at the "cool kids' table."

Since the lead time for new productions is so long, it will be years before we see the full extent of the involvement of both of these companies in new series as they come out. But anime is now a global medium, so these companies' involvement in production committees is something that is only going to ramp up.

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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.