Why Would Crunchyroll Partner With Adult Swim?

by Justin Sevakis,

Jacob asked:

It was recently announced that Crunchyroll and the Cartoon Network anime block Toonami were forming a partnership. For me I have a hard time understanding why they would do this. For years Crunchyroll has been one of the top two anime streaming sites for North America with over a million subscriptions. On top of that Crunchyroll keeps getting bigger and bolder every year with now having their own convention and award show as well. It just seems like a weird move to me that they would want to partner with a Cartoon Network especially considering the younger generations “cut the cord” attitude and the on-demand streaming culture we have turned into. My assumption would be to promote the dubs of the anime they got the exclusive right to as well as promote the website. To me just putting those dubs on the website would be just as effective. For Toonami they will put on anything that will get viewership and is affordable which is why they have anime from every company on their block. Is there something I am missing in this partnership that I am overlooking?

There's a lot that makes sense about the recently released Crunchyroll partnership with Adult Swim. The first is fairly obvious: both companies now share a parent company: they are owned by WarnerMedia, and are now essentially sibling companies. It would make good sense to work together, and in doing so, be able to establish new brands and new franchises into the market with a lot more of a splash than either would be able to do separately.

Crunchyroll is big, for a streaming site. They have 45 million unique visitors and 2 million paid subscribers. That's a huge achievement. And while a majority of those viewers are in North America, that total number is spread out in various degrees all over the world. So we don't really know how many of those viewers are in the USA, but given how traffic on English anime websites seems spread out, I'll bet it's roughly half to 2/3 of those numbers.

But Crunchyroll has one major weak spot: it's very difficult for a new viewer to "stumble on" its shows and discover them if they aren't already looking for anime. Of all of the people that generally think favorably enough about anime to watch one if it looked interesting, but don't necessarily consider themselves fans, very very few of them would go to or download the app to look for shows. They already do probably have Netflix, Amazon Prime and possibly Hulu. And many of them have cable.

Adult Swim, sharing a channel with Cartoon Network, is available in 94 million American households. Not all of those households watch Adult Swim, but the channel is there. While they do have a core set of viewers, just being a fairly low-numbered channel on most cable lineups mean that they get explored by a lot of people at random, looking for interesting things to watch.

Are many people excited about the cable TV business these days? Definitely not -- "cord cutting," (the term for people ditching cable TV, usually in favor of internet-based entertainment) is accelerating, and cable/satellite providers are losing subscribers at a record pace. Young adults, the core demographic that watches anime, especially seems disinterested in cable TV. Many of the cable networks, especially ad supported ones, face uncertain futures.

However, none of that changes the fact that Adult Swim is still huge, and immediately available in a TON of American homes that do not even have a free Crunchyroll account, let alone a paid one. Adult Swim can reach people that have never heard of Crunchyroll. They can reach people that have never heard of anime, just by snagging eyes that are channel surfing. They can also reach people who don't have good internet connections and can't reliably stream video.

The deal works well for everyone. Adult Swim gets access to new, hot anime content. They get to take advantage of Crunchyroll's place on anime production committees, industry connections, and overall stature in the business to participate in new shows and projects that were way beyond their reach before. Crunchyroll gets a new revenue stream for the shows they license and invest in, and they will likely get significant branding opportunities with Adult Swim.

The two companies have very little to lose by working together. They serve pretty different audiences, and do so in completely different ways. By collaborating they can both potentially reach many more people and get a lot more attention for their shows. They can pool their money on marketing, so they might even save money. In my opinion, it's a no-brainer.

As the different brands in WarnerMedia's new "Global Kids & Young Adults" unit start to join forces, I would look for all of those brands -- Adult Swim, Crunchyroll, VRV, Rooster Teeth, Cartoon Network and Boomerang -- to collaborate on more and more, and possibly combining.

It's a crazy time of consolidation and rearrangement in the entertainment landscape, and that includes both of the major anime companies for the English speaking world. I would bet that we won't even recognize the media landscape in another few years -- that's how fast things are changing.

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    Justin Sevakis has worked in the anime business for over 20 years. He's the original founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap.

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