Forum - View topicAnswerman - Why Are Funimation And Crunchyroll Getting Married?
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dragonrider_cody
Posts: 2541 |
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I don't think that he meant that there was no market for cheap releases, just that premium products at a higher price point are more profitable. Selling a much large number of units at a lower price doesn't always guarantee you will make more money. You're overall revenue may indeed up higher, but less profit per unit could end up causing you to have a lower profit overall. Cadillac and Lexus, despite much lower sales, are more profitable than Chevy and Toyota as a percentage of their revenue. Apple and Samsung make more profits from the mobile phone market than all other smartphone makers combined. Actually, by nearly all measures, Apple makes more profits from its iPhone line than the rest of the industry makes from the entire Android ecosystem. Amazon is the largest internet retailer in most of the world, yet its profits are very low, and until recently were nearly non-existent. We've definitely seen moves in the R1 industry towards a more premium home video release model. Sentai and Funimation have both put out collector's sets that cost upwards of $150, and in many cases those releases sold out fairly quickly. Many of the R1's have also increased their regular MSRP's slightly to help their overall profitability and revenue. But as Sentai's Selects and Funi's SAVE and Classics label show you, there is also a market for lower coat releases. However, those generally come out some time after the initially more expensive releases. But another problem that contributed to the collapse of the R1 industry nearly a decade ago was he quick turnover between more expensive and more profitable singles, and the less expensive box sets. Unsold singles piled up because too many fans just started waiting for the cheaper box sets. You have to balance the two methods in a market like North America. The industry can't survive on super cheap box sets because the market just simply isn't large enough. While they could probably survive on an Aniplex or PonyCan model, the maket would be significantly smaller and overall revenue would be much lower. |
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Animegomaniac
Posts: 4081 |
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1 This has been bothering me for awhile; Was I the only one who noticed that Sentai only licensed one show this Summer season? A sequel series which I still can't find anywhere else but CR? They were doing 5 or more shows a season, mostly as pick ups from CR but that goose was cooked last season... now we know why. 2 Sentai's dubs have been steady if not increasing; This is a secondary to the licensing cost issue because it's now cheaper to dub a show than license it. It's why we got a mass listing of Sentai shows that will get a dub rather than the standard "look at what new shows we got" announcement. I really expect them to go back to necrodubbing {tm me} in order to both increase their demand and name recognition. It's what MB has been doing for the past few years. 3 Funimation's licenses were for both streaming and physical releases and they just can't say "Ok, that show was a stinker so we're not going to release it." if they want to continue doing business. Japan's kind of fixated on physical releases, something that CR had to deal with in their own way. 4 CR wants it all and they now have the money to do it. It's a matter of how pragmatic you want to be in saying that Funimation saw the writing on the wall and folded early or that they saw an opportunity... at being someone's second banana. Yeah, I still see this as a "Well, we were going to lose eventually" move on Funimation's part. I mean, they are pulling out on the "first run simulcast" game entirely in favor of the dub delay right? Even for the shows they directly license... which is an insanely dumb move on their part. I mean that can't be right, right? I mean, they can only pull off the "well, you already know what's going to happen" second running if they were the ones to run it in he first place. 5 Let's say Sentai wanted to license a new upcoming show show so they offer an amount; CRFU... it's like poetry, really.... offers the higher amount because they want it all. This is to stop the bidding between the two of them not other companies. Sentai's done. |
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getchman
 Space CowboyPosts: 9120 Location: Bedford, NH |
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unlikely. competition isn't the problem, Toei wants it on TV. until that can happen, they wont open negotiations |
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Renasviel
Posts: 143 |
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I felt like Funimation was far inferior as a subbing service to Crunchy anyway, and more expensive, with a smaller range of shows. I'm happy because this means, providing titles actually come over here to the UK, that we actually get more as a whole every season.
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dragonrider_cody
Posts: 2541 |
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@animegomaniac
When I brought up Sentai's dub output, I wasn't specifically speaking about the past year or so. True, over that period of time, their output has remained the same. I was speaking over the last four or so years. There was a 12-16 month period a while back where Sentai dubbed almost every single show they released. The only exceptions were a few follow up seasons, where earlier releases were sub-only. So while Sentai's dub production has remained steady for the past year or so, it's now where near its peak a few years ago. The continual climb of licensing costs likely had a lot to do with that. Sentai's even had a month or two this year where no new dubbed titles were slated (only license rescues or re-releases.) Also, both Funimation and Crunchyroll have had licenses that they've streamed, but not put out on physical media. Tatami Galaxy immediately springs to mind for Funimation. And until their older deal with Discotek and their current one with Funimation, their only physical release was 5cm Per Second. While I'm sure the Japanese would love the extra risiduals from a physical release, unless Funi and CR sign some really crappy contracts, they probably aren't going to force them to release something on physical media that won't sell and will cause everyone to lose money. Even Sentai and Discotek have titles that they currently only stream, and don't appear to have plans for a physical home video release. I simply pointed out that less bids COULD ultimately mean lower licensing costs. If it doesn't, then one of the biggest drivers of this deal means nothing. Even Justin, who has extensive experience in the industry, stated in his article that the Japanese rights holders probably won't be very happy if licensing costs drop too low, and they could take some counter steps to help keep their revenue stream higher. Ultimately, you are correct in that whoever offers the most money will continue to get the licenses. I was just pointing out that when a bidding war goes from a four or five horse show, to a three or four horse show, it could ultimately be a net positive for the R1 industry. I don't think you can find anyone on this side of the ocean that thinks $200k an episode is sustainable or a good thing in the long term. And no, your not the only one that noticed Sentai hasn't acquired any fall shows, and only had two summer shows. I simply stated, as many others have, that it's likely to do with the high licensing costs. I also pointed out that Sentai has enough content to keep them putting out new product for at least another year, assuming they don't make changes to their average number of releases every month. That's far from "done", or even being in Media Blasters or Discotek's place (who have far, far smaller libraries with less new product in the pipeline.). Not to mention, this deal is only days old. We don't quite yet known how everything will fall into place, how it will affect the market, and how long it will last. The two companies are partnering up, not merging or any other combination. The deal could be successful and last years, or it could fall apart like Funimations partnership with NicoNico. Only time will tell. People have been writing Sentai's obituary since the day it was first announced. It's still around and still releasing and licensing shows. It's definitely to early to write them off, or anyone else for that matter. |
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peno
Posts: 349 |
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Mind that this is just my speculation, but based on what we know. It was said that Toei wants TV deal for Dragon Ball, but that is speculation never really confirmed anywhere. What we know, however, is that second half of Kai is already dubbed, despite being licensed and it's obvious Funimation could not do that dub (since it would be break of law if they even tried to dub something they don't have rights to, and we know they still don't have them). So, who dubbed it? The only answer is, Toei. They are the only ones who could legally dub it. Now, this is where I'll slip to the speculation, but I doubt Toei dubbed it to save Funimation the workload. Toei already had some bad experiences with North American licenses and we all know, they are going to handle Digimon Tri inhouse. I wouldn't be surprised if Toei wanted to do the same with Dragon Ball, with wanting to keep the NA license and only grant Funimation the distribution rights, but Funimation want it fully licensed to maintain the whole control (after all, Dragon Ball is Funimation's most significant franchise). If that is true, I could imagine that now, with this deal with Crunchyroll, Toei may have new push on Funimation to accept this distribution deal, since they will do the same with Crunchyroll titles. Of course all this is just speculation, but this is how the situation seems to me. |
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Redbeard 101
Oscar the Grouch
Forums Superstar  Posts: 16935 |
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If they do that then they'll wind up being done as they overstretch themselves much like Sentai did before when they were ADV. Yes they had other ventures at the time but the bottom line is ADV tried to do too much and it hurt them. If FuniRoll tries to do the same and get ALL the titles they'll puff up like a balloon and eventually pop. So here's hoping they don't make that mistake. Here's also hoping they give Sentai more then just the scraps from the dinner table as well. |
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Angel M Cazares
 Posts: 5424 Location: Iscandar |
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One of the first things I thought when Cruchymation was announced is that Funimation is going to lose a lot of content with their sub stuff migrating to Crunchyroll. On the other hand, Crunchyroll is gaining a lot of new content. That alone makes Funimation seem like a loser in this deal. At this point I agree with you that Funimation is probably thinking that Crunchyroll is eventually going to beat them in the simulcast market. Just look at the great stuff Crunchyroll has picked up the last two seasons. I personally don't want Funimation to be diminished, and I hope for their sake that enough people want to subscribe to a dub only service with essentially delay casts.
I also doubt high licensing costs have much to do with Sentai cutting back on dub productions. I think Sentai realized 2 or so years ago that dubbing shows with low chance of high profitability was a very dumb idea. And remember that dubbing (especially in non-Union Texas) is not that expensive. IIRC dubbing a single episode in Texas can cost around $7,000 per episode. Whereas licensing a single episode is reportedly costing $200,000. If a company is willing to spend $1,000,000 or more to license 12 episodes, an extra $85,000 for a dub is minuscule. |
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mangamuscle
Posts: 2658 Location: Mexico |
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In the short term Crunchy is the obvious winner. But if they do some hard work, Funimation will be the bigger winner in the long run. How come? As it stands, Crunchy's sub only subscribers are more hard core, while Funi's dub only are more mainstream. It is a no brainer that there are more mainstream than hardcore fans. Funi just needs to keep showing more of its shows from previous seasons in toonami/adult swim so that more people become aware. Also, Funi noiw can really focus on dubbing, I cam bet top shows like attack on Titan 2 will be dubbed at the same time as the japanese dub, that would attract a lot of casuals that have seen the first season. |
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DerekL1963
Subscriber Posts: 1113 Location: Puget Sound |
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8% of your total costs is "minuscule"? Um... no. That's a very significant hit. The level of hit that causes financial people to not sleep well at night because it can be the difference between profit and disaster if they figured the number of additional people who'll pay for a dub wrong. Depending on your overhead and margins, even as little as 1-2% hit can be significant. (Especially if the payout period is long.) |
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dragonrider_cody
Posts: 2541 |
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@angelmcazares
I'm sure that definitely was part of the reason as well. I wasn't saying that high licensing costs were the only reason, but I'm sure they played a part in the decision. Ultimately, they have to take a look at how much revenue and profit they expect from a certain title. If they are paying a large amount upfront just for the license, it would definitely give them less wiggle room on budgeting a dub. When you are talking about a smaller company like Sentai licensing a show with costs in the six digit range per episode, that $85,000 could be make or break for them. Sentai has a very large library, and they can afford to take hits on a few of their shows, but they certainly want the majority to be profitable. Not to mention, if a show truly exceeds expectations, they could always dub it later and re-release the show (as they've done in several instances.) Though honestly, I doubt Sentai is writing out too many $2.5 million dollar checks for shows. Even when they were very active in seasons past, they tended to get many of the niche otaku oriented shows, with only the occasional big hitter like Parasyte thrown in. Not to mention, many of the more popular shows they picked up tended to not be announced until after the season was over, so they could have been instances where they acquired home video and streaming rights after someone else only picked up the simulcast (which would likely affect the cost of the license.) Also, another route that I've been thinking that Sentai could take, would be to team up with anime distributors in the UK and Australia. They have a good relationship with Animatsu, and worked a lot with MVM in the past. There is also Hannabee in Australia, who Sentai has authored several releases for. Many of Sentai's Region A/B bluray discs will actually pay the Hannabee logo when they are used in Region B player, as the two shared authoring and replication costs on several releases. There have even been rumors, though not "officially" confirmed, that Siren, Hannabee, and MVM have even help fund some of Sentai's dubs in the past, particularly when they first started dubbing releases. They could all work together and pool their resources to license titles, and then later share replication, production, and authoring costs. It could even help increase dub production, because costs would be spread over a larger region. |
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relyat08
 Posts: 4125 Location: Northern Virginia |
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Also, they are handling Home Video. They will have that mainstream, dub-only crowd, which seems to still be pretty sizable, and, on top of that, they have their home video releases. We don't know exactly what the profit-cost distribution for CR's home video releases is going to be, but I would expect that Funimation stands to gain the most from that side of the deal. All in all, it could easily end up being just as good for them as CR. I'll be a CR subscriber, for sure, but I'll probably also buy many of Funi's Home Video releases, so at least as far as I'm concerned, they will both be getting plenty of my fan money. |
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EmperorBrandon
Encyclopedia Editor
 Posts: 2209 Location: Springfield, MO |
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They did license Momokuri too. That's streaming on The Anime Network as well as Crunchyroll. Though it is odd that they don't have Food Wars S2 on TAN like they usually do. |
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dragonrider_cody
Posts: 2541 |
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It's important to remember that while Anime Network and Sentai are closely related, work out of the same building, and share a number of staff on their payrolls, they are still legally separate entities. TAN still has to actually pay for shows from Sentai and sign a distribution agreement with them. Sentai can't simply slap them up on the site like Funimation can do with theirs. It adds a little level of complexity to their streaming deals, and can lead to delays in getting shows and also dubbed versions. Not to mention, while streaming is a growing part of TAN's business, VOD is still their bread and butter. It accounts for the vast majority of their revenue and profits. While there isn't much growth potential there, as cable subscriptions are trending downward in the US and Canada, they still have to focus a lot of their resources and investment on the service that "keeps the lights on". |
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aereus
Posts: 574 |
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The market already tried running the pricepoint down for more sales—that's when Geneon and ADV went bankrupt and the majority of the US market collapsed. Even at $20 for a series, people weren't buying in enough numbers to recoup the cost of licensing. We're apparently in another cycle where companies are driving up licensing costs dramatically. For example, the average cost per episode to produce those shows isn't even $200k, yet the English licensing costs exceed the production cost even before the Japanese home market is factored in. |
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