November 10, 2016

Crunchy Fun and the Yahoos

As Dave Barry would say, it'd make a great name for a band.

A few months after applying Jack Welch's "Rank-and-Yank" model to its anime offerings, Hulu still has a ton of anime in its catalog. But like Netflix and Amazon, Hulu wants to turn itself into HBO, and so has dumped its "free" advertising-sponsored model.

That's not quite the right metaphor. Netflix wants to be HBO. Hulu wants to be Comcast. And with its recent deals with Disney and Fox, it's getting there.

I rather like the Hulu model (aside from it succumbing to the inexplicable compulsion to mess with a perfectly fine interface until it's useless), and I believe that streaming services are the future. I just don't want to pay for all of them. It's the new old periodical paradox.

Hence the attraction of a one-stop shop like Hulu as a DVR-in-the-cloud. It would certainly be cheaper than adding a DVR option to my Dish subscription. And a whole lot cheaper than the typical cable package. I plan on cutting the cord before getting the cord.

I could similarly rationalize signing up for Amazon Prime mostly for the free shipping option.

I've maintained my DVD Netflix subscription for the occasional new movie and old television series I missed. It's DVR-by-mail. (Never underestimate the bandwidth of the regular mail.) I have Dish to get TV Japan, an a la carte subscription.

Speaking of a la carte, Crunchyroll is an all-anime provider (with some Korean offerings). And no ads with a reasonably-priced subscription. The only hitch here is that while there's a lot of overlap, Hulu and Netflix and Amazon and Anime Network still have their own exclusives.

Thankfully, that list of exclusives just became smaller.

Funimation (the biggest anime distributor in the U.S. market) and Crunchyroll realized there was nothing to gain by fragmenting the market further and partnered up. Especially when Amazon and Netflix can dig some change out of the couch cushions and outbid them any day of the week.

In 2015, Netflix spent almost $5 billion on programming, Amazon a little more than half that. CBS spent $5.7 billion on television programming, while the Disney (ABC) and NBC media groups spent $12 and $10 billion respectively. A big chunk of that still goes to scripted shows.

(To give credit where it's due, Netflix is streaming the live-action series Midnight Diner. A live-action series! Hulu abandoned its live-action Japanese series.)

Crunchyroll has 20 million users registered though its "free" portal, and has also done a licensing deal with manga publishing powerhouse Kadokawa, which itself bought a controlling interest in Yen Press and partnered with Hachette.

Crunchyroll is capitalized at less than half a billion (by the Chernin Group and AT&T) and has one percent of Netflix's paid subscriber numbers. It's had to rely on strategic alliances rather than deep pockets, and pours its resources into a single market segment with a die-hard user base.

Funimation will still distribute to the rest. With Crunchroll, Funimation is essentially creating a "factory outlet" with a focus on the die-hard fans. Funimation will concentrate on dubs, Crunchyroll on subs and real-time streaming.

The only remaining problem is walled-garden exclusivity. The bite for me was that Netflix runs out of Hikaru no Go DVDs at episode 45, right in the middle of the big competition. And only Hulu had the whole series.

But all is not lost! Hulu handed its whole "free" ad-driven service to Yahoo. The service is called View. I'd swear they didn't even move it off the Hulu servers, just slapped on the Yahoo logo and updated the DNS addresses.

The Yahoo interface is rudimentary at best. If they've got a queue, I can't find it. But I will say this for Hulu: unlike Crunchyroll, its ad engine was pretty darn good and that's what Yahoo is using (again, Crunchyroll is worth a subscription to get rid of the annoying ads).

If Yahoo is serious about making View work, it could turn itself into the syndicated subchannel of streaming. Not a bad direction for the directionless Yahoo to go. In other words, a streaming channel that consolidates all of your favorite reruns on a single ad-supported site.

The goal, after all, is to wring every last licensing penny out of every last piece of IP. Streaming is probably the best way to do that. All Yahoo has to do now is make its service actually user-friendly. Which I fear may prove to be a bridge too far for Yahoo.

But at least I can watch Hulu exclusives like Matoi on Yahoo View, so we may have the makings of a working solution here for us penny-pinchers.

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