August 21, 2021

And then there was one

Okay, two.

Sony's Funimation Global Group finalized its acquisition of Crunchyroll from AT&T. In the North American market, that reduces the trio of Crunchyroll, Funimation, and HIDIVE to HIDIVE and whatever brand name emerges from the merger. All we know from Funimation is that they intend to "create a unified anime subscription experience."

It will certainly be more convenient to access both catalogs at once with a single website and app (hopefully using the embedded subtitles model employed by Crunchyroll and Netflix), though the apps and websites are currently so different, I'll be curious to see how they pull it off.

But the real question for anime fans is what will happen to HIDIVE and its parent company, Sentai Holdings. As of January 2020, HIDIVE had 300,000 paid subscribers. Crunchyroll has 5 million. The merger with Funimation will double that. That's one heck of a Pareto distribution.

In 2019, Sentai got a $30 million cash infusion from the Cool Japan fund, peanuts compared to Sony's $10 billion net profit in 2021. The U.S. Justice Department raised antitrust concerns when the acquisition was announced, so Sony might refrain from taking over the entire anime streaming world simply to avoid raising all those legal hackles.

Although it kind of already has.

Unlike specialized streaming services and other content providers, the Sony group blankets the entire anime sector: Aniplex is a production company; Sony Interactive Entertainment sells PlayStation; Animax Broadcast Japan is the country's largest fee-based anime channel; and Funimation is the biggest Japanese anime distributor in the U.S. Meanwhile, Sony Music Entertainment (Japan) has an exclusive label for anime songs.

According to the Otaku Entrepreneur, Sony now owns 86 percent of the market. A staggering 92 percent if you toss in Aniplex of America. Like Microsoft and Apple at the end of the 1990s, when Microsoft grabbed 97 percent of the PC market, it is in Sony's self-interest to at least keep the appearance of competition alive amongst the pure-play streaming providers.

One of HIDIVE's saving graces may be that Sony's domestic competitors in Japan won't want to pad Sony's bottom line and so may turn to providers like HIDIVE and Netflix. I think Netflix should do a content-sharing deal with HIDIVE. Or buy Sentai outright. Netflix has a good batting average with original anime content, and its catalog of licensed anime titles is top notch.

Together with HIDIVE, Netflix could become the Apple of anime. A smaller market share, but curated and high end, with an app that (almost) always just works.

For the time being, though, I am a spectator to these events, having unsubscribed from Crunchyroll, Funimation, and HIDIVE. Netflix, Tubi, and dLibrary Japan alone provide me with more content than I have the time to watch. But the more anime Netflix can acquire the better.

Related posts

Tubi update
Streaming Japanese
dLibrary Japan update

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