Those of us who are old enough to have clear memories of video stores may remember the time when “Japanimation” comprised a single bottom shelf of battered VHS cases near the back of the shop. These days, however, anime distribution in the US is a billion-dollar business—or, more specifically, a $1.2 billion business, as that’s what Sony is paying in cash to acquire Crunchyroll from AT&T.
Crunchyroll has more than 90 million users in 200 countries, including more than 3 million subscribers to its streaming service, the companies said in a joint press release. It also distributes mobile games, manga, and merchandise and manages events. Sony will eventually be folding Crunchyroll into its existing Funimation anime distribution business.
Crunchyroll currently falls under the WarnerMedia division of AT&T, and it’s not a surprise that AT&T is selling it off. The company is hemorrhaging pay-TV subscribers and trying to sell off the DirecTV division, which it paid $49 billion to acquire only five years ago. (Recent reports say potential buyers are offering figures closer to $16 billion.)
The day before WarnerMedia and Sony announced the transaction, AT&T CEO John Stankey told investors that the company would be shedding “tangential” assets that “distract” from the company’s core focus, and Crunchyroll seems to fit that description. WarnerMedia executives back in August kicked off a restructuring effort that would “prioritize” HBO Max and “streamline” the company’s other streaming operations. That reorganization is expected to result in thousands of layoffs overall.
The move also benefits Sony in an increasingly competitive streaming media environment. As Polygon points out, Sony has for at least the last five years been snapping up anime distributors around the world, including providers in France, Australia, and the US. The acquisition doesn’t necessarily raise competition concerns on the consumer end—Netflix, for example, not only distributes other studios’ anime series but also commissions some of its own as Netflix originals. But the deal does expand Sony’s vertical integration, giving it direct access to more links in the chain that run from animation through dubbing, distribution, and merchandising and increasing the leverage Sony has in the anime industry overall.
The deal is subject to regulatory review, and the companies will continue to operate independently until the transaction closes sometime in 2021.