Infighting and external pressures are cornering an anime giant as Crunchy Roll fight to hold ground, according to a recent Bloomberg report. Any anime fan worth their salt is well aware of the fact that giants fall, even if at one point these giants seemed very heroic. Crunchyroll is one of those giants, ceding ground to Netflix in 2024 and ceding its dominance over the anime market to competitors on all sides.
For years, Crunchyroll has maintained complete dominance over the anime market as a licensor of exclusive anime and simulcasts. In recent years, all enthusiasts who accessed anime through legitimate means, more or less, subscribed to Crunchyroll. What's most interesting about the developments with Crunchyroll is that the enthusiast market is unlikely to go anywhere - much larger tidal shifts in the anime distribution market have dethroned the king of anime streaming, which seems intent on also becoming dismiss, according to the new report published by Bloomberg.
A Brief History of the Crunchyroll Acquisition
Crunchyroll's problems really started after being acquired by Sony
Crunchyroll's story of difficulties, according to Bloomberg, can be partially attributed to its acquisition by Sony. In 2021, Sony acquired Crunchyroll for a considerable sum of $1.2 billion dollars. In hindsight, the change was perfectly reasonable. The 2020 COVID pandemic led to massive demand for anime as more people were stuck indoors. Being at the top of the industry, Crunchyroll was a natural acquisition for any for-profit company looking to capitalize on the newfound intrigue.
Unfortunately, the change was also accompanied by other difficulties. In recent years, Crunchyroll has gone through several mergers – some, of course, more complicated than others. In 2017, Sony already acquired Funimation, which previously distributed most of its titles through Crunchyroll. In 2018, the two companies drastically parted ways when Crunchyroll removed hundreds of Funimation titles from its service, as Funimation is no longer affiliated with third-party streaming services.
For years, Funimation has reigned supreme on the anime circuit as one of North America's top anime distributors. The company even had its own streaming service. In April 2024, Funimation closed its doors and merged with Crunchyroll as a result of Sony's acquisition of both.
Crunchyroll also swallowed longtime anime retailer RightStuf, a cornerstone of the industry since the late 1980s, merging many of its products into its own Crunchyroll Store. The bottom line here is that since being acquired by Sony, Crunchyroll has been striving to dominate the industry, leveraging its influence and market position to effect colossal changes to the industry landscape. A recent report from Bloomberg, however, sheds some light on how and why the anime streaming giant is now struggling to maintain its position.
Crunchyroll faces infighting and mismanagement
The Funimation merger led to structural changes that didn't work out well
Since 2021, Crunchyroll's subscription base has tripled in size. However, this number doesn't account for the fact that the popularity of anime in general has exploded in recent years. Given the anime's much broader viewer base, Crunchyroll is really struggling. It all goes back, at least partially, to the Funimation merger. As Bloomberg puts this in his new report on Crunchyroll:
Current or former employees describe Crunchyroll's new management – particularly Funimation's – as out of touch with the employees and anime fans the company once prioritized. Some executives classify anime as “children's cartoons,” they said, and resist hiring candidates who describe themselves as fans. Customers weren't very happy either. Some were furious when Crunchyroll announced that digital copies of anime purchased through Funimation would not survive the transition to the new platform.
Suffice it to say: the Funimation merger didn't go off without a hitch. One of the first points of conflict comes from internal changes, which is perhaps to be expected considering Bloomberg's statement that Crunchyroll employees would once say "at least we don't work at Funimation" - a timely and unfortunate throwback. Primarily, the Bloomberg report focuses on the case of Markus Gerdemann, the senior vice president of creative marketing who Funimation courted due to his success at Netflix despite his lack of anime experience, and who was absorbed into Crunchyroll with the merger.
In many ways, Gerdemann is emblematic of the cultural change and mismanagement at Crunchyroll since the merger. Bloomberg interviews with several current and former employees of the streaming platform revealed that many employees believe Gerdemann does not have the experience necessary for his role, and troubling allegations have emerged about his impact on Crunchyroll's work environment. Gerdemann soured Crunchyroll's relationship with major industry boosters like Toho and Toei and contributed to Crunchyroll's reduced negotiating position relative to other major streaming services like Netflix.
As tempting as it is to read the Bloomberg report about Gerdemann as a villain who, through incompetence and/or malice, wrests control from the people at Crunchyroll, a much more realistic reading is that Crunchyroll became poorly managed. Gerdemann is just a cog in the machine — a machine that Crunchyroll employees past and present describe as lacking direction in the Bloomberg report, and where figures like Gerdemann have free reign to make decisions that “cost the company money.” The acquisition of Crunchyroll, for better or worse, has helped it become yet another player backed by big money and hungry for dominance in a field where the giants of the anime industry appreciate and desire competition – and where mistakes cannot be made. are much appreciated.
Needless to say, there was also a lot of competition. As platforms like Netflix, Hulu, Max, and Disney+ work to expand their anime catalogs, they are also gaining more market share. Licenses are increasingly sought after and exclusive licenses are increasingly valuable. Crunchyroll's position has always been somewhat occupied by companies like Hulu, which has hosted a huge anime catalog for over a decade. But for more niche offerings and simulcasts, Crunchyroll was the game in town.
The Bloomberg report specifically cites an important turning point to be Jojo's Bizarre AdventureNetflix's licensing of Netflix and, by extension, Netflix's control over Stone Oceanproduction and launch. In another recent report from Parrot Analytics, Netflix has emerged as North America's top anime streamerproving that Crunchyroll's time at the top may have come to an end.
Outside forces threaten Crunchyroll's dominance
Competitors Are Trying to Take Crunchyroll's Throne and It's Working
Since the pandemic, Netflix and other American streaming platforms have scrambled to take advantage of the growing interest in anime by licensing and marketing major IPs. Meanwhile, the report implies that because Crunchyroll was unable to secure an exclusive license to Dandadan, Gerdemann issued an order to stop its promotion entirely. These types of moves, in addition to being petty and short-sighted, also speak to a growing anxiety about Crunchyroll's dominance in the anime market. These sporadic actions, by a company that has much less impact on the general public than companies that produce anime want to attract, naturally led to Crunchyroll's constant loss of market share.
Especially as companies like Toho attempt to expand their operations into North America through purchases from distributors like GKIDS, the situation will likely only become bleaker for Crunchyroll and, by extension, Sony, whose acquisition incredibly Crunchyroll guy threatens not to bear fruit. In response, Sony has tried to bring Crunchyroll to underserved markets like India – but the problem is that the subscription price must be very low to be profitable.
Meanwhile, Netflix is growing thanks to anime. They are just one example of several streaming platforms that have successfully ridden the anime wave, while Crunchyroll is barely treading water, attracting many subscribers to them. Bloomberg's report on Crunchyroll and the state of the anime industry is ominous news for Sony, but anime fans can see history repeating itself - provided they've been around long enough to see countless anime goliaths. industry falling to the ground because of its own mistakes.
Source: Bloomberg