State of the ANIME Industry: A Startling Prediction

The anime streaming industry will collapse within five years. It will collapse due to the intense greed of corporations, and an over-saturation of product, and if this sounds crazy, there is historical precedent.

I used to regard myself as a prognosticator, but after said opportunity veered toward a dead end, I’ve stayed away. However, I’ve had a bad feeling since November of last year and I’ve been afraid to say something. Since I now have a platform, I feel there are two problems which should be explained. I fear the industry is becoming a giant pissing contest between AT&T and Sony, and their anime arms: Crunchyroll and Funimation. This anime streaming bubble will pop, and we’ll be flooded with product no one wants to watch, and the anime industry in the US will be destroyed.

Artist dramatization of the battles between corporations

To avoid choking down my bile, I’ll explain. In November of 2017, Sony completed buying of a majority share of Funimation. When I read the headline on Anime News Network, a thought ran through my head “Oh, no!” I showed the news to a bunch of people in line for an autograph and they weren’t happy about it either.

Funimation already had Funimation Plus, their (at the time) stillborn streaming service. The service had, for the most part, the same shows that were on our second player in this nonsense: Crunchyroll.

All together now, we’re in the money…

Ah yes, Crunchyroll, where would Otaku be without it? Probably trading DVDs at cons. Anyway, this is something that was relatively unnoticed, or not really cared about, but Crunchyroll was a part of Time Warner. When AT&T began eyeing the corporation for as much as it was worth, they decided to buy the company for billions of dollars which included Crunchyroll. They immediately started off on the wrong foot (at least from my perspective), by shutting down FilmStruck, the critically acclaimed film streaming app, which was to art films, what Netflix is to regular movies.

For the longest time, Funimation and Crunchyroll had an agreement in place in which, Crunchyroll would stream Funimation product, (Similar to Netflix, we’ll get back to Netflix.) It was simple enough, and encouraged this harmonious cooperation.

What the industry thinks of its customers

So it shouldn’t come as a surprise when Funimation announced they were pulling hundreds of titles from Crunchyroll I smelled a story here. This is what it comes down to, and it’s not so much the battle of who has the most popular titles. Instead it is a battle between boardroom politics, and unabashed egos. In short whoever wins we all lose, but mostly it’s about the money.

You don’t believe it’s about the money? Well let’s do the math. A premium Crunchyroll membership is about $7 per month, or $60 per year for a special. Funimation’s is $6, so $72, and Netflix at $8, at $96 per year. So, for all three competitors in this horse race you need yearly $200+, per year for every show. We’ll ignore the fact people watch media differently, or the fact of issues like a job, or school cut down the amount of free time (not to mention other sources of media) someone has. This means there is too much product out there, and most of it, is either decent to forgettable. I’m not going to get into what Aniplex is doing, because if I were, I would be writing for another five pages. Can you say, “Overcrowding of the marketplace?” I knew you could.

The only way you can get people to buy all three streaming services.

This may seem like a callous thing to say, but honestly, I do not care. I am going to make a prediction. As someone who has known about corporate culture all his life, I had an inkling where this is going to go. Crunchyroll (with AT&T support) will push out further Funimation product and promote Sentai Filmworks and their own product, which is selling relatively well. However, with Netflix arriving with Nanatsu no Taizai, Devilman: Crybaby, and other series on their service, the Anime streaming wars are now officially on. I honestly can’t wait for everything to fall apart, because it will, it always will.

Why do I say this? Simple. Because, every big bubble of some kind eventually pops, and everything falls apart. In nerd culture fields, three big crashes stand out like sore thumbs. The great Video Game Crash of 1983, the Comic book crash of the mid 90s, and most infamously of all, the dot-com bubble. These may seem like ancient history, but they all follow some of the same earmarks, corporations refuse to yield: over-saturation of a limited market, too much product to choose from, a lot of product being relative low quality, and quick start-up companies following the money. Pumping a metric ton of money into niche fields, only results in a niche industry, seemingly unable to repair itself. The industries do eventually recover, but the damage is done, customer loyalty is lost, and unless you think fast, you won’t survive. It happened with Atari, Marvel, and almost happened with Amazon. It even happened with Anime, when the recession hit, and took out Borders, their bankruptcy collapsed the in-store anime and manga market and said-market still hasn’t recovered.

Does any of this sound familiar? At all?

Where am I going with all this? Well, there are two major takeaways to be heeded from this op-ed. One, Corporations love nothing more than getting between you and your money. Congrats Otaku, you now must pay for two or three streaming services, if you want to all the latest anime! Two, this bubble of anime product will flood the market, and a crash will happen. I would like to say within the next 5 years.

History is cruel, fickle, and remorseless. It doesn’t play favorites, and the nature of economics state the truth most executives are blind to. To all the media executives out there, at AT&T/Crunchyroll and Sony/Funimation, heed these words: History is history, stop ignoring it, or you’ll kill this industry. Just like it did to every other nerd-based industry.

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Matthew Simon
If he isn't watching a forgotten library title, Matthew Simon is watching anime/films or attending anime conventions.

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