It’s time for another episode in The Great Streaming Wars. Let’s see how the anime market may soon change as a whole — and for many viewers, affect your wallet right now!
Netflix
First up, Netflix. As the company continues to pursue creating movies and shows instead of just hosting others’ works, they recently made an announcement relevant to anime fans: they’ve teamed up with three Japanese animation studios and one South Korean one for new content:
ANIMA&COMPANY (NAZ) – My Sister, My Writer, Infinite Dendrogram
MAPPA – Yuri!! On Ice, Dororo
Science SARU – Ping Pong The Animation, Lu over the Wall
Studio Mir – The Legend of Korra, Voltron: Legendary Defender
Netflix has already made similar partnership agreements with studios like Production I.G, BONES, and David Production. These have led to the production of anime like Carole & Tuesday and Dragon’s Dogma. With these four new studios inking deals with Netflix, this brings the streaming giant’s number of partnership houses up to nine. Studio Mir becomes the first non-Japanese studio under this umbrella.
Netflix sees anime as a major pillar in their lineup, with shows like Rilakkuma’s Theme Park Adventure and The Way of the Househusband being announced at their Netflix Anime Festival 2020.
But deals like this cost money. And last week, the company announced its two most popular tiers would be seeing a price increase.
The Basic plan remains at $8.99, but the Standard and Premium tiers now cost $1 and $2 more respectively. Subscribers will get a notice 30 days ahead of their next billing cycle informing them of the increase.The last rate change in January 2019. Netflix Canada had the same rate increase earlier in October, so this news isn’t much of a surprise.
Sony and Crunchyroll
Meanwhile, Funimation owner Sony may be making its own deal. But not with an anime studio — with AT&T. Yes, once again, the murmurings that Sony wants to buy Crunchyroll are going around, with Nikkei Asia reporting Sony and AT&T are close to a deal, and one that is likely near AT&T’s $1 billion asking price. While talks may continue for a while, Sony doesn’t have to worry about someone swooping in and stealing Crunchyroll from underneath their noses. The same Nikkei Asia article adds, “Sony recently obtained the exclusive right to negotiate for Crunchyroll.”
VIZ Media videos
Also in recent news, VIZ Media has removed videos from its website. Now, instead of hosting Hulu videos on Viz.com/watch, the site posts links to its various streaming partners like Hulu, Crunchyroll, Funimation, and more.
Sentai Filmworks and Cool Japan
As for Sentai Holdings, the company behind Sentai Filmworks, HIDIVE, and Anime Network, it’s been revealed they’re tapping into the Cool Japan Fund again to the tune of $3.6 million. Sentai’s CEO is also giving more capital to Sentai. According to the press release, Sentai’s financial state was better in 2019 than in 2020. However, it adds that they need to make changes for its “medium-to long-term growth measures” to “remain competitive despite macro economic challenges”.
While COVID-19 may be the at the top of the list for current challenges, Sentai faces a daunting future. I’ve discussed the potential ramifications for the anime market in a post-Crunchyroll/Funimation merger before. Now that Sony is currently the only one able to buy Crunchyroll, a deal seems inevitable. With Netflix buffing up its anime lineup by getting first streaming rights with studios, anime fans could be looking at a Funiroll (Crunchymation?) vs Netflix division for most new titles. That doesn’t leave much room for Sentai. Their cheaper subscription prices may be netting them a few extra subscribers, but that also means less money to go after productions not already backed by its competitors. The company can’t rely on the Cool Japan Fund or its CEO to carry them along forever.
Overall Streaming Summary
In the meantime, yes, no one is ever happy with a price increase, and it’s going to be up to subscribers to decide if another $12/year or $24/year is worth it. That may not seem like much overall, but there are only so many hours in a day. A lot of people, especially with the pandemic going on, may have cleared a lot of their must-watch backlog, so they’re paying more to wait until the next new batch of content drops. Sure, they’ll watch stuff in the meantime, but it’s not like there aren’t other options — paid and unpaid — competing for their views. Anime fans in particular are often critical of Netflix’s half/whole season dump for shows, and they may want to steer their time and money to someplace that gives them a new fix every week, not every few weeks.
That’s something Funimation and Crunchyroll does, but of course the question will be where does the pricing go from here. With HBO Max around $15, most Netflix subscribers paying around that, and even Disney+ pushing their bundle with Hulu and ESPN+, it seems like streaming costing double digits is going to be the new standard. VRV, which combines Crunchyroll, HIDIVE, and other offerings, does practically reach that mark at $9.99 a month.
Then, assuming a Funimation-Crunchyroll combo costs the same as VRV, it’s likely going to mean a significant price increase for many people who have chosen only one of the two and have gotten used to a roughly $7 price point. I’m sure a lot of those subscribers also have Netflix Standard or Premium, and with $1-2 more there, they could be facing an additional $5 a month for streaming. Sure, $5 a month is cheaper than most rentals (at least for something longer than 30 minutes), but there’s a reason why price increases are gradual and spread-out instead of sudden and large.
Take a look at this chart.
In October 2015, Netflix Standard was (rounding to the nearest whole dollar) $10. That same plan is $14 now. Even adjusting for inflation, the plan would be equivalent to about $11 in 2020. Sure, more stuff has been added and even created because of Netflix since then. But content also leaves each month. One of the most significant differences since 2015, for instance, is that most Disney content has been trickling away or skipped Netflix completely. And again, no matter the huge list Netflix (or any streaming service) puts up, no person — or even a whole family — is going to be interested in everything that comes out.
Still, many people get more than enough enjoyment out of Netflix and feel the increase is reasonable. At the same time, companies need to make sure that prices for exclusivity or financial backing don’t vastly outpace inflation or their own predictions on what the market can handle. Netflix, for instance, missed analysts’ predicted new subscription numbers by over 1 million. Even though stocks fell after this news and losing $14 billion worth of value, stocks are still worth about $150 more a share than they were at the beginning of the year ($330 vs $475). That’s still a 44% increase, so the price increase may seem a bit tone deaf considering millions are struggling during the pandemic.
I can’t blame animation studios for inking deals that guarantees some money and that their work will have some locked-in streaming options. Trying to capture as much of a market share as possible, as in the case of a Sony-owned Crunchyroll, is a business practice that has existed since time immemorial. Perhaps moreso with all these media conglomerates trying to carve out their space in the streaming market. So all of these things are just the continuation of the way things have been going, like it or not. I know there’s always going to be a vocal but delusional segment that wants all anime (rather, all creative content) free upon release with no ads and available to everyone, any time, anywhere.
That’s not going to happen. Fans are going to have to choose what the tipping point is in regards to how much a subscription to Funiroll/Crunchymation or Netflix is worth. As the saying goes: good, fast, cheap — you can only pick two!