The topic of North American anime streaming services, particularly Crunchyroll, arose in a new Toyo Keizai interview with KADOKAWA Chief Anime Officer Daijo Kudo, who discussed the state of the company’s overseas anime business and growth strategies.
Kudo shared that the perceived ‘boom’ in revenues from U.S. streamers buying anime from Japan isn’t all what it seems anymore. While overseas anime sales revenue on the whole has been growing for years, the changes in the U.S. streamer landscape have led to an increased sense of uncertainty among some selling titles overseas; the merger of Funimation into Crunchyroll and the “weakening” power of HIDIVE’s Sentai Filmworks as a distribution service were highlighted as reasons:
“To be honest, I think things are a little different now [in regards to increased inquiries for overseas distribution and higher license fees]. Between Funimation, Crunchyroll, and Sentai, the impression was that the distribution rights fees were growing. However, with Sentai’s power as a video distribution service weakening, the composition of the buyers is becoming more like Crunchyroll and then everyone else. As a result, my impression is that more time is being spent on careful negotiations over purchase prices.“
The change in the power dynamic of American streamers has led to more difficulty with selling distribution rights and receiving revenue:
“Within the industry, there are works starting to appear where, when Crunchyroll doesn’t buy the distribution rights, the overseas distribution revenue can’t be predicted. As for the works we handle in-house, we aim to avoid ending up in that situation by making decisions only after carefully drawing up an exit strategy from the start of the planning stage.“
This suggests that there may be niches within anime for other platforms to license titles and build a following if the fandom is there. Netflix, which together dominates the overseas streaming revenue market share with Crunchyroll, typically licenses only a few titles each season.
Notably, a genre that KADOKAWA believes is difficult to sell to American streamers like Crunchyroll is boys’ love anime. Kudo was asked about what companies on the anime planning side need to be conscious of when adapting to Crunchyroll’s procurement strategy:
“While aligning [with their content acquisition strategies] to some extent, it’s important to consider an exit strategy for each IP.
For example, when discussing an anime adaptation of a Boys’ Love work, it’s not that there aren’t any fans, but securing revenue from North America through platforms like Crunchyroll would not be easy. So the strategy would be to focus on markets in Asia and Japan, as well as on merchandise sales.“
Kudo says that KADOKAWA maintains a good relationship with Crunchyroll and Aniplex (both members of the Sony Group), with a possibility of deeper collaboration in the future. Sony recently acquired more shares in KADOKAWA, agreeing on a strategic capital and business alliance that will see the pair collaborate on expanding IP globally. You can check out the interview with Toyo Keizai here, where Kudo discusses North America’s rapid rise as an anime market, considerations around setting up a local subsidiary, and more.
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