Sony’s Purchase of Anime Hits a Federal Roadblock

Sony plans to acquire Anime streamer Crunchyroll. The US Department of Justice has extended its antivirus review of the sales. Sony’s Funimation Global Group would buy Crunchyroll for $1.175 billion, subject to regulatory approval.

The Department of Justice stated that it is looking into whether Japanese studios would have fewer options for overseas distribution as a result of the merger.The review could take six months or longer. After that, the department will either approve the deal or sue to block it.

Warnermedia and Sony have spoken to the department of justice that there are several other competitors in the global Anime streaming market, including Netflix, Amazon, and Hulu. They have stated their argument that anime is not a self-contained market. It competes with other kinds of adult animation.

Sony and its Anime subsidiary Aniplex have spent the last five years on an anime acquisition. It is snapping up France’s Wakanim, Australia’s Madman Anime, then Funimation itself and it bought a 95% stake in the company for $143 million. In 2019, all three were merged under the Funimation name.

Crunchyroll has more than 3 million subscription VOD subscribers and some 90 million registered users across more than 200 countries and territories. It offers ad-supported VOD, mobile games, manga, events merchandise, and distribution. It also has 1,000 titles and over 30,000 episodes which represents the world Anime library.

The market in the U.S. is fueled by considerable investment from streaming platforms. In recent years, mass-market players especially Netflix have joined the market. According to the recent calculation the industry has grown to a record of  USD$24 billion in 2019.