Niche streamer Crunchyroll is no longer such a niche – and soon it may not be a WarnerMedia property either.
The anime streaming service, which released 3 million paid subscribers and 70 million registered users this summer, is reportedly in the final stages of a sale to Sony, strengthening the company’s streaming business. The consumer electronics giant is already the majority owner of the US anime streaming service Funimation.
If the sale hits, this will be the latest instance of major media companies reducing, redefining, or outsourcing smaller services in order to strengthen and optimize their streaming offerings for consumers. It seems clear that some small ads or subscription services currently in the portfolios of entertainment giants may soon switch hands or close entirely.
The total number of WarnerMedia’s video-on-demand services has already declined as the company focuses on general-purpose HBO Max. In September, the company selected niche Sunset streamer DC Universe, moved original shows like Doom Patrol and Harley Quinn to HBO Max, and signaled plans to develop DC Universe into a comic book loan subscription.
And at ViacomCBS, outgoing chief digital officer Marc DeBevoise told Adweek in September that some of its smaller services “won’t exist in the long run.” The company is still ironing out which services stay and which go, he said at the time.
It is a balancing act, however, as companies determine for themselves how valuable these services can be and whether they can persuade subscribers to transition when they consolidate these targeted services into a broader offering.
“They all analyze and ask, ‘Is it best for us to throw everything into one service, like an HBO Max, or have a main anchor service like a Paramount +, but also have other services nearby?'” Said Steve Nason, director of research at the consulting firm Parks Associates.
For many companies, including WarnerMedia, ViacomCBS, and Disney, all-purpose streamers like HBO Max, CBS All Access (soon to be called Paramount +), or Disney + provide a place to house multiple entertainment brands that have smaller areas within the larger offering . That has already led to some losses. Last year, Disney discontinued the subscription streaming service FX + before making FX programming available on Hulu as part of a branded hub.
However, the calculation can get more complex when these brands already have loyal customer bases who may not be willing to pay for additional programming.
Take the BET + from ViacomCBS, which, according to DeBevoise, shouldn’t be merged into Paramount + or CBS All Access. While it’s the same price as All Access ($ 9.99 per month), it is aimed at black Americans.
The joint venture between BET Networks and Hollywood titan Tyler Perry added 1 million subscribers this summer. Putting BET + together into one big deal would mean saying goodbye to at least some of that revenue for those unwilling to put up with a higher price tag. It would also mean gobbling up the cost of programming and running this service.
The same goes for Crunchyroll. The 70 million registered users who watch anime for free with ads on the service would have to be persuaded to pay $ 15 a month if WarnerMedia were to fully migrate that library to HBO Max. This isn’t exactly a profitable business proposition, especially given Crunchyroll’s international presence in areas where HBO Max is yet to premiere, Nason said.
That doesn’t mean companies aren’t looking for ways to leverage targeted offers to improve their all-purpose services. Bob Bakish, CEO of ViacomCBS, previously described the company’s broader services as “powerful traffic funnels” for more targeted offerings. And of course, a handful of popular BET programs like Everybody Hates Chris and Sister Sister are available to stream on CBS All Access.