Mar 25, 2021

Sony's purchase of Crunchyroll has reportedly been delayed in the face of uncertainty

Sony's plan to acquire anime streamer Crunchyroll from AT&T's Warnermedia may have just been dealt a blow. The U.S. Department of Justice (DOJ) has extended its antitrust review of the sale, reports tech site The Information, citing three people familiar with the process.

In December, after months of rumors, it was announced that Sony's Funimation Global Group would buy Crunchyroll for $1.175 billion, subject to regulatory approval. The news prompted a backlash from many anime fans, who argued that this represented too much consolidation: Funimation and Crunchyroll are the two leading anime streamers in the U.S. The DOJ is said to be 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, according to The Information. After that, the DOJ will either approve the deal or sue to block it. The DOJ did not respond to The Information's request for comment.

Warnermedia and Sony have reportedly told the DOJ that there are several other competitors in the global anime streaming market, including Netflix, Amazon, and Hulu. They have also argued that anime is not a self-contained market, but competes with other kinds of adult animation.

This last idea has also been floated by the Association of Japanese Animations (AJA), the Japanese trade body. In its 2019 report, the AJA wrote of Sony Pictures Animation's Spider-Man: Into the Spider-Verse: “Hollywood has finally advanced into the realm overlapping with the adult animation market that had been Japan's monopoly. If this trend shifts into high gear, the existence of Japanese animation may be questioned again.”

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

The anime market in the U.S. is booming, fueled by considerable investment from streaming platforms. In recent years, mass-market players - especially Netflix - have muscled into the market. The AJA recently calculated that the anime industry as a whole grew to a record 2.5112 trillion yen (around USD$24 billion) in 2019.