March 3, 2022
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Thursday, we’re taking a closer look at Sony’s decision to merge Crunchyroll with Funimation, the deplatforming of RT and the comeback of location-based VR pioneer The Void.
This week brought some welcome news for anime fans looking for a distraction from an otherwise bleak news cycle: Sony is merging the libraries of its two anime services, Crunchyroll and Funimation, under the Crunchyroll brand, giving paying subscribers access to more than 40,000 episodes of anime content. Crunchyroll and Funimation will coexist as separate services for the time being, but Sony is nudging subscribers to switch to Crunchyroll by making new shows exclusive to the service.
Uniting the two services under the Crunchyroll banner is a logical next step for Sony, which spent close to $1.2 billion last summer to buy Crunchyroll from WarnerMedia. But it’s also an admission that niche-centric video subscription services have largely failed, with anime being the sole exception to the rule.
Crunchyroll has long been a niche success story. The service surpassed 5 million subscribers and 120 million registered users last year, with subscription fees ranging from $7.99 to $14.99 per month.
Building niche subscription services turned out to be a lot more complicated, and less popular, than expected. As Netflix was adding millions of subscribers every quarter, and aggressively spending for content from around the world, a bunch of niche streamers were forced to throw in the towel.
There may not be a whole lot of room for niche video subscription services outside of the anime world, as proven by the demise of VRV and continued success of Crunchyroll. But that’s not just a content issue: Crunchyroll began as a fan-focused site, with audience members supplying their own subtitles for their favorite Japanese anime shows.
The company kept that spirit alive over the years by engaging with fans on message boards, making collectibles for their favorite characters and even hosting fan conventions. In the end, Crunchyroll is not just a video library, but, first and foremost, it’s also a thriving community of millions of fans around the globe — something that is virtually impossible to recreate from scratch.
— Janko Roettgers
It’s been a bad week for RT, the English-language TV network funded by the Russian government. Accused by the West of spreading propaganda about the Russian invasion of Ukraine, the network has been banned and restricted by a number of companies in recent days.
This has led to a predictable backlash in Russia, where the regime has started to take retaliatory steps against Meta and Twitter. There’s also a possibility that the bans could backfire against tech companies in the future, with repressive regimes forcing them to remove apps and accounts from media companies they don’t agree with.
But how did RT get so popular in the West in the first place? There are some obvious political answers, which include a broad popularity of conspiratorial content since the rise of Donald Trump. But there’s another explanation that has a lot more to do with the economics of online media.
The flip side, of course, is that although these broadcasters may not be financially dependent on ad dollars, they still need Big Tech’s platforms to reach an audience. And if they’re being deplatformed, that audience can disappear overnight.
— Janko Roettgers
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Google has been busy acquiring audio startups and IP. The company has spent tens of millions of dollars on technology and teams that could be key to helping it take on Apple’s AirPods.
AppLovin has acquired Wurl for $430 million. The acquisition is another proof point for the growing popularity of linear streaming networks.
Netflix is defying Russian regulations. The company is supposed to add Russian TV networks to its service this month, but now has no plans to do so.
Why TikTok wants longer videos. Can the service become YouTube before YouTube becomes TikTok?
Twitter may be adding podcasts to its app. It will be interesting to see whether the company will tie an expansion into podcasts to its Spaces platform.
Electronic Arts strips Russia from its FIFA and NHL series. The publisher said it would remove the Russian national teams and Russian clubs from the latest entries in its soccer and hockey franchises.
Netflix scoops up another mobile developer. The streaming service said it plans to buy Finnish mobile studio Next Games, which it worked with on a “Stranger Things” puzzle game, for $72 million.Epic is making a metaverse music push. The Fortnite creator announced its acquisition of music marketplace Bandcamp yesterday, with both companies saying their values on the creator economy are aligned.
Protocol readers may already know that location-based VR pioneer The Void is plotting a comeback. This week, the company took one more step toward its eventual return: It relaunched its website, which had been offline for around a year. “The Void returns bigger, stronger, and better than before,” the site promises, without offering many additional details. Fans of the company were nonetheless excited, and former Protocol editor Mike Murphy couldn’t stop himself from commenting that it “looks like they’re filling a void.” Mike, seriously. But he’s not wrong!
— Janko Roettgers
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