Wall Street is betting big on anime, with one major firm predicting that the anime streaming market is set to grow to $16 billion by 2030, with Crunchyroll and Netflix currently leading the way.
Via Variety, Wall Street research firm Bernstein released new estimates of the overseas anime streaming market, revealing that Netflix and Crunchyroll dominated 2023’s market share with 42% and 40%, respectively. The rest of the streamers combined totaled a far more modest 18%, with the overseas anime streaming market worth $3.7 billion in total.
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Despite the competition between the two streamers, with Netflix acquiring exclusive streaming rights to major titles like Black Clover: Sword of the Wizard King, The Seven Deadly Sins: Four Knights of the Apocalypse and the upcoming One Piece remake — all of whose previous releases streamed exclusively on Crunchyroll — Bernstein says the pair can co-exist and grow in the anime market due to their different advantages. Crunchyroll regularly sublicenses to Netflix, and the industry is increasingly moving away from non-exclusive anime licenses, with major recent titles like Dandadan and Dragon Ball DAIMA streaming on both platforms. The upcoming Witch Watch will be simulcast on Netflix, Crunchyroll and Hulu, while Fire Force Season 3 will stream on Hulu and Crunchyroll in the U.S. and on Netflix in select territories.
As for Netflix and Crunchyroll’s “different advantages in the market,” the former has a much larger customer base, giving it the advantage in household watch time. As suggested in Parrot Analytics’ recent report, Netflix’s anime streaming revenue globally (calculated as the estimated share of anime watch time on the platform as a percentage of estimated revenues) was double that of Crunchyroll. Polygon’s 2023 survey also revealed that Netflix was by far the most frequent destination for where Gen Z and Millennials watch their anime.
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Nevertheless, Crunchyroll is far more active in anime merchandise licensing and production, making an estimated $1 billion+ in sales in 2023 — 36th globally. Speaking to Fast Company earlier this month, in addition to its 15 million paid subscribers, Crunchyroll COO Gita Rebbapragada says it has “a 160 million community that we manage across all our different lines of business.” Crunchyroll is also regularly involved in anime production committees, giving it massive earning potential from copyright licensing. Planned and produced alongside Aniplex, its Solo Leveling series is one of the biggest recent anime success stories, breaking multiple Crunchyroll streaming records, and with its first season even spending 16 weeks in Netflix’s top 10 in Japan last year.
While both streamers’ size and bullishness on anime mean the industry is expected to become even bigger, both have been criticized by anime creators for their business practices. In 2020, animation director Terumi Nishii said Netflix’s massive anime budgets don’t actually go to actual staff on the ground, but instead to production companies. In a 2024 solicitation by the Japanese government, Netflix said it ensures that its licensing fees do trickle down the supply chain. Nevertheless, in the same solicitation, the Association of Japanese Animations all but namedropped Netflix, describing it as being “reluctant” to pay up, distributing installments over long timeframes and providing only flat fees, so no additional royalties irrespective of an anime’s success. The AJA added, “Sufficient marketing data, such as viewer demographics, is not disclosed. Due to the flat fee structure, rights holders cannot conduct royalty audits.”
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Major Anime Streamers Are Pushing for Bigger Exclusive Distribution Windows
Meanwhile, a recent report by Bloomberg cites alleged unhappiness from production companies over Crunchyroll’s sales data, finding that its data isn’t considered trustworthy for revenue-sharing purposes. Voice actors have also alleged poor treatment by the company, from its anti-union stance to David Wald’s allegations earlier this year. Despite anime appearing to be shifting towards non-exclusives, a worrying trend was reported by Jitsugyo no Nihon Sha last year. It shared that streamers have pushed for increased exclusive distribution windows, citing the example of moving from a five-year window to 10 years. This means production companies can’t make money from distributing on other channels. Furthermore, while streaming services would only ask for exclusive streaming rights, Jitsugyo reports that they’re now asking production companies to transfer over all rights to an IP, estimating that “the lost profits from copyrights being monopolized by platforms will likely be huge.”
Source: Variety
