Answerman

Is Funimation Entering the UK Market?

Marco asks:

Last year Manga Entertainment's sub-license of Funimation titles for release in the UK ended. Today Funimation titles Funimation appear on Amazon UK, offered directly from Funimation themselves. This month Funimation Launched their FunimationNow service in the UK. Does this mean that Funimation is entering the UK anime market? I remember that ADV and Bandai (as Beez) attempted to before, but it didn't work out so well for either of them. Have things changed, or should I be concerned?

Sort of.

All indications are that Funimation is serious about streaming in the UK and, most likely, dozens of other places around the globe. When you think about it, that makes sense: Funimation's biggest licensing competitor is Crunchyroll. A lot of licensors prefer to sell all English-speaking territories to one company, if possible. Crunchyroll can offer a licensor direct reach to the UK and beyond. Funimation was pretty much restricted to North America, and relied on middle-men to reach audiences in the UK and Australia.

But streaming to the UK doesn't really cost Funimation much money or effort. Most of the internet infrastructure used for streaming video are worldwide networks known as CDNs, and so that video can easily be streamed anywhere in the world that they have permission to stream to. Sure, they might need to do some marketing, and there could be an additional regulatory hoop or two to jump through, but in terms of expanding your audience, there's not much reason NOT to do it.

What kept them out of those markets before was the lack of a meaningful advertising market for video in the UK. Funimation originally launched their video platform with a reliance on advertising revenue. However, over the past few years they've shifted to depend more and more on paid subscriptions, and that works just as well in the UK as it does Stateside. It was also assumed that someone in the UK would come up with a workable premium content streaming service to serve that market, but that has not materialized. The anime market there is sizable, but it doesn't appear to be quite big enough to sustain its own streaming service.

So now, Funimation can offer Japanese licensors a platform that has reach into North America and the UK and Ireland, which are two biggest English speaking territories. I wouldn't be surprised to see them stream to Australia next. This is part of a slow trend we are seeing towards a much more global approach to anime distribution.

But what I think you're asking is whether Funimation is going to get into the physical media market in the UK, and frankly, I don't think so. The UK market has a lot of its own unique challenges -- a smaller market overall, a slightly more art house-oriented audience, and perhaps most importantly, fees associated with the British Board of Film Classification (BBFC), which is a mandatory ratings process for all home video product that charges by the minute of content. Those fees can really add up!

All of those things combine to make the UK market quite a hard nut to crack. It can be done, but for now I don't see any signs that Funimation is looking to get in on that market. For now it seems they'd rather sub-license their titles to UK publishers like Anime Limited's All The Anime label (full disclosure: I do contract work for Anime Limited). It's just the digital rights that they prefer to keep to themselves.

But things are changing fast, so definitely keep an eye on the industry.

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Justin Sevakis has worked in the anime business for nearly 20 years. He's the founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap.