Why Is Funimation Shutting Down and Why Are People Claiming Their Purchased Anime Is Being Stolen? The Crunchyroll Controversy Explained

In the spring of 2022, Sony spent $1.75 billion buying the anime streaming company known as Crunchyroll. At the time, some anime fans were worried what the future might hold for their platform.

The acquisition, one of the largest between two companies in the anime industry, was the start of something that fans weren't sure what the end result would be, but two years later it's finally been revealed.

In order to properly explain this week's Funimation shutdown announcement and the ensuing controversy surrounding it, it's important to know about online anime culture in general, and how we got to this point. Let's explain.

Why Did Funimation Shut Down?

Put in the simplest (and most blunt) terms, Funimation shut down because it could. Being owned by the same parent company, it apparently no longer made sense for Crunchyroll and Funimation to continue to coexist, as it's likely Sony perceived the two as leeching off each other when there are no other worthy competitor services in sight.

Shutting down Funimation means that people who were watching anime on that service will now have to make Crunchyroll accounts to continue where they were in their anime journey, which is potentially (and controversially) why Crunchyroll also announced that starting next year, the price of a yearly subscription has doubled.

Why Are People Losing Anime?

On the Funimation service, fans were able to buy the ability to stream different anime series, such as Fullmetal Alchemist, so that they could watch them whenever they wanted. This is because anime streaming is similar to streaming on other services like Netflix where some series have revolving contracts for rights, so you would have to pay extra to buy unlimited rights to stream a show out of season.

With the service shutting down, however, those rights are also apparently becoming void, meaning that fans who spent money buying the ability to stream an entire multi-season anime, like Inuyasha, are now losing their legal way to watch the show — and as one might assume, many of them are very mad about it.

How Are People Responding To The Shut Down?

Some anime fans are happy to see Funimation die, as it is almost impossible to survive in the anime industry without having some sort of controversy that leads to fan hate (see Funimation's dubbing debacle), but a large part are sad to see online anime streaming get worse across the board.

Due to Crunchyroll now being one of the only legal ways to view anime (aside from minimal offerings on other services such as Hulu, Netflix, etc.), many are comparing it to the consolidation of television when prices started to rise because there was less competition, which gave way to bootlegging, cable splitting and other ways of trying to get around the high fees and enjoy entertainment.

While some fans are advocating for buying physical media, there are many who are loudly advocating for a return to online piracy. This sentiment has also been seen with the massive influx of streaming services in recent years, many of which have also ballooned in price.

Why Has The Shutdown Sparked Discourse About Anime Pirating?

Online piracy is a hotly debated issue in which someone through the use of either a streaming website or torrenting site will gain access to a piece of media property that they did not legally purchase.

Discussions about online piracy have existed for decades, with many saying that it directly harms the studio to not pay to view stuff legally, while others will counter that claim by saying some media does not exist in a way that is easy to find and view legally.

If you wanted to legally watch the anime Blood+, for example, you would find that some countries do not have a legal streaming service that is currently carrying it. This means you would have to find a physical copy of it online to purchase, wait for shipping and then be able to watch it.

Looking online to buy the complete series of Blood+, it is possible to find an entire box set for the price of $249 as of February 8th, 2024, in the non-HD standardized DVD format.

When an anime does not exist online, and the physical media edition is incredibly hard to find or very expensive, that is when online piracy is often looked at as the last option — where the entire series in HD format can be found and downloaded forever onto your computer in under an hour, a point echoed by other content creators who feel there is no other choice in some cases.

Naturally, the recent controversy surrounding Funimation and Crunchyroll has once again renewed the conversation around pirating content, as many feel betrayed and slighted by losing their legally purchased content.

Friendly reminder to you #anime fans out there to cancel your Crunchyroll</a> &amp; <a href="https://twitter.com/Funimation?ref_src=twsrc%5Etfw">Funimation subscriptions. If you can't even keep what you buy digitally, what's the point of even buying anything at all. It's not worth the $10/mo supporting a corporation who won't honor purchases. pic.twitter.com/QATFaqGhtK

— HuskyLeaf (@HuskyLeaf) February 8, 2024

For the full history of Funimation Shutdown, be sure to check out the entry on the event for even more information.