With Anime Market Projected to Triple, Netflix and Crunchyroll Poised to Dominate It Together

As the demand for Japanese anime (and the manga that inspires it) continues to expand worldwide, the international market — that is, the market outside Japan — is increasingly dominated by two key players: Netflix and Crunchyroll.

A recent report from Wall Street research firm Bernstein estimated the two subscription streamers together control more than 80% of the “overseas” anime streaming market, which totaled $3.7 billion as of 2023, according to Bernstein’s analysis.

This will probably come as no surprise to hardcore fans, who have fueled Crunchyroll’s growth from a niche platform to the preeminent streamer of anime series for the U.S. market. The platform’s business model involves having new anime titles available stateside as quickly as possible after they air in Japan, making it an essential subscription for dedicated viewers.

Crunchyroll’s subscriber base, in fact, recently tripled in just three years, growing from 5 million in August 2021 to more than 15 million as of August 2024. (The service does not regularly report subscriber totals but does frequently announce when it passes certain milestones — the approach Netflix will take going forward, incidentally.)

Meanwhile, Netflix has been steadily expanding anime’s presence on its platform, hitting a new high of about 240 titles for its U.S. catalog in 2024, according to Parrot Analytics data. That’s a pittance compared with the more than 1,800 hosted on Crunchyroll, per streaming tracker JustWatch, but Netflix, of course, benefits from its famously deep pockets and wide reach, as well as company leadership’s determination to serve every possible audience.

Indeed, anime is especially crucial to Netflix’s strategy in Japan, where it’s rare that a week goes by without multiple anime titles among the top 10 most-streamed TV seasons. Netflix is still attempting to grow its audience in the country, where fewer than 20% of broadband homes subscribe, per Bernstein’s analysis; Japanese subs only passed 10 million in the first half of 2024, according to Reuters.

As VIP+ has previously written, local Japanese content is hugely popular in the country and therefore key to fueling subscriber growth — and anime, of course, is among the most popular Japanese content there is.

But it’s anime’s growth outside of Japan presenting the bigger opportunity. That $3.7 billion of revenue from international streaming in 2023 is expected to more than triple over the next five years, to reach $12.5 billion in 2030. It would represent the vast majority of the total anime streaming market, which Bernstein projects to reach $16 billion by 2030.

Netflix should be expected to continue expanding its anime catalog as the format’s popularity grows further, but it’s highly unlikely to edge Crunchyroll out of the space. Not only has the service positioned itself strongly as the anime streaming destination (thanks in part to parent Sony merging it with rival anime streamer Funimation, which shut down last year), but it’s a rare success story in the turbulent SVOD business, already profitable and growing.

Crunchyroll, in fact, is now expected to generate 40% of Sony Pictures’ operating profit within the next two years and had an estimated profit margin of 8% in Q3 2024, which is projected to more than double by 2027.

Nor is its relationship with Netflix strictly adversarial. “We believe Crunchyroll and Netflix can coexist and both grow with the streaming anime market,” Bernstein analysts wrote, noting the two “enjoy different advantages in the market.” In fact, Crunchyroll, like other much larger players in the streaming game, has even licensed content to the Big Red N, and its own leadership seems confident of its place in the streaming landscape.

“We believe it is actually good for anime and anime community that services [like Netflix] offer some anime and are introducing anime to fans,” Crunchyroll president Rahul Purini told this writer on Variety’s “Strictly Business” podcast last year. “We know our fans are there, and if we can get them to experience a show or experience anime, then some of them will come to Crunchyroll.”

It’s that sheer dedication to one particular (and highly popular) type of content that will likely help the service endure, even should Netflix begin to pursue anime more aggressively. Unlike what you might see in certain anime series, this is no duel to the death.