Funimation "Forever" Content License Revocation

On April 2nd, 2024 Funimation, a paid media-streaming platform was shutdown as part of a merger with another media-streaming platform known as Crunchyroll. This was a planned merger as a result of Sony's acquisition of both companies. The retirement of Funimation also revoked licenses for and removed access to all previously purchased digital copies of Funimation content without an automatic refund or replacement.

Background

Sony finalized its acquisition of Crunchyroll in 2021 after an extended antitrust review by the US Department of Justice. After a year of operations under Sony, On March 1st, 2022, an announcement was made informing users that the site would be consolidated into Crunchyroll as a part of the acquisition of Crunchyroll by Sony.

On February 7th, 2024, it was announced that Funimation would shut down and transition to Crunchyroll on April 2nd, 2024. Users were notified at that time that subscription prices would increase and users would permanently lose access to their digital library without any mention of a refund or replacement. Shortly afterwards, articles were published by major digital news outlets such as Ars Technica and the Verge, with both users and journalists remarking on the largely negative outcomes of this merger.

"Forever" Digital Content License Revocation

On April 2nd, 2024 Funimation was shut down. Users permanently lost access to any digital content they had purchased from Funimation or redeemed through a code provided with a physical blu-ray or DVD product - content that had previously been advertised to users as being available "forever." Users were notified in advance that In order to continue streaming content, users would have to sign up for a new subscription tier with Crunchyroll or let their subscription with Funimation automatically transition into a new, more expensive subscription with Crunchyroll. Notably absent from the notification, was any indication that existing digital content that had been purchased would be inaccessible in Crunchyroll.

Funimation's response

Crunchyroll created a help article with information on the end of Funimation and answers to common questions about what would happen to digital copies and subscriptions. On the topic of revoking access to Funimation digital copies, the site provided the following guidance:

What happened to my Funimation Digital copies?

We understand that you may have concerns about your digital copies from Funimation. These digital copies were exclusive content available in DVD and Blu-ray form directly purchased from Funimation's former platform.

Please note that Crunchyroll does not currently support Funimation Digital copies, which means that access to previously available digital copies will not be available. However, we are continuously working to enhance our content offerings and provide you with an exceptional anime streaming experience. We appreciate your understanding, and encourage you to explore the extensive anime library available on Crunchyroll!

Crunchyroll's president at the time, Rahul Purini replied to the controversy in an interview on February 26th, 2024 with The Verge:

Just to set some context, Nilay, this is, at Funimation, what we used to call digital copies. So for our customers that bought our physical home video collectible sets, we added an add-on to those collectible sets where they could redeem a digital copy within the Funimation platform so that they could have access to a digital version of that same show.

That was a feature that was built into the Funimation platform. And as we look at usage of that and the number of people that were redeeming those and using them, it was just not a feature that was available in Crunchyroll and isn’t in our road map.

And so as we announced the sunset of Funimation, the users that had bought those physical home videos will not be able to have access to the digital copies on the Crunchyroll service. I will say these are customers that we value a lot, and we are working really hard directly with each one of them to ensure that they have an appropriate value for what they got in the digital copy initially.

Some users reported that they were able to get 3 months of Crunchyroll premium for free if they submitted a ticket.

Consumer impact

Users with previous "forever" accessible digital content had all access and rights revoked, and were forced into paying for a Crunchyroll premium subscription if they wanted to continue to access content, with no guarantee that their previously paid-for content would be available on the platform.

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Consumer response

Generally, users were outspoken against this, with many popular news outlets creating articles about the monopolistic and anti-consumer actions that were a result of the merger.