In Q1 2023, PARQOR will be focusing on four trends. This essay focuses on "Media companies have millions of consumer credit cards on file. What happens next?" 

One big, broad brushstroke theme lately has a growing sense of inevitability that the legacy media model is in an accelerating death spiral. There will be no one-to-one replacement for it, not even streaming. This has been the story of the decline of Regional Sports Networks (Diamond Sports declared bankruptcy on Tuesday night) and of the reorganization of AMC Networks. There are also questions about the theatrical model’s future beyond recent blockbuster hits.

Another big, broad brushstroke theme is the growing uncertainty that the future of streaming entertainment is as many had imagined it to be. As Disney CEO Robert Iger recently described it, the uncertainty is “being mindful of a world that is not getting any less complicated” but where streaming is still “a great consumer proposition.” 

Sitting in between both themes is anime streaming subscription and video-on-demand service Crunchyroll. Sony’s post-acquisition strategy has moved the service beyond its streaming DNA into a “flywheel” model: theatrical releases of new anime content, sales of home entertainment products (e.g. DVD box sets), merchandise licensing, and secondary distribution. 

That streaming-centric flywheel is the key difference between Crunchyroll and other streamers, and the key difference with other traditional media distribution businesses. In the past week, we have learned a little more about the business, and those revelations may explain why we may not see legacy media businesses find a similar equilibrium to Crunchyroll’s. 

Key Takeaway

Crunchyroll's success highlights how the politics of owning a lot of IP in the streaming era may be a core strategic *disadvantage*  at a time when fans increasingly want to be served with flywheels.

Total words: 1,500

Total time reading: 6 minutes