Sony's headquarters in Tokyo, Japan. Picture: REUTERS/THOMAS PETER
Sony's headquarters in Tokyo, Japan. Picture: REUTERS/THOMAS PETER

Tokyo/New York  — Sony will buy AT&T's animation business Crunchyroll for $1.175 billion, the two companies said on Thursday, as the Japanese electronics conglomerate aims to beef up its entertainment content and distribution businesses.

The deal will give Sony access to Crunchyroll's 3-million paying subscribers across more than 200 countries and regions, helping Sony compete more globally with entertainment giants such as Netflix.

Sony's Funimation Global Group, a US animation distributor with 1-million paying subscribers, will own Crunchyroll, now part of AT&T's WarnerMedia segment.

AT&T has been looking to monetise its noncore assets since CEO John Stankey took over in June. The latest deal will allow it to invest in other focuses of WarnerMedia, including content creation and gaming.

Despite Crunchyroll's loyal after among anime fans, AT&T felt the anime streaming service was too niche for the broader audience its streaming service HBO Max wants to pursue, a source familiar with the company said.

The proceeds will be paid in cash at closing, AT&T and Sony said.

Sony is boosting gaming and entertainment businesses under CEO Kenichiro Yoshida's strategy to increase recurring revenue streams that cushion the impact of volatile hardware sales cycles.

Sony bought Funimation in 2017 for about $143m.

The animation business has been thriving recently in part on the record-breaking success of the Japanese animated film Demon Slayer — co-distributed by Sony's music unit Aniplex. It will be distributed by Funimation, now jointly held by Sony Pictures Entertainment   and Aniplex.



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