After a lot of rumors and back-and-forths, Sony announced they were acquiring Crunchyroll from AT&T in December 2020. However, the deal was put on hold due to needing regulatory approval, which they eventually got. No doubt a major angle for the US Government was what would happen to HIDIVE, the anime streaming service which was started in 2017.
HIDIVE is one of several divisions under Sentai Holdings. Others include Sentai Filmworks and Section23 Films.
Sentai traces its history to A.D. Vision. ADV Films was a popular anime licensor in the late 1990s and early 2000s. During its heyday, the company had other divisions including manga, magazines, and the first all-anime channel in the US.
But by the mid-2000s, things were starting to slow down. According to the Japan External Trade Corporation, anime releases and goods peaked in 2003 and dropped by 2007.
In 2006, ADV received an influx of cash from the Japanese company Sojitz in exchange for a stake in the company. ADV would help acquire content to export to Japan, while Sojitz spearheaded the formation of ARM. ARM would acquire anime titles for ADV to produce and release and get paid back by ADV’s profits.
But within a year, the deal was falling apart. ADV continued to have financial issues, and tensions were high between ADV and ARM. That power struggle continued even after ARM and ADV dissolved their partnership due to Sojitz retaining their 20% stake in ADV.
In 2008, ARM took most of those licenses ADV was working or planning on to Funimation. These dealings would later become the center of a couple of lawsuits.
Later on in 2008, ADV announced it had a new licensing partner: Sentai Filmworks.
Sentai Filmworks was formed that same year — and is still led — by John Ledford, who was also the founder of A.D. Vision. In September 2009, A.D. Vision shut down and other companies purchased assets — companies like the newly-formed Section23 who are based in the same area and include several key ADV figures.
As Christopher Macdonald of Anime News Network said:
“…it’s pretty obvious that [the liquidation is] not much more than a corporate restructuring that moves intellectual assets away from a dysfunctional corporate entity that has credit problems and hostile shareholders.”
The ADV Films name continues to exist, with Ledford still as president and CEO, and it’s still seen at times like the September 2020 release of Lady Death: The Motion Picture on Blu-ray.
However you want to describe the relationship between Sentai and ADV — rebranding, shell game, spiritual successor — the two are deeply connected. And like ADV, Sentai in recent years has been facing financial challenges. Sentai has remained a private company while competitors Crunchyroll and Funimation have been purchased by larger entities. Sentai and its affiliates have signed partnerships with other companies (including Crunchyroll and Amazon), but most of those bigger deals came to an end for one reason or another.
As such, the Japanese government along with private investors via the Cool Japan Fund have invested in Sentai twice for a total of about $34 million in exchange for shares.
According to the original press release:
“Sentai’s independent status makes it a rarity in North America as a licensor of Japanese anime, which is beloved not just in North America but throughout the world.
[…]
The Cool Japan Fund considers Sentai, which has carefully and considerately fostered a fan base for Japanese anime while forging a path in the North American market, to be of major importance. The investment will contribute to Japanese anime and related merchandise having an increased presence in the North American market, supporting medium- to long-term growth in the Japanese animation industry as a whole.”
John Ledford also put in more money into Sentai.
Despite Sentai needing this financial support, for better or worse, the US government did not see a reason to block Sony from acquiring Funimation, which reunited two anime streaming giants. And in these times, Sentai and its fellow anime-centered services are not the only ones who are competing for licenses for Japanese media; services like Netflix and Disney are expanding their offerings as well. Combined with COVID-19 challenges, Sentai has needed a jolt to remain a major player in the field.
Well, the jolt has come: AMC Networks is buying Sentai Holdings.
AMC Networks
First of all, just to be clear: AMC Networks has nothing to do with the similarly-named AMC Entertainment, the company behind the movie theater chain. AMC Networks takes its name from its primary channel, AMC, home to Breaking Bad and The Walking Dead. TV Channels IFC, SundanceTV, and WeTV are also owned by AMC; AMC also partially owns BBC America.
Like most modern TV/movie production and distribution companies, AMC has some streaming platforms, the namesake being AMC+.
AMC+ costs $8.99 a month ($83.88 a year) and includes content from its channels as well all of its offerings from three of its other streaming services. As a reference, Shudder costs $5.99 a month or $56.99 a year by itself, Sundance Now is $6.99 a month or $59.99 a year, and IFC Films Unlimited is $5.99 a month. So AMC+ is only a marginal cost increase over buying one of those three alone.
Other platforms owned by AMC include Acorn TV and ALLBLK.
AMC had 6 million subscribers across all its platforms in February 2021 and was expected to hit 9 million by the end of the year. By 2025, the goal is to have over 20 million subscribers.
Josef Adalian of Vulture compares AMC+ to the Disney bundle, and the president of AMC Networks, Dan McDermott, elaborates:
The head of the streaming services division, Miquel Penella, adds that more shows are starting on one service and being added to another, but both AMC executives emphasized in the Vulture interview that the goal is to not bring all of their brands under one (or, from the sounds of it, even two or three) streaming banners.
The Future of AMC and Sentai
That’s important to note since AMC is acquiring all of Sentai, including HIDIVE.
The terms of the deal were not disclosed, but AMC did take over all of Sentai by buying out Cool Japan Fund’s shares. The deal was completed as of January 5th, and current Sentai leadership, including Ledford, are staying on.
Staying independent has its benefits for businesses, but it also has its drawbacks. And in this current environment, Sentai couldn’t stay the course. It doesn’t have the pocketbooks of FuniRoll or Netflix, but yet it has a wider net (and bills) than, say, RetroCrush. Sentai going somewhere was the most likely outcome.
So how will AMC handle Sentai? Considering AMC is happy offering stand-alone subscriptions, it’s unlikely much will change with HIDIVE. A few anime series may cross over to AMC+ or other services, but beyond that, HIDIVE will likely remain independent. Also, plenty of AMC series do get Blu-ray releases, so I doubt home video versions of new licenses will come to a screeching halt. So right now, fans will likely see little change. For fans who love Sentai, this is probably as good of a buyout as they could hope.
However, will things change for AMC Networks? In July 2020, reports emerged that the company hired a firm for a potential sale.
In August 2021, The Hollywood Reporter mused about what management changes meant for AMC.
A Fox Business reporter posted a scoop in September 2021 saying the company was likely going to start fishing for offers.
However, the interim CEO denies AMC needs to merge with a larger company, but he implied they could hunt for smaller services.
Which, of course, turned out to be true. But still, it is possible AMC is just looking for ways to improve its standing for its own acquisition, and who knows how a new owner would handle Sentai.
Any potential AMC sale has a strong chance of needing regulatory approval, so even if AMC announced it had a buyer tomorrow, things would likely be put on hold for months.
However, HIDIVE’s discounted annual plan around New Year’s suddenly makes a lot of sense. True, the acquisition closed just days later, and those added subscriber numbers likely didn’t seal the deal for Sentai.
But those new subscribers surely don’t hurt when shopping around for new content or its own buyer, and AMC also gets access to names who otherwise wouldn’t have been on the subscriber lists for marketing purposes. AMC is no stranger to doing similar offers; for Black Friday, AMC+ was $1.99 a month for 12 months, and Prime members could get the service for $.99 a month for 2 months until the new year. Shudder was also part of the launch lineup for VRV, and there was a time both Shudder and HIDIVE were together under VRV for about $10 a month.
Either way, Sentai is entering a new phase, and it was probably unavoidable. With this news, there are a lot of possibilities — both good and bad — for the brand. AMC could be very hands-off or they could exert a lot of pressure to improve Sentai’s standing. AMC may remain its own brand or could be taken over by another company. There are reasons for fans to be concerned, but for now, the best thing they can do is support Sentai by subscribing to HIDIVE and/or buying releases and show AMC and anyone else that the company just needs funds to go after more simulcast titles rather than dramatically changing Sentai’s services and products.