Sony Pictures, a major distributor of Anime in Asia, faced stiff competition from leading players in the United States, notably Funimation and Crunchyroll. To address this challenge, Sony Pictures took the strategic step of acquiring Funimation, a Texas-based company with an extensive portfolio of license agreements covering the Americas. This acquisition presented Sony Pictures with the need to evaluate the existing technology stack at Funimation and devise an integration plan that would not only streamline operations but also facilitate agile feature development while minimizing costs.

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Problem Statement

Funimation possessed a complementary set of features and business models compared to Sony Pictures' Crackle platform. While Funimation excelled in selling physical goods and downloadable content, its streaming solution was outdated and required a transition to cloud-based infrastructure. Moreover, Funimation did not incorporate advertising, a core component of Sony Pictures' Crackle business model. The challenge at hand was to seamlessly integrate these two systems without disrupting ongoing operations and the growth strategies of existing businesses. How could this merger be executed smoothly, ensuring a harmonious transition while leveraging the strengths of both platforms?

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Solution

Following the formal announcement of the merger, I was tasked with leading the technical vetting and integration of Funimation into Sony Pictures' common video platform. Over the course of several weeks, my team and I conducted an extensive investigation into various aspects of Funimation's business and ecosystem. We meticulously examined each component of the value chain, spanning from production to delivery.

Based on our findings, I developed a comprehensive integration and cost plan aimed at seamlessly merging the two environments. Our strategy focused on creating interfaces from the Funimation front-end to backend services that could be integrated into Sony Pictures' platform. This approach allowed us to execute a step-wise migration process, minimizing downtime and effort. Additionally, it empowered the business to prioritize the integration of high-value functions first, ensuring a smooth transition.

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Funimation operated a direct sales business that involved the sale of show-related physical goods, including toys, clothing, comics, and disks. In addition, they primarily operated as a subscription service rather than relying on advertising support. While these capabilities were interesting, they weren't inherently integrated with other aspects of Sony Pictures' operations. However, my service-driven architecture approach provided a seamless way to incorporate certain existing Funimation capabilities into the overall platform, enhancing its offerings. At the same time, it allowed the remaining aspects of Funimation's business to continue operating independently.

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Challenges

Dealing with resistance to change is a common challenge when integrating newly acquired teams, and the Funimation team was no exception. Understandably, they had concerns about the transition. To overcome this resistance, I approached the integration as a merging of the best-in-class technology from both sides. I emphasized that this collaboration would enhance the overall capabilities of Sony Pictures and create a stronger, more versatile platform. This approach helped ease the apprehensions and build a sense of shared purpose among the teams.