Reactionary Posting: The Role of Crunchyroll from a Cash Flow Perspective


From this, I read that, and I’m like, LOL seventhstyle. But let’s just address this. It sure is better than the tl;dr I wrote last week about consumerism and conventions that I’ll post later this week.

First, the attitude seven took is simply unreasonable and it misses out on the big picture. I won’t get into it here, feel free to raise it in his tl;dr comment thread though. I will address the numbers.

TL;DR: CR actually pays quite a bit to the Japanese–probably tens of thousands per hit title.

Let’s say you pay $50 a year, that’s how much I pay for CR; during their annual black Friday sale they offer a $50 deal for a year of CR. It’s probably a lowball estimate because there can’t be that many freebie premium members at any given time to balance out the people paying full price, but who knows? It’s a nice round number.

If 200,000 users paying $50 a year or about $12.50 per cour (since IP runs for cours, let’s just say) then this season with 40 shows, each show gets (assuming even Steven distribution, I’ll get into it later) $62500 before CR’s costs. If we use seventh’s number for overhead (which is probably inflated because of various factors) then we’re talking about $7.50 per cour of overhead, or about $5 per subscriber per cour. That’s $25000. The $2.5 cost might be reasonable if we factor in not so much what seven is saying, but all the subsequent delivery costs (Akamai can’t be that cheap, right?), HR overhead, what have you.

Imagine if you’re the committee for Outbreak Company and you get a $25000 check just for streaming on CR. That’s $25000 more than if nobody used CR. I don’t know what kind of pot seven is smoking but that is money left on the table if people only fansubbed. Sure, this also means the production committee has to hire shoulder enthusiasts like this guy to produce the subs, plus other technical overheads. Let’s say they end up with $20000 left after all that work. Five grands for translation/subbing and other technical work is probably a reasonable estimate for 1 cour TV, but I admit this is just a guess along the lines of what I understand how much the Quarkboy-underling-types get paid. Five grand is also not much for a company to pony up to get an extra 20.

If an average 1-cour TV anime cost $2-3M to put together, it has just recouped almost 1% just from CR. That’s amazing. And you can be a part of that without even paying for anything, as this is just the benefits coming from the paying members. Free tier guys get to contribute using ads, and that ~10 million members is a lot of ads served. The expensive kind, video ads.

That’s also assuming people are watching any particular show equally, which is probably not the case. It’s prudent to assume some kind of long-tail situation where more than half of the shows this cour get only a fraction of 1/40th of that 3-month period, on top of all the other traffic paying member pay to view (and needless to say, non-paying members can watch whatever, although I don’t know how views and traffic breaks down). But there’s probably some popular shows that will get all those eyeballs. I mean, the corollary here is that 1-hr delay is the way to go. If CR pays out beyond the MG via their traffic, it pays to be as fast as possible. This is probably also why Daisuki isn’t doing a paid-delay strategy. Nor Hulu, FWIW. At any rate, CR loses money on some shows, probably, but will make it back on the ones that break the MG, and as per the long tail concept, a few shows break the MG by a whole lot. If the cost overhead for CR is low for all the loser shows, then it will be profitable.

Which gets back to what does matter: the minimum guarantee. You can forget all that math from seventh or from what I put down up there because in all these cases, as long as CR is a thing, they have to pay the committees for some kind of minimum guarantee regardless how well a show does. It’s guaranteed income for the committees. I don’t know what the MG is in these cases, but given the math we have it’s probably in the low 10ks per cour. Compared to the known MG for home video licenses, it makes sense. And it makes sense that the two can be bundled since one is a lot lower. The numbers are kind of in line at any rate.

To me, the biggest opportunity here isn’t so much that the committee can recoup maybe the salary of one grunt-level employee per show per cour, but it’s more of a marketing opportunity to test the water, to see how people receive your work oversea, to get some demographics data. It’s also a way to promote the work so people will buy the home video later on. And instead of buying ads, you get paid to do this kind of advertising? What a win-win. This is the stuff that could cost thousands of dollars for a multinational company to do. Instead, CR does it as part of their business.

But, sure, I get ya. Some people (myself included) don’t like ads on streaming internet tee vee. Some people like watching stuff offline. It’s easy to pull files from #news or wherever you go, I know how it works. But I don’t think it’s easier than flicking on my phone and have HD anime in my face < 30 seconds. Here’s my #firstworldnonproblem for you–I’m happy paying CR for the service they provide, because they actually do a pretty good job. Just ask FUNimation. So to take a middle ground, the diplomatic answer from Mamare Touno probably works just as well: don’t sweat it, but when you get rich buy lots of good stuff! Don’t sweat the little thing. It’s just $2.5 a month after all, at worst.

6 Responses to “Reactionary Posting: The Role of Crunchyroll from a Cash Flow Perspective”

  • Lifesongsoa

    At the end of the day it’s a good service and your money is going to support the industry. The logic that it’s better to just watch fansubs and buy the disks in order to support the industry is flawed logic at best when you can stream anime cheaply and buy disks.

    Even more flawed is the idea that it’s our job as fans to support the industry. We are customers and consumers, not employees. If the anime industry wants to change that relationship it will be their choice to do so and not ours. The value we do or don’t place in fansubs doesn’t change that.

    • omo

      To be honest, it’s not clear who has bigger margins going back to the license holder, DVD publishers or streaming. You would think streaming has way less of an overhead, even if you pay less it’s way less overhead than a physical release, advertising, negotiating with retail, distribution, blah blah blah.

      But it’s not so simple. Netflix is a good counter to this, because now you have 2 middlemen in the streaming equation.

    • omo

      As for the supporting the industry thing, I don’t know. My take is if you want to support the industry, you write a check to the creators. That’s showing support. As you say, if you are reduced to buying shit, you are a consumer through and through.

      But before all that, you have the choice of being an ETHICAL consumer by not buying bootlegs, pirated wares, etc. Because those entities are operating outside the law. It’s like buying stolen goods. It might be legal in some cases, but unless you have a very good excuse it’s just not a good way to do things all the time. Maybe occasionally people are fine with it, but blah.

  • Lifesongsoa

    The way I see it I don’t subscribe to Crunchyroll in order to support the industry, I do it because Crunchyroll provides a good service. It’s Cruchyroll who is then responsible for supporting the industry. I understand all that even if I do sometimes think of it as supporting the industry, but you are completely correct when you say that truly supporting them would be writing them a check. Being a consumer is not support, not directly at any rate and that is an important point to focus on here, that relationship just isn’t the same.

    I honestly don’t give that much thought to being ethical with these things. At least not beyond being critical of the ethics other people are throwing around. That said, if a legitimate option exists and it also provides me with what I want and is feasible for me to obtain, especially if it can do the job better than the fansubbers can, (which CR can do imo) I would be a douchbag not to go with that option.

    Funimation’s streaming on the other hand… It’s a whole other can of worms when the service doesn’t work. I’m currently paying for it at any rate, though that likely won’t last much longer.

  • DarkFireBlade25

    I sometimes wonder if some people actually do just write a check to the creators and just pirate everything. It’s hard to do with hardware based goods though.

    This oligopoly situation still doesn’t do any good about translation quality. Selling convenience is mostly alright with consumers that only care about watchability but a big reason why there is competition among the subbing community is that there is a big demand for accurate subs and that in itself shows a loss of market for those customers who care. The sentiment goes: “why should I pay for amateur subbing when I can catch a much higher quality for free?”

    From my experience, people pay for Hulu and Netflix because they get what they want but don’t pay for Crunchyroll because it isn’t all that great to begin with. Some shows don’t have the karaoke subbed. If you’re only watching Crunchyroll just to support the industry, you might as well write a check for $19.99 to save you the trouble. Idk, I might have a skewed sense of quality control from most people as I complain about obvious production hiccups on Nendoroids and Figmas as well while nobody else cares. I only pay for what I perceive to be high quality products. Crunchyroll isn’t one of them.

    • omo

      It’s a good point of view. Personally I think most fansubs are sub-par quality compared to CR, so I get your point in the reverse.

      Just from a process perspective, CR-type releases will generally produce a much better quality sub simply because they have a better access to the original script, have more time to translate the work, and more rounds of editing. To paraphrase what you are saying in my wording, though, it’s that a lot of fansub viewers prefer their translations a certain way, and they can get it from a particular fansub group.

      FWIW, Netflix is paid only. Most people do not pay for Hulu from what I can tell, unless they also watch a lot of non-anime content.

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