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.