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Summary:

Access to four out of five Anime shows that air on TV in Japan, in HD, and on the same day they’re available to Japanese audiences: These kinds of perks have helped Crunchyroll to get to 100,000 paying subscribers. Now it’s looking to expand its focus.

crunchyroll

San Francisco-based video startup Crunchyroll just surpassed 100,000 paying subscribers with its blend of Anime, Korean drama and Asian live action content, and the company is now reaching a total of eight million viewers per month. Validated by this kind of success, Crunchyroll is now looking to expand into other niches, the company’s co-founder and CEO Kun Gao told me a few days ago. “There is a huge demand for hyper-targeting users of other verticals,” he said.

Crunchyroll began as a labor of love five years ago, when its founders were still working for Slide Inc. The site initially adopted a YouTube-like model, asking users to upload clips, many of which were Anime and other unlicensed Asian content. Crunchyroll’s team radically changed course in 2009, deleting all user-submitted content and instead striking licensing agreements with TV networks and studios in Japan. That complete reboot went remarkably well, said Kun, given the fact that sites like Mininova struggled with similar strategies. “It was a very different transition to us,” he recalled.

Part of the reason was that the Anime fan community was underserved. The only way to legitimately get access to many popular shows was to buy DVDs months or even years after episodes first aired in Japan. That’s why most fans got their Anime fix from unlicensed sites, where so-called fansub groups would post videos with English subtitles transcribed and translated by enthusiasts. “Piracy was just rampant,” said Kun.

Crunchyroll viewed this as an opportunity and struck deals with rights holders, and lots of them: Today, the service shows between 80 and 85 percent of all Anime content that airs in Japan, Kun told me, adding: “We legitimized an iTunified the Anime space.” And most of that content is available on the site the same day it airs on TV in Japan – to premium subscribers anyway, who pay between $7 and $12 per month, and in turn also get to enjoy videos in HD. Free users on the other hand have to wait a week for their Naruto Shippuden fix.

Part of getting to 100,000 paying subscribers has also been Crunchyroll’s embrace of new platforms, some of which are limited to paying subscribers as well. Crunchyroll doesn’t just have its own apps for iOS, Android and Windows phone, but also Roku, Boxee, Google TV and the Playstation 3 – a platform that Kun is especially proud about: “We are literally the only startup on the Playstation,” he told me.

So what’s next for Crunchyroll? Kun told me that the company is eyeing other territories after localizing the service for Latin America earlier this year. And then there’s the idea to add other niches to Crunchyroll’s service. Kun didn’t want to reveal any details yet, but said that the hyper-targeted approach with perks like same-day access would work for other things as well. “We think it’s very applicable to other content verticals,” he told me.

Crunchyroll is based in San Francisco and has an office in Tokyo. The company employs around 30 people, and has raised around $8.5 $7 million from Venrock, Bitway and strategic content partner TV Tokyo.

  1. Unfortunately, translation quality is still lacking. Fansub groups continue to offer superior product. They should really hire them.

    1. You mean the fansubbers who are going by what they hear rather than the translators for Crunchyroll working off of the official scripts? Keep in mind quite a few of your favorite fansubbers over the years have transitioned to working for CR and doing these kinds of scripts and translations.

      1. Fansubbers today often also get the scripts. It’s probably safe to say that most of the time you are getting the same sort of people with similar experience working on both, and from my own experience the quality on the translation is about the same between the best fansubs and the CR version. Even on Quarkboy’s subs there are some word choices that makes me facepalm :p

        Truth is there all the good fansubbers stop once CR picks it up. They’re too smart to realize how futile it is to redundantly sub something as a labor of passion. As long as CR doesn’t do something retarded, anyways (eg., week-late “simulcasts”).

      2. @omo – Fansubbers get official scripts?

      3. Depending on the show, closed captions are available to use for translation. So, yes, fansubbers can work from a script instead of by ear.

    2. Except Crunchyroll subbers ARE fansubbers. The people Crunchyroll hires to sub their videos are very often ex-fansubbers, and Crunchyroll, since its inception in this field, has always done exactly what you\’re suggesting.

      The \”translation quality is lacking\” because no one translates perfectly… It\’s certainly true that some fansub groups offer superior product. Some also offer inferior product. On average, though, the difference is impossible to tell.

      Some armchair analysis, but I theorize that there\’s a psychological reason behind the fact that Crunchyroll essentially offers the same product, subbed by very similar people, but fansubs are perceived as better. Studies in marketing psychology show that context can often matter more than the product; diehard Coke fans can be tricked into drinking the off-brand cola they despise as long as it\’s in the familiar red can. Consumers can have vastly different opinions of the same product when priced at different levels. I don\’t doubt for a second that the positive associations with fansubbers– fans who work as a labor of love– carries over to impressions of translation quality even in a situation where the difference doesn\’t exist.

      1. Indeed, the concept of a “perfect translation” seems a bit confused … any translation requires the judgement of the translator on how to best express the sense of something from another language, and in many cases the quality of differences in translation are a judgement call.

        Indeed, once can encounter people expressing their view of the quality of the translation who do not speak Japanese with any fluency ~ and sometimes do not speak Japanese at all. At the time of Crunchyroll gaining the streaming rights to Bleach, in a deal that involved Viz Media doing the subtitling, the forums on the site was inundated with outraged fans of the fansub group Dattebayo, claiming that Dattebayo’s translation was superior to Viz because they had the courage to translate all the swearing in the show. However, Japanese speakers pointed out that the swearing wasn’t actually in the original, but was added by the fansub group to spice up their release

  2. I refuse to subscribe because Crunchyroll discontinued their DTO offering (a little fact of their biography not mentioned in the article). If they continued to sell DRM-free videos, I would continue to buy. But as it is – no deal.

  3. Congrats to Kun & team! Crunchyroll is a great product.

  4. Id like to subscribe but living in Europe I dont get to see the new releases.

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