Crunchyroll Averaging 70,000 Paid Subscribers (Upd 3/2013: 200,000)

[agila61]

Originally Posted by something

... there's also what's going back to the production committees in Japan. But there too, I assume they wouldn't do it if it weren't seen at the very least as a low-risk break-even that pays off in a decent profit even if only indirectly. The fact that CR has such a massive cut of each season on their site would suggest it's only getting more and more attractive to Japan.

From discussion about half a year ago at ANN, the normal streaming terms include a Minimum Guarantee that at least covers the cost of getting the materials to the streaming site, and so it would be break-even, and a profit if royalties cover the minimum guarantee and there are residuals royalties to be paid.

Crunchyroll was adamant that over half their income goes back to the rights holders (though I haven't heard that directly from them over the past half year), so if we are conservatively estimating they should have an income over $6m annually, that seems likely to mean they are paying out in excess of $3m annually in rights income.

[WTK]

via ANN forums | samuelp = Quarkboy

Originally Posted by samuelp

Let's have some fun with numbers!

Let's assume that CR with its 100,000 subs makes ~$5 a month from each (taking into account free trial month subs), and pays ~50% of that money back in royalties, for $250,000 per month.

Let's say that half of that goes to Naruto, leaving $125,000 per month.

CR currently has ~25 simulcasts or so, so per show that's $5000 a month.
Per episode therefore, approximately $1250 in money that goes back to the production committee per episode from subscription money.

This fits within a ballpark range of what I know about current streaming rights MGs.

For a 12 episode series, that's $15,000. Assuming that a Japanese bluray box set comes out priced at $250 and about 50% of that price ends up as profit, we can make this statement:

Streaming on Crunchyroll is equivalent to the sales of approximately 120 sets of Japanese discs.

Or putting it another way, 1 crazy Japanese otaku = 833 Crunchyroll subscribers

Originally Posted by samuelp

I'm just talking about money that goes to the anime companies. Not about CR's overall profitability. So money for drama or extra money for all access passes shouldn't be included in the money split for anime royalties.

Okay, then consider when I said "Naruto" to mean "the top 3 shows". I think it's not an unreasonable assumption to guess that the top 3 shows are watched as much as the lower 22 combined. It doesn't really change the answer much.

I didn't forget about any of that, I purposefully didn't count it because I'm trying to calculate the value of a CR _subscriber_.
The Daily Deals don't send any money as royalties directly to Japan (only indirectly through the retailer they are dealing with).
The bandwidth is a recoupable cost and was included in my estimate of 50% of money goes back in royalties. It is irrelevant to the calculation.

Originally Posted by samuelp

That's a good point, but 1 funimation purchaser is actually 1 funimation purchase of a single dvd set by your calculation.
I can easily buy 20 sets of funimation DVDs, but I can't subscribe 20 times to CR.
In other words it takes an order of magnitude more PEOPLE subscribing on crunchyroll than it does people who buy discs to send the same amount of money back to Japan.

[something]

Seems a bit dumb to compare CR subs to DVD/BD sales. They're profoundly different products at different stages of a show's life cycle and the latter is consumed by only by a tiny subset of the former's. Presumably it'd make more sense to compare them to domestic Japanese broadcast revenues, but even that is a less than useful comparison. Aren't most late night anime paying to get on TV (or as the station's cut of the production committee stake, or whatever)? At least with CR there's a small minimum guarantee rather than a "necessary evil" cost of doing business and promoting a show for merch and BD sales.

I wonder if shows streaming on Niconico (in Japan) work the same way? I'd assume so. They have a paying subscriber system and such too. I'm sure most production committees would love to do online streaming instead of traditional TV -- if it actually resulted in as much exposure, which surely it doesn't, at least in Japan. I'm not particularly eager for them to switch either, because that likely means the video quality of anything not on CR would probably be atrocious (hello Ebiten).

So the value of CR for licensors is not in how it compared to buying an R1 and sure as hell not to buying an R2, but to how it just makes something on what was, until CR, making nothing.

[agila61]

Originally Posted by something

Seems a bit dumb to compare CR subs to DVD/BD sales.

Well, it depends on the claim that is being addressed.

If the claim at hand is whether Crunchyroll on its own can replace the stream of income from Japanese otaku ... well, yeah, then you have to compare CR subs to Japanese DVD/BD sales, because the original claim is implicitly doing so.

If the claim at hand is whether Crunchyroll can grow to fill in a useful slice of a healthy share of overseas rights income ... then comparing CR subs to domestic DVD/BD sales is indeed a bit off.

For one thing, Crunchyroll streaming income comes earlier, and for another thing, for those series that are licensed for home video release, Crunchyroll streaming probably boosts home video sales.

Also, note something about Quarkboy's (samuelp's) figures:

Let's assume that CR with its 100,000 subs makes ~$5 a month from each (taking into account free trial month subs), and pays ~50% of that money back in royalties, for $250,000 per month.

Let's say that half of that goes to Naruto, leaving $125,000 per month.

CR currently has ~25 simulcasts or so, so per show that's $5000 a month.
Per episode therefore, approximately $1250 in money that goes back to the production committee per episode from subscription money.

This fits within a ballpark range of what I know about current streaming rights MGs.

First, its surely the case that half of the royalties do not go to Naruto ~ indeed, not even to Naruto and Bleach.

This is going to be different from leach streaming hits at a leach streaming site, and different from a pay per view plan.

This is a buffet-pricing subscription site, and even if Naruto or Bleach was indeed responsible for half of the decisions to subscribe, once people have subscribed and are paying an "all you can eat" fee ... a large majority are going to watch more than just one or two shows.

So the views of subscribing members are going to be more evenly spread than "popularity". The "I'm here for Naruto" crowd are going to watch a lot more than just Naruto.

So if Quarkboy's numbers say that half of what is likely going to license income is sufficient to cover the MG for all titles of a season, that implies that a substantial number of the more popular series are covering their MG and paying residual royalties. Maybe not a majority, but it could easily be eight or more series getting residuals.

And the way that subscriber views run, heavily tilted to the first two weeks after an episode goes up, they'll likely be getting those residual royalties before the season is finished.

So not only do they get the "free advertising" effect of the MG basically covering the extra costs of the streaming, making it more likely their series will get picked up for overseas home video release, and likely increasing sales if it is ... but if they are one of the Crunchyroll hits of the season, they'll be getting some extra revenues during the broadcast season.

Say that the 5th place show of eight getting residual royalties have 1/16th of the residual royalty pool. That would be about $25,000 in residual royalties for a "second tier hit".

Now, consider that in a typical growth curve, which starts out with explosive or "exponential" growth and then starts tapering off as it hits its market niche ... the drop off from explosive growth happens at roughly half the market size. So if Crunchyroll is still in its explosive growth phase, we are looking at a mature market of 200,000 or more.

That would mean the MG sufficient to cover the extra costs of streaming would only consume about 1/4 of total rights income, which would mean either higher MG's, and small but guaranteed surplus all around, or larger residual royalties ... or a mix of both.

If the market is maturing now, that means it'll grow into something like $30,000 guaranteed for a 13 episode series and an extra $50,000 on top for the hypothetical "second tier streaming hit".

And if the market is not maturing yet, but has another doubling to go before it starts maturing, that is a mature market of 400,000 subscribers, something like $60,000 guaranteed royalties for a 13 episode series and an extra $100,000 on top for a hypothetical "second tier streaming hit".

Now, of course none of those numbers are "sufficient to take the place of a domestic revenue source", but they are interesting numbers in terms of generating a healthy share of revenue from the total overseas rights income.

[Draneor]

Originally Posted by agila61

If the claim at hand is whether Crunchyroll on its own can replace the stream of income from Japanese otaku ... well, yeah, then you have to compare CR subs to Japanese DVD/BD sales, because the original claim is implicitly doing so.

No one claims CR could ever replace Japanese revenue. It's not even remotely possible. Especially considering R1 DVDs--at the height of the bubble--didn't even break 50% for western friendly companies like Gonzo.

[Damius]

Originally Posted by agila61

So the views of subscribing members are going to be more evenly spread than "popularity". The "I'm here for Naruto" crowd are going to watch a lot more than just Naruto.

Though, I wonder what will happen with that crowd the day Naruto will end. Will they stay? Or will they leave since the primary reason they were there was for Naruto.

[agila61]

Originally Posted by Draneor

No one claims CR could ever replace Japanese revenue. It's not even remotely possible. Especially considering R1 DVDs--at the height of the bubble--didn't even break 50% for western friendly companies like Gonzo.

We could well say that nobody serious claims that. But the fact that an argument is insanely impossible does not always keep people from putting it forward in internet forums.

Originally Posted by Damius

Though, I wonder what will happen with that crowd the day Naruto will end. Will they stay? Or will they leave since the primary reason they were there was for Naruto.

At least in the core region that gets over 50% of simulcasts, I think they'll stay, since people get into the habit of picking and following series for the coming season. Growth rates may taper off, though.

It will hurt worst in the regions that at present tend to get under 50% of new simulcasts, since access to long running series looms larger when access to seasonal simulcasts bounces around between bad and worse. That's Europe outside of Northern Europe, Africa outside of South Africa, the Middle East, and Asia (including Southeast Asia). Those are a smaller share of total subscribers, (which is both explained by and strongly helps cause the more limited access), but still a hit is a hit.

[TheDreaming]

Count me a premium member since around June.

[WTK]

via ANN

Crunchyroll Reports 200,000+ Paid Subscribers
posted on 2013-03-23 02:35 EDT

Online media service Crunchyroll revealed in its presentation at Tokyo International Anime Fair (TAF) that the service has over 200,000 paid subscribers, double the number the company reported six months ago. With subscriptions starting at US$6.95 per month (not counting discount sales), the animeanime.jp website estimated that monthly subscription revenues would be well over 100 million yen (about US$1 million).

Crunchyroll stated that it is looking to expand its sales of anime, manga, figures, and games. The company also mentioned that the crowdfunding of fan-suported projects is a concept that fits well with the service. Crunchyroll's recent projects included an app for Xbox 360 consoles that went active on XBox Live in December.

Source: animeanime.jp

[Damius]

Wow, that's impressive. I never thought they would reach 200,000+ this fast.