Crunchyroll combined their know-how as a black market dealer with a knowledge of repeating market phenomena to create a Blue Ocean.
Earlier today, Crunchyroll announced that they surpassed 100,000 premium subscribers. The service, which offers subscriptions for both anime and Asian dramas, began as a for-profit fansub streaming site. In 2008, the company secured an investment of $4.06 million from Venrock, a venture capitalist group, though they continued to come under heavy fire as the site continued to allow user uploads. Their business model changed in 2009, when they began securing legal licensing agreements through Japanese licensors like Gonzo and TV Tokyo. The company made its first foray into the anime DVD market with its license of 5 Centimeters Per Second in 2010.
To hear that Crunchyroll is growing so quickly is interesting indeed. In the three years since their legal debut, the company’s become almost synonymous with online anime. The company’s managed to place its brand into every visible market, from the browser, to game consoles and set-top boxes. Established competitors like FUNimation and The Anime Network have continuously tried to flex their muscle to enter the market, with limited results. In short, Crunchyroll was a Blue Ocean product, born of unusual circumstances. The company was able to leverage the infrastructure and expertise from its black market days to create a product that would disrupt the entire industry.
Certainly, it’s not the best product on the market. Anybody that’s been booted from a stream during peak hours, or forced to deal with lagging video streams can attest to. Hoewever, as we’ve discussed in the past, a disrupted product can be described as “crappy products for crappy customers.” The fact that their service is easy to navigate, and able to be experienced in nearly any context for free.
The fact that the $6.95 price tag, which grants higher-quality video formats, removed advertisements, and early access to streams, enticed over 100,000 paying subscribers is a testament to demand for such a product. The fact that 80% of these paying users visit Crunchyroll over ten times per day shows that the company has created an active, excited market. These are the sneezers, the customers that will actively evangelize and reach out of their standard tiers to pull more in and encourage growth in groups that often do not partake of anime to begin with.
At the same time, the company managed to offer an alternative that entices those who would normally take to Bittorrent and speed subs for their anime fix. Simulcasting and the impulse-buy price largely de-fanged many popular arguments from the casual black market users.
I can’t help but wonder, though, how Crunchyroll’s subscriber-base breaks down. Since the company offers subscription services for both anime and Asian drama, we can assume that it’s not a direct one-to-one split between the two products. So, without an accurate break-down, we can’t break down the specifics on the overall impact. It’s possible that Asian drama viewers could be enticed into anime, and vice versa via the site. Again, though, it’s difficult to say just how such a scenario does actually impact viewership of anime as a whole.
