Answerman

How Big Of A Deal Is Crunchyroll Reaching A Million Subscribers?

Branko asks:

Reaching a million paying subscribers is a significant achievement by any measure, but what exactly are the implications of Crunchyroll achieving that milestone? What does it mean for the simulcast anime it streams? Does it mean anything to Japanese producers? As fans, how should we view this not irrelevant but not game changing number?

Crunchyroll's milestone of reaching one million paying subscribers is a pretty big deal. In the world of anime, "one million" is a number that very very few products have ever attained. Even at the peak of the 90s anime bubble, Ninja Scroll -- the best selling anime of the era -- only sold around a quarter million units, and no non-Ghibli/Pokémon release has ever come close to that. That means that, worldwide, Crunchyroll has more current paying subscribers than people who bought the top 5 anime releases in history, combined.

That is a big deal. It also means that we can get a (very) rough estimate of how much money they're taking in: One million subscribers times $6.95 per month means they're making $6.95 million dollars of revenue a month, or $83.4 million per year. Of course, this is nowhere near the whole picture. A certain percentage of subscriptions are sold through iOS or Android in-app purchases, and they take a percentage (around 30%). There are taxes, credit card transaction fees, and other expenses that are taken out before Crunchyroll gets paid. But on the other hand, some people have a "Premium+ membership" ($11.95/month), and other revenue is made from merchandise sales and other ancillary sources of income. But it's a starting point of an idea as to how successful they are.

While we're not privy to the company's operating expenses, we can say for certain that the vast majority of that revenue is going back to Japan as license fees and royalties. That's a LOT of money flowing back into anime production that Crunchyroll is responsible for. And while that's not exactly new news to any industry watcher or anime producer, having that big, shiny round number is a brand new reason why EVERYONE should take the company seriously. Nobody else can even come close to getting that kind of revenue out of the international streaming market. Whether they're thought of as a trusted partner, or an uncontrollable behemoth upon which Japan is too dependent, that number is only likely to intensify those feelings.

Crunchyroll is also one of only a handful of streaming services that can absolutely be called a success, following on Netflix, Amazon Prime and Hulu. However, they're pretty far behind the mainstream services: Hulu is the smallest of the "big three," and the last subscriber number they announced was 12 million -- and they ONLY service the United States (not even Canada). Netflix, the undisputed leader in content streaming, has nearly 50 million subscribers in the US alone. So in terms of mainstream content, Crunchyroll is still a relatively small player.

No doubt that Crunchyroll's parent company Ellation (and their major shareholders AT&T and Chernin Group) want to see them grow way beyond that, and having other brands under the Ellation umbrella can mean that the company's impressive infrastructure can be used for other types of content without the Crunchyroll team lose their focus on anime and dramas. To them, this number is a nice, impressive thing that can be held up as some measurement of success. But they likely are wishing for world domination.

Crunchyroll is only starting to make inroads in many territories around the world (licensing new shows for every country they service is a huge challenge), so I expect this number to grow in the coming years. However, whether growth can be sustained in North America and other English territories likely depends both on anime fans themselves, and on the quality of the content the company will be able to secure. That's a lot of variables.

All that is to say, nobody knows what will happen in the future. Obviously.

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Anime News Network founder Justin Sevakis wrote Answerman between July 2013 and August 2019, and had over 20 years of experience in the anime business at the time. These days, he's the owner of the video production company MediaOCD, where he produces many anime Blu-rays. You can follow him on Twitter at @worldofcrap.