Anime Streamer Crunchyroll Finds Its Niche Among Streaming Giants

“There’s a world where some of these (outlets) can survive if they have something new and different,” says former NBC Studios President Tom Nunan

In a world where seemingly every major media company has its own streaming service, is there room in the market for a streamer without a massive library, an endless supply of original content or a boatload of cash?

Crunchyroll, owned by WarnerMedia, could fit the bill. This week, the anime streaming service announced two new executives to lead its content strategy and gaming teams. It plans to produce content for WarnerMedia’s upcoming streaming service, HBO Max, which launches in May. Although it offers highly specific programming, Crunchyroll could find its place in the competitive streaming landscape.

“Crunchyroll is a great example of something that could survive,” said Tom Nunan, Co-Founder of Bull’s Eye Entertainment, UCLA lecturer, and former NBC Studios president.”Niche is everything when it comes to non-library streaming plays. If these other services want to survive, they have to really intensely speak to a particular niche audience or they will fail.”

Crunchyroll was created in 2006 as an online streaming service for anime and manga fans in the United States that wanted to watch subtitled (and sometimes dubbed) versions of their favorite full-length shows from Asia. Warner Bros.-owned Otter Media invested in a $22 million funding round for Crunchyroll in 2015, making it a subsidiary of WarnerMedia. The company’s offices span three continents, but its headquarters remains in San Francisco.

Last year, HBO Max announced that some of Crunchyroll’s content will be part of WarnerMedia’s HBO Max streaming platform, which is set to launch in two months. Crunchyroll declined to provide additional details on the deal beyond saying it will “curate” content for the streaming service.

While Crunchyroll’s specificity is a strength, it can also be a slight barrier to entry.

“Boy, talk about niche programming,” Nunan said. “It’s almost as though you’d have to already be in the club to be interested in that.”

Even with the backing of an entertainment industry titan like WarnerMedia, paid subscriptions are something Crunchyroll needs to exist. It currently reports 60 million users worldwide, but only about two million paid subscribers.

On Monday Crunchyroll made key executive hires, including recruiting Alden Budill to serve as head of global partnerships and content strategy. Budill was the vice president of distribution at the Oprah Winfrey Network for five years and before that, she worked for MTV Networks as its vice president of strategy.

Budill told TheWrap she plans to use her experience to aid Crunchyroll’s content acquisition and distribution.

“I’ve been fortunate to spend much of my career focusing on bringing great content to passionate fan bases, and I’m delighted to join Crunchyroll, particularly given its reputation for authenticity and its focus on fandom,” she said.

There are roughly 30,000 episodes of content on Crunchyroll’s platform, more than any other closely competing network, Budill said.

In 2017, Crunchyroll began to realize there was a natural synergy between its televised anime and manga viewers and the gaming world and decided to capitalize on it by creating an interactive games division to publish mobile and web games based on existing anime titles.

“We’re very clear on the fact that there is incredibly strong overlap between our audience and the gaming audience,” Budill said. “Knowing there is such a strong overlap between a love of anime and a love of gaming, it makes perfect sense that we’re using anime as the underpinning of the gaming efforts.”

The company’s second new hire, Terry Li, is bringing his experience in the world of big tech to help with that. After working with Crunchyroll for several years as an advisor, he joins the company as its general manager of games and head of 360, which entails supervising Crunchyroll’s live events, ecommerce, and consumer products.

After a stint as a software engineer at Amazon, Li worked his way up to a product manager position at Google. He transitioned to gaming full-time two years ago when he was hired to lead China publishing for Riot Games and its owner Tencent.

Li said much of Crunchyroll Games’ current work is adapting eastern games for a western consumer base.

“We’re not looking to develop games from scratch and try to build their own audience. We’re trying to figure out how to best cater to our existing anime audience — which is quite sizable — by finding good anime or anime-looking games, wrapping around some of the more western structures of gameplay and mechanics that makes it more amenable for our audience, and then publishing that in western territories,” Li said.

Nunan said it’s not unheard of for smaller streaming networks like Crunchyroll to supplement their video offerings with games; events also usually play a large role. In a typical year unhindered by COVID-19, Crunchyroll operates a packed events slate, including hosting the Anime Awards, the Crunchyroll Expo anime convention, and more.

Crunchyroll announced its first foray into original content in January with eight planned shows. Its second series, “Tower of God,” premieres on April 1.

“These stories range from the traditional to the innovative, blending eastern and western ideas within the spectrum of anime (and) we hope this content will not only delight our current fans but also create a pathway for new fans to fall in love with this amazing art form,” Crunchyroll General Manager Joanne Waage said in a statement.

Creating original content could be a way for Crunchyroll to keep its fan base consistently engaged and excited about its content, Nunan noted.

“There’s a world where some of these (outlets) can survive if they have something new and different that will speak to a fanbase with real passion,” said Nunan.

The company is betting that its gaming offerings could be a way to gain more subscribers, who spend $8 monthly for a premium ad-free version of the streaming site. Li said building games around existing shows can drive people back to watching them.

“Instead of developing everything from scratch, we might license an existing game and adapt it, we might work off of an existing intellectual property and build gamification mechanics around it,” Li said.

Mobile gaming is a field traditionally embraced by women — roughly 60% of women surveyed in a 2018 study from NewZoo reported playing games daily, compared to 40% of men. That could be a key way for Crunchyroll to diversify its audience if it can convert those players into subscribers, Nunan noted.

“Anime is a mature art form at this point and there are plenty of women who love anime too — it’s just a question of, are they going to go to a streaming service for it,” said Nunan. 

Samson Amore

Samson Amore

Tech and Games Reporter • • Twitter: @samsonamore


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