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The secret to Crunchyroll’s success

Crunchyroll recently announced it had passed the 1 million paid subscriber mark. Here’s how the anime service did it, and how it plans to keep the growth coming.

The Crunchyroll recipe for success

Colin Decker Crunchyroll

Colin Decker, COO Crunchyroll

On the face of it, the way Crunchyroll has been so successful is deceptively simple. According to Colin Decker, COO of Crunchyroll, from the very beginning the service has been completely focused on bringing value to the already strong anime community.

The first step in doing this was to build an extensive library of over 900 shows with 25,000 episodes available providing 8000 hours of content. However, it has developed other features to make the service much more than just an on-demand library.

Crunchyroll adds between 40 and 70 new anime series per quarter to the service, and many episodes are available within 1 hour of their first broadcast in Japan. These simulcast events are a unique feature of Crunchyroll. Mr. Decker says simulcasts are reinvigorating appointment viewing, bringing fans of a show together to enjoy the new episodes as they are released.

The Anime Awards are another new feature intended to bring value to the anime community. At the beginning of 2017, fans were encouraged to vote for their favorites in 14 different categories, including Hero of the Year, Villain of the Year, Best Couple, and Best Fight Scene. On January 28th, the winner of the Anime of the Year award was announced at an event in San Francisco, which was streamed live through the Crunchyroll app and website.

How the service uses data

Like other online services, Crunchyroll gathers a wealth of data on how its users enjoy the content. Unlike other services, it does not use that data to recommend or push shows to individual users. Instead, Mr. Decker says the service focuses on making the library as easy to browse as possible.

One way the service does use the data is to optimize the content it licenses. By way of example, Mr. Decker talked about a very unusual anime show, Yuri on Ice. This gay-oriented drama about ice dancers was not an obvious fit for Crunchyroll’s users. But looking at the data, it became clear it could appeal to young women, a large proportion of Crunchyroll’s audience. Not only was Yuri on Ice a big hit with viewers, it went on to win top honors at The Anime Awards.

I asked Mr. Decker if the user data might lead to the company creating its own originals. Once again, the anime community remains at the heart of the company’s approach to content. He said Crunchyroll is already investing in some productions and co-producing some titles. Going forward, rather than create its own originals, he said it would continue to partner with the providers in Japan.

Looking to the physical world to enhance the digital community

In an unusual move, Crunchyroll is expanding from the digital world into the physical. It is doing this in two ways.

The company announced its first anime festival, called Crunchyroll Expo. Coming to the Santa Clara Convention Center on August 25 – 27 2017, the event will focus on the worlds of anime, manga, games and cosplay. The Expo will feature special events, premieres, and interactive features focused around anime pop culture.

Mr. Decker says the event will avoid the blatant commercialism of some conventions. Rather, he wants it to be “the coolest best thing for fans. We just want to celebrate anime and the fans.” He also wants to make sure those that can’t get to the convention can join in the fun. Some of the events at the Expo will be live streamed through the Crunchyroll app.

The other way the company is moving into the real world is by hosting anime movie nights in movie theaters. Crunchyroll is working with Screenvision Media, a national cinema advertising company, and KAOS connect, a cinema event organizer, on each Anime Movie Night.

Each event will feature select anime episodes or full-length theatrical releases. As well, fans will see bonus material about the featured anime content.  The first Anime Movie Night will happen in April 2017, with one per quarter for the rest of the year.

On competition

With Amazon announcing its own anime video service in January, I wondered if Mr. Decker was concerned about the competition. He didn’t see it that way. He sees Amazon’s move as a validation of the category. And who can argue with that. The company grew paid subscribers 36%, to 1M, last year and now has 20M registered users. With a raft of new community oriented features, it looks to be positioned for more of the same in 2017. At this rate, it seems set on a course to overhaul mainstream services like Showtime and HBO Now.

Why it matters

Anime service Crunchyroll reached the 1M subscriber milestones, putting it on a par with mainstream services like Showtime and CBS All Access.

It has done it with a laser focus on bringing value to the anime community.

New features suggest it could be headed for more aggressive growth in 2017.

<This piece was updated on 2/24/2017 to reflect corrected information provided by Crunchyroll.>

 

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