Crunchyroll, launched in 2006 by a group of UC Berkeley grads (Kun Gao, James Lin, Brandon Ooi, and Vu Nguyen), began as an anime streaming platform that provided user-generated and fan-subtitled content, offering access to anime for international audiences. Initially controversial for its reliance on unlicensed streaming, the platform quickly gained popularity among anime fans who sought content otherwise unavailable outside Japan. Crunchyroll’s early days reflect the passionate demand for anime content and the strong community it fostered, leveraging a fanbase eager to share their love for Japanese animation.
Origins and Early Challenges
Crunchyroll started with a unique fan-driven model, where it hosted user-uploaded anime, often subtitled by passionate fans. This attracted a strong following from anime lovers with limited access to Japanese content. However, this came at a cost. Many of the uploads were unlicensed, leading to copyright infringement issues. Major anime distributors like Funimation quickly responded, issuing copyright violation notices and demanding that Crunchyroll remove the illegal content.
In a public statement, Funimation expressed concerns about how platforms like Crunchyroll, if left unchecked, could damage the entire anime industry by providing free access to unlicensed content. Bandai Entertainment echoed similar concerns, stressing that illegal streaming undermined the sustainability of anime production in Japan and the U.S. Despite the initial backlash, Crunchyroll continued growing as its fans remained loyal, even as industry players sought to curb its influence.
From Piracy to Legitimacy
The turning point came in 2009 when Crunchyroll secured its first major licensing deal with TV Tokyo to stream Naruto Shippuden, a popular anime series. This move marked the platform’s shift from operating in a legal gray area to becoming a legitimate business focused on securing proper licenses for its content. Alongside Naruto, major studios like Gonzo and Toei Animation began partnering with Crunchyroll, allowing it to offer licensed anime to its growing global audience.
While Crunchyroll’s decision to go legit resulted in an initial drop in traffic—15% of its unique visitors left when pirated content was removed—the platform quickly recovered. It soon became the leading legal anime streaming service, showing studios that international fans would pay for timely, high-quality access to anime.
Expansion and Business Model Evolution
Adoption of the SVOD Model (2009-2013)
Crunchyroll transitioned from an ad-supported platform to a subscription video-on-demand (SVOD) model in 2009, allowing users to access premium content through paid subscriptions. Introducing premium membership tiers offered benefits such as ad-free viewing, early access to simulcasts, and HD streaming, transforming Crunchyroll into a legitimate platform for licensed anime. This shift attracted more anime fans seeking high-quality streaming with timely access to their favorite shows.
Revenue Diversification
Crunchyroll diversified its revenue streams by integrating advertising, subscription services, and e-commerce. The platform began selling anime-related merchandise, including figures, DVDs, and collectibles, allowing it to monetize its passionate fanbase further. This diversification secured financial stability and enhanced user engagement through additional touchpoints in the anime ecosystem.
Focus on Simulcasting
In 2009, Crunchyroll revolutionized the anime industry by introducing simulcasting, which allowed users to stream anime episodes simultaneously with their broadcast in Japan. This innovation greatly reduced piracy and strengthened Crunchyroll’s reputation as the premier platform for timely access to the latest anime content, fostering a real-time global anime community.
Acquisition by Otter Media and AT&T’s Influence
Otter Media’s Acquisition (2013-2018)
In 2013, The Chernin Group, led by former News Corp executive Peter Chernin, acquired a majority stake in Crunchyroll. The media company recognized Crunchyroll’s potential to expand beyond anime into other genres, but its focus on niche audiences remained vital. Although the financial terms were not disclosed, this acquisition marked a crucial step in Crunchyroll’s growth.
Further growth came in 2014 when AT&T joined forces with The Chernin Group to form Otter Media, a joint venture with $500 million in funding. Through Otter Media, Crunchyroll gained access to more resources and infrastructure, which allowed it to expand its content library and global reach, solidifying its position as a major player in the anime industry.
AT&T’s Acquisition of Otter Media (2018)
In 2018, AT&T acquired The Chernin Group’s controlling interest in Otter Media, gaining full control of the joint venture and further strengthening its presence in the digital media landscape. Otter Media, a prominent player in the subscription, advertising, and content sectors, included subsidiaries such as Ellation, which operated the Crunchyroll and VRV brands. Otter Media also owned Fullscreen, a digital media company, its Rooster Teeth brand, and stakes in global content studio Gunpowder & Sky and Reese Witherspoon’s media company, Hello Sunshine.
While the value of AT&T’s acquisition of Otter Media was not disclosed, the move positioned AT&T as a key player in online subscription video services through Crunchyroll and its associated brands. This acquisition allowed AT&T to invest further in the growing anime platform and leverage its increasing global popularity.
The Sony Acquisition and Integration with Funimation
Sony’s $1.175 Billion Acquisition (2021)
In 2021, AT&T sold Crunchyroll to Sony’s Funimation Group for $1.175 billion in cash. This merger brought two former competitors together under one corporate umbrella, creating the largest anime content library in the world. Through Funimation and Crunchyroll, Sony aimed to provide a unified anime subscription experience, offering fans access to anime across platforms—whether through streaming, home entertainment, theatrical releases, or even gaming.
The integration resulted in significant business synergies. By uniting Crunchyroll and Funimation, Sony expanded its offerings beyond streaming, pushing into areas such as video games, theatrical releases, and merchandising. Crunchyroll already had a growing gaming division, and the merger further amplified Sony’s influence in this space with mobile and web games based on popular anime franchises. Additionally, Sony’s vast entertainment infrastructure allowed Crunchyroll to extend its reach into home entertainment, live events, and even linear TV, offering anime fans multiple ways to engage with their favorite shows
This merger was also strategic for Sony’s broader ambition to dominate the global anime industry, valued at approximately $24 billion in 2019. Crunchyroll’s extensive library of over 1,000 titles and its role as a major player in the international anime market helped Sony expand its presence in key regions such as North America, Europe, and Latin America
Monetization Beyond Streaming
The Flywheel Model (2022-Present)
Crunchyroll has evolved beyond a streaming service, building a vast anime ecosystem encompassing theatrical releases, manga, games, and exclusive fan events like Crunchyroll Expo. The platform’s ability to engage its audience through various touchpoints has helped it grow significantly, particularly with its expansion into e-commerce. Crunchyroll’s merchandise sales, including collectibles, action figures, and apparel, tap into the passionate fandom that has remained loyal throughout its evolution.
In 2023, Crunchyroll strengthened its position in the anime market by acquiring Right Stuf, a major specialty anime and manga merchandise retailer. This acquisition allowed Crunchyroll to diversify its revenue streams and expand its presence in the collectibles market, although it faced some criticism for discontinuing the sale of adult-oriented content.
As SVP of Global Commerce Mitchel Berger described, Crunchyroll’s approach revolves around a “flywheel” model where multiple revenue streams, such as streaming, merchandise, home entertainment, and distribution, reinforce one another. This interconnected system keeps Crunchyroll’s revenue strong and continuously growing.
Partnerships with Other Sony Brands (2022-Present)
Sony’s ownership has also brought new synergies between Crunchyroll and other Sony assets. In December 2023, Sony announced that select Crunchyroll shows would be added to Sony Pictures Core, a movie-based service available to PlayStation Plus Premium subscribers. This partnership has helped broaden Crunchyroll’s audience by integrating anime content into Sony’s vast entertainment ecosystem, from streaming to gaming.
By leveraging PlayStation’s massive user base, Crunchyroll has gained additional visibility, bringing anime to a broader audience while maintaining its niche focus. This move aligns with Sony’s strategy of uniting its entertainment platforms to provide a holistic experience for fans.
Launch of 24/7 Anime FAST Channel (2023)
In 2023, Crunchyroll expanded further by partnering with GSN, a fellow Sony Pictures Entertainment subsidiary, to launch a 24/7 anime streaming channel. Available on platforms such as Amazon Freevee, LG Channels, Roku, and Vizio WatchFree+, the channel targets an “anime-curious” audience with popular titles like Horimiya, Ranking of Kings, PSYCHO-PASS, and To Your Eternity. This venture reflects Crunchyroll’s ongoing efforts to extend its reach beyond core subscribers, offering more anime exposure across various free, ad-supported streaming services.
Collaboration and Competition
Crunchyroll’s Role in the Broader Streaming Ecosystem
While generalist platforms like Netflix, Amazon Prime Video, and Hulu have expanded their anime catalogs, Crunchyroll’s specialized focus gives it a distinct advantage. As a dedicated anime platform, Crunchyroll caters directly to the nuanced tastes of anime enthusiasts, offering the most extensive library and fan engagement in the industry. Despite their attempts to capture the anime audience, these broader platforms lack the depth of content and community that Crunchyroll has cultivated over the years.
Rather than viewing Netflix’s growing involvement in anime as direct competition, Crunchyroll sees it as an ecosystem-wide benefit. Mitchel Berger, Crunchyroll’s Senior Vice President of Global Commerce, noted “Any time that we can expose people to anime, I think it’s better for the industry, it’s better for us.” Netflix’s reach introduces new audiences to the genre, driving fans to explore Crunchyroll’s more comprehensive offerings.
Crunchyroll frequently licenses content to platforms like Netflix, including popular series like Jujutsu Kaisen, Spy x Family, My Hero Academia, and Black Clover. This strategy positions Crunchyroll as both a producer and gatekeeper of high-quality anime content. The approach is multi-faceted: some titles are available exclusively on Crunchyroll before moving to other platforms, while others appear simultaneously across multiple services. This allows Crunchyroll to maintain its position as the go-to platform for anime while benefiting from the additional exposure major streamers offer.
Even as Netflix invests in original anime, Crunchyroll remains the premier destination for true anime fans, ensuring deep engagement through its vast library, exclusive simulcasts, and community-driven features. Crunchyroll reinforces its influence by playing a central role in distributing anime across platforms, ultimately benefiting from its growing global popularity. The ‘anime streaming wars’ are ongoing, but Crunchyroll’s ecosystem-driven approach ensures that its specialized offering remains unmatched.
Building Revenue Through Fan Engagement
While platforms like Netflix, Disney, and Amazon Prime pursue broader content strategies, Crunchyroll focuses on its anime-specific brand and community-building initiatives. Crunchyroll nurtures long-term fan engagement through exclusive events like Crunchyroll Expo, simulcasts, and licensed merchandise. As Mitchel Berger put it, “Anime fans know instantly whether they’re a fan or not,” underscoring Crunchyroll’s commitment to its core audience.
Crunchyroll’s subscription model plays a central role in its revenue, offering multiple tiers: Fan ($7.99/month), Mega Fan ($11.99/month), and Ultimate Fan ($15.99/month). These tiers reflect its investment in exclusive content, mobile games, and benefits like early access to simulcasts. The company also sublicenses anime to platforms like Netflix, expanding its reach while maintaining deep fan loyalty through bundling deals and exclusive experiences. Crunchyroll’s anime-centric strategy contrasts with rivals’ attempts to expand their anime offerings, ensuring sustained engagement and revenue growth.
Bundling as a Key Growth Strategy
Crunchyroll’s partnership with Bango underscores the growing importance of bundling in streaming. By collaborating with mobile carriers, broadband providers, and banking apps, Crunchyroll is expanding its international reach while offering convenient and cost-effective options for consumers.
Bundling has become essential for streaming services to scale efficiently. According to Omdia, telco-led bundling could account for 25% of global SVOD subscriptions by 2029 as consumers increasingly seek bundled services for simplicity and savings. This trend benefits Crunchyroll by reducing customer acquisition costs and improving profitability.
By leveraging these partnerships, Crunchyroll can expand its audience through indirect channels while controlling its revenue streams. As bundling plays a crucial role in streaming strategies, Crunchyroll is well-positioned to grow its subscriber base and maximize revenue in a competitive landscape.
Crunchyroll’s Future
As of 2024, with over 15 million subscribers, Crunchyroll continues its rapid growth, evolving from a niche anime streaming service into a global multi-platform brand. Its expansion beyond traditional streaming into gaming, merchandise, live events, and theatrical releases has positioned it as a leader in the anime industry. By tapping into various touchpoints such as streaming, e-commerce, mobile games, and fan events, Crunchyroll ensures that it sustains its existing user base and continues attracting new fans globally.
Looking forward, Crunchyroll is poised for further expansion, particularly by deepening its integration with Sony’s entertainment and electronics divisions. This synergy opens up possibilities for immersive experiences such as VR-based anime interactions, expanded gaming opportunities, and enhanced cross-platform content delivery, leveraging Sony’s massive entertainment infrastructure. These developments will likely allow Crunchyroll to offer fans even more ways to engage with their favorite anime, making it a key player in shaping the future of anime entertainment.
In addition, Crunchyroll’s journey offers valuable lessons for media executives aiming to grow niche streaming platforms. Its focus on building strong community ties, fostering fan engagement, and exploring diverse revenue streams has allowed it to succeed in a market increasingly dominated by large players like Netflix and Amazon. As the streaming industry consolidates, Crunchyroll’s success illustrates that a well-defined niche strategy combined with thoughtful expansion can create a sustainable model for growth and longevity in the entertainment industry.
Crunchyroll’s ability to innovate and adapt will ensure its continued relevance, positioning it as a model for how niche streaming platforms can thrive in an increasingly competitive digital landscape.
