Ars Technica has a great piece on CrunchyRoll’s business model:
[…] making money in anime isn’t hopeless; it turns out that anime lovers will pay for content even in an age of widely available free versions. “In almost all cases, piracy is not an issue of legality,” says Kun Gao, CEO of the anime streaming site Crunchyroll. It’s often a market issueâ€”and Crunchyroll turns a profit by offering anime lovers what they want: legal access to anime shows right after new episodes have aired in Japan.
Pirates can’t compete with this kind of availability, since even the most dedicated fansub groups need time to do their own translations. Crunchyroll gets its content a week before first air date, giving it time to do a proper subtitling job. Piracy may never go away, but Crunchyroll is out to prove that “competing with free” is possible by treating piracy like a business problem.
But for those willing to spend $7 a month, Crunchyroll offers 720p ad-free streams available on devices from laptops to iPhones and Android tablets. And its real innovation is offering most of these streams the moment the original broadcast concludes in Japan. (Sixty percent of its current library of shows can be streamed this way.)
Under its deal with studios, Crunchyroll receives secured prerelease versions of new anime episodes a week in advance; in-house translators prepare subtitles, and the streams are ready to go one hour after new episodes air. Such immediate access isn’t even available in Japan. “It’s a bit of a shame that our animation for US fans is better than the animation service Japanese fans get,” says Kun. And it’s certainly a rarity when it comes to worldwide distribution of non-anime premium video content.
Agreed – the only reason I torrent is because I simply don’t have any other choice.
It would be great if they extended to other silos. For example, I’d happily pay the monthly fee for access to BBC stuff like Dr Who and Sherlock, and SyFy stuff like Stargate Universe. There’s a good business model here that can be expanded to basically any niche genre on television.