December 9, 2017
Crunchyroll/VRV Interview: Plans For Anime Original Content, Competing With Netflix Originals, Anime Strike

The names of Crunchyroll and Funimation have become synonymous with online anime streaming over the years, but in recent times both Netflix and Amazon Anime Strike have essentially declared war. Both competitors have been gobbling up much of the popular anime series by securing exclusive international streaming rights. VRV (pronounced "verve") has been gathering many of the anime streaming companies under the same banner. While they don't plan on "out-Netflixing Netflix," the companies are already planning to strike back by thinking outside of the box.

One Piece, Dragon Ball Super, and Boruto are the jewels to Crunchyroll's crown, but the anime streaming service is hoping the next big shonen series will be the anime Black Clover. Crunchyroll has partnered with Screenvision Media and KAOS Connect to host movie nights for fans to gather and watch this popular anime series together.

Following the popularity of the Crunchyroll Movie Night (CMN) for The Ancient Magus' Bride, the event is growing to meet the increasingly high demand of its fans, presenting Black Clover in more than 200 theaters across the United States and Canada. Whereas previous movie nights have been one-night-only, this Crunchyroll Movie Night presentation will be offered over three days to maximize fans' ability to attend.

These type of partnerships define what makes VRV different from competitors like Hulu, Netflix, and Amazon Anime Strike. Crunchyroll is owned by Ellation, with majority investment from Otter Media, a joint venture between AT&T and The Chernin Group. Ellation launched VRV as a streaming platform that aggregates content appealing to Crunchyroll fans.

But besides being different, how do Crunchyroll and VRV plan on responding to the encroachment of Netflix and Amazon on their turf? I decided to interview representatives from these companies to find out.

Crunchyroll Gaming Survey Results

Many Crunchyroll users self-identify as gamers. The company ran a survey about gaming to better understand their community and fandom and find out what correlations they can draw between anime fans and gamers. Colin Decker is the chief operating officer (COO) at Crunchyroll and he's responsible for managing the strategic direction and day-to-day running of Crunchyroll's business. Arlen Marmel is the general manager of VRV. I decided to get the conversation rolling by asking about how the companies work together.

VRV is essentially promoting itself as the Netflix of nerds. How does the relationship between Crunchyroll and VRV work?

Arlen: From an audience standpoint, VRV is seeking to be the interstitial tissue of the niche content world. By definition, Netflix wants the biggest and broadest audience possible. With VRV, we desire to be big but most definitely not broad. We want to be the place for fringe experiences; a haven for risk-taking audiences. We know that won't appeal to everyone but those who "get it" will rejoice in going down the rabbit hole with us.

The VRV streaming platform offers Crunchyroll, Funimation, Cartoon Hangover, CuriosityStream, Mondo, Rooster Teeth, and several other popular paid channels as part of a package deal for $9.99 per month. How does that partnership work?

Arlen: From a partner standpoint, we operate pretty differently than Netflix. Many of our partners are brands that have owned and operated experiences - Crunchyroll, Rooster Teeth, Shudder, and Funimation. For them, VRV is an opportunity to reach new audiences, build their brand, and access ancillary revenue streams. When a user buys any of these channels a la carte we share 70 percent of the sub-revenue. We also share 70 percent of the ad revenue with our partners and compensate each uniquely for participation in the bundle. This helps them reinvest in programming to grow their business.

Netflix just announced that they are investing $8 billion into original content in 2018 alone. Besides producing original content, how does VRV plan on competing to stand out from the competition?

Arlen: As aforementioned, we have a pretty unique model based around aggregating partner brands. We believe that these brands have meaning to the audience and deliver a unique capability to curate programming, create content, and engender community. Rooster Teeth, for example, is truly a reflection of their audience and creates programming that no one else could; they are Rooster Teeth through and through.

We have no intention of out-Netflixing Netflix. We are doing something pretty unique that is built around embracing content and viewpoints that are narrow, not broad. We are focused on depth and unique voices that would likely get lost on some of the broader platforms.

Netflix has acquired the rights to 30 anime for 2018. Crunchyroll notably has Black Clover. How many anime is Crunchyroll hoping to have as exclusives in the coming year?

Colin: Crunchyroll has over 900 permanent titles in our library, hundreds of which are exclusive to our streaming service. We expect that will increase quite a bit in the coming years as our Japanese partners see the value in Crunchyroll's large and highly-engaged audience. For our fans and partners, Crunchyroll offers an immersive 360-degree lifestyle spanning streaming, live events, merchandise, books, news and more.

In regards to original content, Netflix has Stranger Things as its crown jewel. The main brands being touted by VRV are HarmonQuest, RWBY, and My Brother, My Brother, and Me. These shows appeal to the Dungeons & Dragons and anime crowd. Can you talk about future of original content for VRV? If not, what other genres does VRV plan on expanding into?

Arlen: VRV was very fortunate to have a close relationship with Crunchyroll and build off of their incredible legacy as one of the most successful niche streaming services in the world. As I stated earlier, we are seeking to be the interstitial tissues of the niche content world. To do that, we believe in building logically from one genre to another. Our programming filter is: Is it a niche? Is there a passionate fandom? Can we add joy?

To that end, we are exploring key categories like science and edutainment with CuriosityStream, and independent, foreign, and art house films with our relationships with MUBI and Fandor. We continue to be excited about science fiction, fantasy, and other foreign language content that has appeal outside its home country. I think you will see us continue to share amazing content with established channel partners and emerging players through our house channel VRV Select.

Earlier in 2017, Crunchyroll announced a new partnership with NBCUniversal Entertainment Japan to create and co-develop new anime series. Can you name any titles; have the rights to any specific manga or light novel series been secured? If not, how about a hint about the focus anime genres?

Colin: We don't have anything to share at this time, but we're extremely excited about the work we're doing with the amazing creative talent at NBCU Japan.

Is the plan for Crunchyroll's original content to focus on anime original stories or adapt existing manga or light novels?

Colin: The answer is "all of the above, and more." We don't view original content development as a single approach.

What's the budget like for this joint venture? Any idea on the number of anime original content that will release in 2018?

Colin: We don't share our financial details. In terms of titles, we don't have anything to share at this time but expect some great stuff to land in 2018.

Both Netflix and Amazon Anime Strike have started grabbing the exclusive international streaming rights for many, if not most, of the popular anime series coming out in 2018. How does Crunchyroll plan on responding?

Colin: As the anime category leader, Crunchyroll brings an average of 200 new simulcast titles to our service per year in partnership with licensors and creators in Japan. The mass-market streaming services have waded into anime, but at only a small fraction of this number. We have consistently offered the most if not all the top simulcast series every quarter.

Last year, Crunchyroll and Funimation partnered to expand access to anime. This year, Sony Pictures bought a majority stake in Funimation. Will the Sony acquisition change anything for Crunchyroll in the future?

Colin: Working with our partners at Funimation has been a labor of passion, as it has brought the best possible anime experience to the fans. We will, of course, continue our ground-breaking partnership, and are excited by the support Sony will bring to their business and to anime at large.

Funimation is known as the platform for English dub anime. Crunchyroll currently focuses on simulcast streaming of English sub anime. Since Crunchyroll is developing anime original content, will the English dubs be handled in-house?

Colin: We don't have anything specific we can share on dubs except to say that we look at things on a project-by-project basis, and are lucky to have great partners and talent everywhere to choose from.