Speaker 1: Welcome to Strictly Business, Variety's weekly podcast featuring conversations about
Speaker 1: the business of media and entertainment. I'm Tyler Aquilina, a
Speaker 1: media analyst for Variety Intelligence Platform. Anime or Japanese animation
Speaker 1: has come a long way in the past few decades.
Speaker 1: Fans who once had little recourse but bootlegs and piracy
Speaker 1: to watch their favorite shows are now part of a
Speaker 1: global community and a twenty billion dollar market that's even
Speaker 1: more robust internationally than it is in Japan. Perhaps no
Speaker 1: company better exemplifies that transformation than Crunchy Role. The Sony
Speaker 1: owned an anime focused subscription streaming platform which has long
Speaker 1: been a go to destination for watching Japanese animation stateside.
Speaker 1: Since launching is essentially an anime piracy site in the
Speaker 1: mid two thousands, Crunchy Role has grown into a legitimate
Speaker 1: anime powerhouse, with streaming, theatrical and live events businesses under
Speaker 1: its umbrella. Sony acquired the company for one point two
Speaker 1: billion dollars in twenty twenty one, and since then, Crunchy
Speaker 1: Role has continued to grow under the leadership of its president,
Speaker 1: Rahul Parini, who has overseen robust expansion of Crunchy Role
Speaker 1: into new markets and opportunities. Parini is passionate about the
Speaker 1: anime business, as you'll see, and has even bigger plans
Speaker 1: in store for what was once a tiny platform where
Speaker 1: users would catch fans subtitled episodes of Naruto and Dragon Ball.
Speaker 1: Our wide ranging conversation is coming up after the break,
Speaker 1: we are back with Rahul Parini, the president of Crunchy Role.
Speaker 2: Welcome, Thank you, dyler, thank you for me having me here.
Speaker 2: Looking forward to.
Speaker 1: This, Yeah, me too. So, just to start off, can
Speaker 1: you tell us a little bit about Crunchy Role and
Speaker 1: your role there.
Speaker 2: Yeah, Cunchyroll is a media and entertainment company focused on
Speaker 2: Japanese anime. Anime is a dynamic storytelling format. It's a
Speaker 2: medium that comes out of Japan and fans globally love it.
Speaker 2: And we are part of Sony Pictures Entertainment and I'm
Speaker 2: president of Country Roll. I've been part of this organization
Speaker 2: for about nine years. And yeah, it's a amazing medium
Speaker 2: and fan base that we get to serve. Yeah.
Speaker 1: Now, a big part of your business is bringing over
Speaker 1: these anime series from Japan to the United States market.
Speaker 1: For those who may not know, can you tell us
Speaker 1: a little bit about what does that process look like
Speaker 1: from a business perspective.
Speaker 2: Yeah, like you said, most of anime is conceived and
Speaker 2: created in Japan, and what we are focused on is
Speaker 2: taking those amazing stories from Japanese creators and bringing them
Speaker 2: to global audiences. So County Role currently operates in about
Speaker 2: two hundred countries and territory. So what we do is
Speaker 2: work with our partners in Japan. We take shows that
Speaker 2: they create and try to bring them to fans as
Speaker 2: soon as they are available in Japan. So majority of
Speaker 2: our content we work we license from our partners, but
Speaker 2: we are also working closely with our creative partners in
Speaker 2: Japan to produce some of the shows. So when those
Speaker 2: shows get released in Japan, we take them and we
Speaker 2: subtitled them into ten plus languages, We dub them into
Speaker 2: ten plus languages, and we try to make them available
Speaker 2: for our fans globally within an hour of broadcast in Japan.
Speaker 2: So it is it is a fast process. There's about
Speaker 2: fifty to sixty shows that we are bringing to audience
Speaker 2: every quarter, about two hundred to two hundred and twenty
Speaker 2: shows a year.
Speaker 1: Wow, and has the Sony acquisition made it any easier
Speaker 1: to do business in Japan. Has that affected how you
Speaker 1: guys do business over there at all?
Speaker 2: Look as Crunchy Role and some of the other companies
Speaker 2: that are part of Crunchy Role, like Funimation, We've been
Speaker 2: doing this for about twenty five to twenty eight years now.
Speaker 2: Funimation was set up originally in the mid nineties and
Speaker 2: was focused on bringing anime to the So we have
Speaker 2: very long and deep relationships in Japan that we've fostered
Speaker 2: and nature for a long time. But yeah, we Fundimation
Speaker 2: was acquired by Sony Pictures in twenty seventeen, and then
Speaker 2: we acquired County Role in twenty twenty one. Sony, as
Speaker 2: a Japanese company, has a deep, long relationship with the
Speaker 2: anime community, and so us being part of Sony definitely helps.
Speaker 2: It gives us a level of credibility. Being being owned
Speaker 2: by a Japanese company that has been in the anime
Speaker 2: ecosystem and has supported the ecosystem for a long time
Speaker 2: gives us a level of credibility. But our relationships are
Speaker 2: also a long, long term relationship, so both of those help.
Speaker 1: Yeah, yeah, for sure.
Speaker 2: I'm curious.
Speaker 1: Could you talk a little more about how the anime
Speaker 1: business has changed in the time that you've been involved
Speaker 1: with it. Obviously you were at Fundamation, you were heavily
Speaker 1: involved with that before taking over as president of Country.
Speaker 1: You know, how has the business of anime and also
Speaker 1: the culture around anime changed, you know, since you've been
Speaker 1: involved with it.
Speaker 2: Yeah. Look, I think both the business of anime and
Speaker 2: the impact of anime on the culture itself has been
Speaker 2: has been massive over the last nine years I've been
Speaker 2: part of this business. So the popularity of anime has
Speaker 2: been growing really fast globally, and that combined with the
Speaker 2: adoption of streaming and the accessibility of anime globally, has
Speaker 2: made anime reach a huge number of fans. That combined
Speaker 2: with if you think about who defines culture in our world, artists, taste,
Speaker 2: makers of fashion, celebrity sports, personalities and all of a
Speaker 2: lot of them talk about the impact of anime on
Speaker 2: who they are and how they approach their craft or
Speaker 2: who they are as a person. So in that sense,
Speaker 2: anime has had a huge impact on the culture and
Speaker 2: continues to have a huge impact on the culture.
Speaker 1: Yeah, and also obviously it's expanded a lot. You know,
Speaker 1: it was very much this looked at as this kind
Speaker 1: of niche market for such a long time. You know,
Speaker 1: what has it been like to see anime grow into
Speaker 1: such a huge international business? I believe now like the
Speaker 1: international market is bigger than the market for it in Japan, right.
Speaker 2: Yeah, for the first time about a year ago, the
Speaker 2: business done outside of Japan is larger than the anime
Speaker 2: business within Japan. So absolutely, all right, it's seen a
Speaker 2: huge growth internationally. Like Look, as you would probably expect
Speaker 2: me to say, we don't consider anime to be a niche,
Speaker 2: and if it is a niche, it is a gigantic niche.
Speaker 2: We have data and research that shows that there's about
Speaker 2: eight hundred million anime interested fans globe outside of Japan
Speaker 2: and China, we have over close to two hundred million
Speaker 2: people watching anime on official sources in those regions. Netflix
Speaker 2: released a couple of years ago that at least half
Speaker 2: of their subscription base washed anime during that period, so
Speaker 2: that's more than one hundred million plus, So it is
Speaker 2: it is huge in numbers. There's it's a big community.
Speaker 2: Like Polygon just released some data from their research that
Speaker 2: showed that forty two percent of gen Z watches anime weekly,
Speaker 2: which is more than some juggernauts in media like NFL.
Speaker 2: It's only twenty five percent of gen z watch, right,
Speaker 2: So all of that to say, it's no longer a niche.
Speaker 2: It is a its mainstream, it's really popular and it
Speaker 2: continues to grow, right Like, so we're excited. I think
Speaker 2: we expected to grow to be much bigger.
Speaker 1: Yeah, yeah, for sure. I'm curious about how you're expanding,
Speaker 1: you know, both Crunchy roles as a subscription streaming platform,
Speaker 1: but also kind of as a broader flywheel. Can you
Speaker 1: talk about some of the areas where you're growing the business.
Speaker 2: Yeah. So internally we say we don't want to be
Speaker 2: something for everyone. We want to be everything for someone,
Speaker 2: and that someone for us, is the anime fan. So
Speaker 2: our mission is to surround the anime fan and service
Speaker 2: them across their fandom. So we want to create amazing
Speaker 2: experience where however they want to exhibit their fandom. And
Speaker 2: so obviously streaming and our subscription service is a huge
Speaker 2: touch point for us with our fans, and it is
Speaker 2: it makes anime accessible for fans worldwide, and so it's
Speaker 2: a really important piece in our connection with the fans.
Speaker 2: Theatrical is another important piece of anime fans love to
Speaker 2: watch movies on the big screen with their friends and family,
Speaker 2: see these amazing visuals on a big screen, and we
Speaker 2: are we continue to lean into bringing more movies for
Speaker 2: our fans globally. At the same time, we also have
Speaker 2: games that are based on anime anime IP anime shows
Speaker 2: and that's something that we are continuing to invest in
Speaker 2: and lean into. E Commerce is another channel, so fans
Speaker 2: as they want to collect figures or other memorabilia from
Speaker 2: their favorite shows or buy apparel to where to demonstrate
Speaker 2: their fandom, we give them opportunity to do that on
Speaker 2: our store, on our e commerce shop and similar lyric
Speaker 2: whether it's consumer product, goods or events. We try to
Speaker 2: serve the fans however they want to exhibit their fandom,
Speaker 2: and look, we are seeing growth across all of those channels.
Speaker 2: Fans truly want to demonstrate their fandom. However, they can
Speaker 2: essentially literally where their fandom on their sleeve. So it's
Speaker 2: amazing to see these fans connect with those characters and
Speaker 2: show their fandom how they do.
Speaker 1: Yeah, now do you think kind of all those different
Speaker 1: revenue streams and opportunities to kind of bring people into
Speaker 1: the ecosystem. Do you think that has helped you guys
Speaker 1: kind of avoid some of the pitfalls that the broader
Speaker 1: streaming landscape has seen over the last couple of years.
Speaker 2: Look, look, I think the flywheel strategy, as you say,
Speaker 2: having these mix of touch points with fans has definitely
Speaker 2: been a differentiator for us. It's been a strategic priority.
Speaker 2: We know it has helped us connect with fans and
Speaker 2: have a longer term connection and relationship with our fans
Speaker 2: because of that approach, it has helped us address some
Speaker 2: of our retention and churn churned goals, which are major
Speaker 2: factors for most of streaming platforms. So yes, that the
Speaker 2: approach has definitely been a differentiator for us and continues
Speaker 2: to allow us to expand or reach with fans. Yeah.
Speaker 1: Yeah, tell us a little bit more about your audience
Speaker 1: maybe from the streaming perspective. You know, how do you
Speaker 1: describe your subscribers in terms of their viewing habits, their
Speaker 1: behavior in terms of churn and other patterns.
Speaker 2: Like I said, anime is a very dynamic medium and
Speaker 2: there is something for every fan In anime, there's multiple
Speaker 2: genres and so there is something for everyone. Our research
Speaker 2: shows that there is everybody from gen Z and Gen
Speaker 2: Alpha two boomers who are watching anime. But in general,
Speaker 2: anime fans tend to be young. Like I said, forty
Speaker 2: two percent of gen Z watch weekly. There's another twenty
Speaker 2: five percent of millennials that watch weekly, So the anime
Speaker 2: fans tend to be younger. They are also very diverse.
Speaker 2: African American, Hispanic and Asian American fans tend to over
Speaker 2: index then general population within the fan community anime fan community,
Speaker 2: so they are very diverse. There again to the question
Speaker 2: around their watch patterns and behavior, highly engaged, very passionate.
Speaker 2: They like to watch shows as soon as they're available,
Speaker 2: so it's not surprising for us to see a large
Speaker 2: spike in fans streaming at two am in the morning
Speaker 2: when their favorite show just launches. That's very typical. Again,
Speaker 2: like I said, they're very engaged. So on average we
Speaker 2: see thousand minutes a month, and that's the average across
Speaker 2: the globe. And you know there are fans that are
Speaker 2: watching twenty plus hours every week, so it is a
Speaker 2: very engaged fan base in terms of patterns and viewing behaviors.
Speaker 2: There's a lot of similarity in fans across the globe
Speaker 2: and how they watch and what they watch. But there's
Speaker 2: also a lot of differences, right. For example, fans in
Speaker 2: India love to watch action and adventure and fantasy shows,
Speaker 2: whereas fans in France are more open to art house
Speaker 2: and experimental shows.
Speaker 1: So that happens in France often.
Speaker 2: I think they're definitely more open to that kind of thing.
Speaker 2: And we see similar things across the world, whether it
Speaker 2: is Latin America or the US, and that's what makes
Speaker 2: this fun, right, Like, we we get to serve a
Speaker 2: very similar but audience that has very unique tastes across
Speaker 2: the world.
Speaker 1: Yeah, you mentioned India. I know you. You personally have
Speaker 1: really spearheaded a big expansion for country role in India.
Speaker 1: He tells about why that market specifically and what those
Speaker 1: expansion plans look like over there.
Speaker 2: Yeah. So India is the second largest anime market in
Speaker 2: terms of anime interest and anime watching outside of Japan
Speaker 2: and China. Only US has more anime interested fans in
Speaker 2: terms of true numbers absolute numbers outside of India, And
Speaker 2: for US it was a white space. We weren't there.
Speaker 2: There weren't many players serving that audience, so there was
Speaker 2: a real demand for anime in that community. There were
Speaker 2: there fans were eager to get an official service to
Speaker 2: UH serve them, serve them, and so we took that
Speaker 2: opportunity to be there and serve that audience in India.
Speaker 2: Like you said, we announced a big push about a
Speaker 2: year and a half ago, we launched our service with
Speaker 2: a catalog focused on that. We announced localization efforts where
Speaker 2: we started not only sub subtitling into several languages in India,
Speaker 2: but also dubbing our shows into Hindi, Telugu and Tamil
Speaker 2: and all of those have been very well received in
Speaker 2: the market, and I think our plans continue to do
Speaker 2: more things like that, like we are making more content
Speaker 2: available for our fans simultaneously with other across the global
Speaker 2: our global service, we are trying to localize more content
Speaker 2: to that to different parts of India. As you know,
Speaker 2: there's a lot of multiple languages in India and fans
Speaker 2: like to watch dubbed shows dubbed into their own language,
Speaker 2: so we're trying to localize more content. We also have
Speaker 2: announced a partnership with a couple of fairly popular Bollywood
Speaker 2: celebrities that are really big anime fans. Tiger schaff and
Speaker 2: Rushimi Kamandana, who who are really big advocates and big
Speaker 2: fans of anime, and we've partnered with them to bring
Speaker 2: Crunchy Role and more anime to fans in India. Very cool.
Speaker 1: You know you mentioned piracy, which I think is so
Speaker 1: tied up in the history of anime's global expansion. You know,
Speaker 1: like US fans used to have to had basically no
Speaker 1: recourse but piracy to find some of these shows. What
Speaker 1: strategies I think? You also mentioned the statistic that like,
Speaker 1: there's eight hundred million anime fans worldwide, but only two
Speaker 1: hundred million are watching on legitimate sources. Obviously, it's it's
Speaker 1: one thing to expand into a place like India where
Speaker 1: there is no legal avenue to watch these shows, but
Speaker 1: how are you combating and fighting piracy in markets where
Speaker 1: the legitimate sources is already available.
Speaker 2: Yeah. Look, piracy and an official sources of anime is
Speaker 2: a big component of anime watching for fans globally. Anime
Speaker 2: has been popular for a long time, but fans weren't
Speaker 2: able to access it until recently when streaming became a
Speaker 2: really viable option for fans. So piracy was the way
Speaker 2: where fans were watching these shows. For a long time.
Speaker 2: From our perspective, what we are focused on is convenience
Speaker 2: for fans. We want to make a service that is convenient,
Speaker 2: that gives the fans the ability to watch their favorite
Speaker 2: shows as soon as they watch however they want to
Speaker 2: watch it, whether it is subtitled into their favorite language,
Speaker 2: dubbed into their favorite language, on their favorite device, whether
Speaker 2: it is mobile or gaming console or a smart TV,
Speaker 2: and however they want to structure the experience. So our
Speaker 2: focus is on making this content available as soon as
Speaker 2: possible in whatever language they want, and as convenient as
Speaker 2: possible at a very comparative price. And we believe that
Speaker 2: is the strategy that is going to allow us to
Speaker 2: make this much more compelling and attractive to fans. To
Speaker 2: switch to an official source rather than using an official
Speaker 2: sources is.
Speaker 1: Kind of expanding ways to kind of funnel people into
Speaker 1: that also part of that, I know last year you
Speaker 1: guys expanded into the fast space, which is to say,
Speaker 1: free ad supported streaming. What are some of the opportunities there,
Speaker 1: and is that you know, another way to kind of
Speaker 1: reel people in who might not other way otherwise be there.
Speaker 2: Yeah, last year we announced that we were launching a
Speaker 2: twenty four seven ADS supported linear channel. It's available on
Speaker 2: most Fast platforms in the US now. Recently it also
Speaker 2: was made available on Pluto TV, and our strategy and
Speaker 2: approach with that is to make this content and anime
Speaker 2: available to casual anime fans where they are. As you know,
Speaker 2: Fast is a really emerging sizeable distribution channel to reach audience,
Speaker 2: and so we want to tap into that distribution mechanism
Speaker 2: to be able to put anime in front of fans
Speaker 2: in a curated way that we can introduce it to them,
Speaker 2: allow them to experience it in a quick, easy way,
Speaker 2: and if then they want a deeper connection or deeper experience,
Speaker 2: they can come to Country Roll for that deeper experience.
Speaker 2: And that's the that's the strategy. So we're seeing we're
Speaker 2: seeing fans engage with our Fast channel really really well
Speaker 2: on those platforms, and we're excited to see what we
Speaker 2: can do more and how we can attract them into
Speaker 2: our ecosystem. Yeah.
Speaker 1: Yeah, it's maybe easier to just catch an episode of
Speaker 1: Cowboy Bebop or something and be like, oh, that looks cool.
Speaker 1: What is that rather than just seeing this huge array
Speaker 1: of you know, posters in front of you, it'd be like,
Speaker 1: which one do I pick?
Speaker 2: Yeah? Like, look, I think like with any streaming service,
Speaker 2: there is so much content. Consumers have a hard time
Speaker 2: with discovery, right, and it's the same thing with anime.
Speaker 2: We have a lot of shows, a lot of different genres,
Speaker 2: and I think our idea is with a fast channel,
Speaker 2: we can curate an experience that makes it easy and
Speaker 2: convenient for fans to get in and try this, and
Speaker 2: if they like it, they can go have a deeper
Speaker 2: experience within our subscription service.
Speaker 1: Yeah, yeah, for sure, to talk a little bit more
Speaker 1: about that subscription business. You know, I'm curious, you know,
Speaker 1: as you said, obviously, if anime is a niche, it's
Speaker 1: a very large niche. But how do you view the
Speaker 1: position of streamers like crunchy Role that serve a particular
Speaker 1: specific interest in this media landscape where you know, companies
Speaker 1: only seem to get bigger and business modelsers seem to
Speaker 1: be more about offering all things to all people. You know,
Speaker 1: how do you see you know, platforms like crunchy Roll
Speaker 1: kind of fitting into the landscape like that.
Speaker 2: Like I said earlier, we're trying to be everything for someone, right,
Speaker 2: and that focus gives us an advantage. We know we're
Speaker 2: not going to be the first subscription service for a
Speaker 2: consumer or a household. What we are trying to be
Speaker 2: is that second or third subscription service. So if you're
Speaker 2: an anime fan, we want to add so much value
Speaker 2: that we would be that second subscription service or third
Speaker 2: subscription service. So from that perspective, we're not really competing
Speaker 2: with a general entertainment service because we know our fans
Speaker 2: will have a general entertainment service as an option because
Speaker 2: where they get their entertainment, but they come to us
Speaker 2: for their anime connection, right, And so that that focus
Speaker 2: and that clarity in terms of where we fit in
Speaker 2: our fans entertainment ecosystem gives tells us that we're not
Speaker 2: we're not really competing for the same thing as a
Speaker 2: general entertainment services.
Speaker 1: Yeah, it's interesting though, like those general entertainment services are
Speaker 1: starting to move more into the anime space. I mean,
Speaker 1: Netflix has for a long time been putting more animations
Speaker 1: on this platform. It feels like as that market continues
Speaker 1: to expand, you'll see more companies like Disney trying to
Speaker 1: get into that. You know, how do you see that
Speaker 1: is there an opportunity there with general entertainment services getting
Speaker 1: more into anime, is there an opportunity for you guys
Speaker 1: or is that just going to create more competition for titles.
Speaker 2: Yeah, look, there is definitely an interest to serve this
Speaker 2: fan base. As this fan base gross, general entertainment companies
Speaker 2: have worked hard to find content to serve them. So, yes,
Speaker 2: we compete for content with all of those players, but
Speaker 2: we think it is good for anime and anime community
Speaker 2: that these large services have anime content and make them
Speaker 2: available to large sets of audience. Right because if somebody
Speaker 2: gets introduced to anime and they want a deeper or
Speaker 2: a broader experience, then they come to a CERT's like
Speaker 2: crunch Role for that broader experience. So we believe it
Speaker 2: is actually good for anime and anime community that these
Speaker 2: services offer some anime and are introducing anime to fans.
Speaker 2: I think overall it is good and I think those
Speaker 2: fans that want that deeper experience will then come to crunturrole.
Speaker 2: We work with some of these general entertainment services. We've
Speaker 2: had we've licensed content to some of them. We've licensed
Speaker 2: content to linear channels like Cartoon Network because we know
Speaker 2: our fans are there, and if we can get them
Speaker 2: to experience a show or experience anime, then some of
Speaker 2: them will become anime fans and come to Crunch role. Yeah.
Speaker 1: I was going to ask about that because licensing TV
Speaker 1: shows is really back in vogue now. You know, you're
Speaker 1: seeing all these companies loan out more titles to Netflix. Obviously,
Speaker 1: Sony County Rule's parent never really stopped playing in that space.
Speaker 1: There's been a lot written about them as a kind
Speaker 1: of a content arms dealer. Do you see you guys
Speaker 1: expanding that strategy or how robust is that strategy for
Speaker 1: you guys already?
Speaker 2: Yeah, Like, like you said, it is back in work,
Speaker 2: but it is something that we've been doing for a
Speaker 2: long time, right. We want to we want to attract fans,
Speaker 2: meet fans where they are, and attract them into our
Speaker 2: ecosystem from that touch point. So we've been doing this
Speaker 2: for a while. Like I mentioned, we've licensed content to
Speaker 2: streaming services and OTT platforms as well as linear networks
Speaker 2: as well, because if as fans experience that anime, we
Speaker 2: know that they will come to us for a deeper experience.
Speaker 2: It continues to be a very strategic and intentional approach
Speaker 2: for us, We do look at how much content at
Speaker 2: what window and when to license and how that would
Speaker 2: then allow us to connect with a new group of
Speaker 2: fans and how to bring them back into our ecosystem.
Speaker 2: So it is a priority, is something that we do
Speaker 2: very intentionally in a strategic way.
Speaker 1: Yeah, what do you think of this trend of these
Speaker 1: live action adaptations of anime? I mean Netflix is really
Speaker 1: leaning into this. Their Cowboy Bebop adaptation was, shall we say,
Speaker 1: not a great success, but One Piece has really taken
Speaker 1: off for them.
Speaker 2: You know.
Speaker 1: Is is that another opportunity to just draw in more, more,
Speaker 1: more people into the anime tent. What do you think
Speaker 1: about that?
Speaker 2: Yeah, Like, look, anime has great, great stories, and I
Speaker 2: think live action is another great medium to bring those
Speaker 2: stories and to a much wider audience. So yeah, we
Speaker 2: think it's great that broader fan bases get to enjoy
Speaker 2: these stories in whatever format and so and it also
Speaker 2: helps anime. So we saw like when like you mentioned,
Speaker 2: Netflix released their One Piece live action, a lot of
Speaker 2: fans came to Country Roll to watch the One Piece anime. Right,
Speaker 2: and we know the popular the original series, the merchandise
Speaker 2: up One Piece all had a halo effect from that.
Speaker 2: So I think it's good for the IP, it's good
Speaker 2: for the ecosystem that these live action shows are made
Speaker 2: and not successful and enjoyed by fans.
Speaker 1: More from Corunchry Role President Rahul Parini. After this break,
Speaker 1: and we're back with Crunchy Role President Rahul Parini. We've
Speaker 1: touched on this a bit, but I'd just like to
Speaker 1: get a little bit more of your thoughts about you know,
Speaker 1: obviously it's a very challenging environment for streaming right now
Speaker 1: and for the media business at large. But you know,
Speaker 1: you guys have really had a big success story of
Speaker 1: the last couple of years. You know, you've expanded your
Speaker 1: subscriber base, you've expanded to different businesses. A Goldman Sachs
Speaker 1: analyst last year estimated that I believe by twenty twenty eight,
Speaker 1: crunchy Roll will account for thirty six percent of all
Speaker 1: profit at Sony's Picture segment, which is very impressive. You know,
Speaker 1: what do you attribute that success to and can you
Speaker 1: talk at all about you know, how profitable the business.
Speaker 2: Is As you said, like there's been the entertainment business
Speaker 2: has been going through a disruption for a while now.
Speaker 2: Between that and the pandemic, there have been a lot
Speaker 2: of external pressures. But one thing about anime is while
Speaker 2: we saw some disruption during the pandemic to the production
Speaker 2: side of anime, given that most of this production happens
Speaker 2: in Japan, the disruption wasn't for a long time and
Speaker 2: it wasn't very impactful, right Like, so shows continue to
Speaker 2: get produced, and on our side, we very quickly figured
Speaker 2: out how to continue to localize and dub shows even
Speaker 2: during the pandemic, So I think that was helpful. So
Speaker 2: we had content coming through even those through the pandemic
Speaker 2: period that we were able to make available to our fans.
Speaker 2: And during that time there was also adoption and move
Speaker 2: towards streaming a lot within within the audience and within consumers,
Speaker 2: and so those all all have helped the growth of
Speaker 2: anime in general, right But at the same time, I
Speaker 2: think to our discussion earlier, our approach or flywheel approach
Speaker 2: has helped us stay focused on this or serving this
Speaker 2: audience and continue to build deep, long relationships with them,
Speaker 2: and that has also helped helped our growth. So we
Speaker 2: just announced that we crossed thirteen million paying subscribers globally,
Speaker 2: and that has only that's been a strong growth for
Speaker 2: us last year. We are part of Sunny Pictures Entertainment.
Speaker 2: We don't release our financials separately, but I can tell
Speaker 2: tell you that we've been profitable and continue to be profitable.
Speaker 2: So and all of that is I think all based
Speaker 2: on our singular focus on serving this fan base and
Speaker 2: our differentiated flywheel strategy. Yeah.
Speaker 1: So speaking of that flywheel strategy, we focused a lot
Speaker 1: on streaming. But I don't want to neglect your theatrical business.
Speaker 1: You know, anime films have really formed one of the
Speaker 1: few consistent bright spots in the post COVID theatrical landscape.
Speaker 1: I know, his Funnimation was behind the Demon Slayer Moogan
Speaker 1: Train film, which was a big success story in twenty
Speaker 1: twenty one. You know, Boy and the Heron, which you
Speaker 1: guys didn't release, but that was, you know, a pretty
Speaker 1: big success story recently. Did you guys been for that film.
Speaker 2: By the way, Yeah, So The Boy and Hearn is
Speaker 2: a Jibili studios. It's a Miyazaki film film. We did
Speaker 2: actually release the movie in Australia because we had a relation.
Speaker 2: We have had a long relationship with Jibli Studios in Australia.
Speaker 2: But they have partner in other world, in other parts
Speaker 2: of the world that they work with and have worked
Speaker 2: with for a long time, so they continue to work
Speaker 2: with those partners in other regions.
Speaker 1: Yeah, yeah, I was just curious. But you know, I
Speaker 1: think we've talked a lot about how passionate the fan
Speaker 1: base is. Are there any other factors that you think
Speaker 1: you can attribute the success of anime films at the
Speaker 1: box office too?
Speaker 2: Yeah. Like I said earlier, fans love to watch their
Speaker 2: favorite shows and favorite characters on a big screen with
Speaker 2: their friends and with their family. It's an experience, it's
Speaker 2: an event for them. Anime it just looks. Those visuals
Speaker 2: look amazing on a big screen, and so I think
Speaker 2: that's a big part of it. The other part of
Speaker 2: it is, like you mentioned, there have been some amazing
Speaker 2: movies that have come out recently, whether it be from
Speaker 2: whether it be originals from Masters like Shinkai's Suzume or
Speaker 2: Mayazaki Is The Boy and the Hern but also from
Speaker 2: theatrical releases from major ip like Demon Slayer and so
Speaker 2: great movies an amazing experience on a big screen. Also,
Speaker 2: with our priority has been making these experiences, making them
Speaker 2: actually an experience and an event for fans, not just
Speaker 2: another movie at the theaters. Right has also made these
Speaker 2: something that are very attractive to fans. And finally, I
Speaker 2: would say like, look, we have long relationship with fans
Speaker 2: around the world. We have over one hundred and sixty
Speaker 2: million fans in our community that we have a very
Speaker 2: close relationship that we are talking to every day in
Speaker 2: social media and other various channels. So when we have
Speaker 2: these movies, we get to tell them directly that these
Speaker 2: movies are coming to theaters and encourage them to go
Speaker 2: watch these movies. That gives us an advantage, that gives
Speaker 2: the medium an advantage because we are able to tell
Speaker 2: a lot of people about these movies and help them
Speaker 2: go to the theaters and watch these movies. So all
Speaker 2: of those factors I think have helped in making anime
Speaker 2: movies as success at theaters. Like we have ten out
Speaker 2: of the top twenty anime releases in the U from
Speaker 2: a box office perspective our country, all releases, and I
Speaker 2: think all of those factors into why anime movies have
Speaker 2: been successful at theaters.
Speaker 1: Yeah, I know that with those theatrical releases, you guys
Speaker 1: have spearheaded releases in different territories different markets. Obviously, you've
Speaker 1: talked about the kind of infrastructure that you guys have
Speaker 1: in place to get shows subtitled and dubbed very quickly.
Speaker 1: Can you talk a little bit about what is that
Speaker 1: process of release, rolling out these films on a global basis?
Speaker 1: What does that look like. Do you guys oversee all
Speaker 1: that subtitling and dubbing.
Speaker 2: Yeah, so similar to what we do with TV shows.
Speaker 2: When we bring movies to theaters, we get our assets
Speaker 2: from our Japanese creators and we actually localize them, so
Speaker 2: we are subtitling them, we are dubbing them into all
Speaker 2: the different languages we have to we want to release,
Speaker 2: and getting the assets ready for a theatrical release. The
Speaker 2: other thing, as I mentioned, we are part of the
Speaker 2: Sony Pictures Entertainment. Sony Pictures, a major Hollywood studio, has
Speaker 2: been bringing movies to theaters for hundred plus years, so
Speaker 2: we have access to that experience, expertise, and infrastructure. So
Speaker 2: we are we partner with our Sony Pictures Entertainment colleagues
Speaker 2: to distribute these movies domestically and internationally, So we are
Speaker 2: leveraging the experience and the expertise they have to bring
Speaker 2: these movies to theaters, so that's an advantage. So that
Speaker 2: allows us to take these movies on a wider theatrical release,
Speaker 2: bring them to more theaters globally, bring them to a
Speaker 2: lot more large format screens globally, and a lot more
Speaker 2: countries than we can ourselves. So all of those are
Speaker 2: a priority for us, and we are leaning into bring
Speaker 2: more movies to more countries and more fans globally.
Speaker 1: Yeah. Yeah, we spoke earlier about, you know, disruption in
Speaker 1: the industry. Another big disruptor that you know everybody seems
Speaker 1: to be talking about constantly is AI. I'm curious to
Speaker 1: get your thoughts on what the potential impact of AI
Speaker 1: might be on the anime industry. I think, you know,
Speaker 1: it's easy to see applications for stuff like subtitling and
Speaker 1: dubbing and that kind of thing. Can you talk about
Speaker 1: what the impact of that might look like.
Speaker 2: Yeah, Like, like you said, AI is going to be
Speaker 2: a huge impact across the various industries. Our partners in
Speaker 2: Japan are experimenting and looking into what that means for
Speaker 2: anime production. But anime is a very is hand drawn still,
Speaker 2: and it's a very age old traditional creative process. So
Speaker 2: I'm sure there will be impact, but it is early
Speaker 2: days to understand what the impact would be on the
Speaker 2: production side of anime. Like you said, we are also
Speaker 2: looking to see what role AI could play in a
Speaker 2: lot of different worthless within our organization. Subtitling is an
Speaker 2: area where we've been experimenting and we think that there
Speaker 2: is a role for AI to play as we look
Speaker 2: at speech speech to text, so we think it could
Speaker 2: help us bring shows to fans quicker, bring in more languages. Again,
Speaker 2: like I said, we are in early experimentation. On the
Speaker 2: other side, on the dubbing side, I think that the
Speaker 2: AI technology, we don't believe the air technology is there
Speaker 2: yet in terms of being able to put into dubbing,
Speaker 2: because the dubbing process itself is a very creative process.
Speaker 2: Given that it is we're not just translating and dubbing,
Speaker 2: we're adapting the script because you have to localize for
Speaker 2: the local culture, local humor, you have to synchronize the
Speaker 2: lip laps to the language because we don't get to
Speaker 2: go back and reanimate the shows. So again, we don't
Speaker 2: think the technology is there yet, but we're also experimenting
Speaker 2: with AI in other ways. As I mentioned earlier. Discovery
Speaker 2: is a big issue, just as much in anime as
Speaker 2: it is in other general entertainment shows. There is a
Speaker 2: lot of content and trying to connect audience with the
Speaker 2: right content that they would like to watch at the
Speaker 2: right time is a big is an important priority for us,
Speaker 2: and we believe AI and generative AI could play a role,
Speaker 2: so we're testing and experimenting there as well.
Speaker 1: Yeah, just quickly, I'd like to talk just a little
Speaker 1: bit more about and again this is something we've kind
Speaker 1: of touched on, but just other expansion opportunities that you
Speaker 1: see for the larger Crunchy Roll Flywheel.
Speaker 2: Yeah, like I said, sword and theatrical our big touch
Speaker 2: points with our fans and they continue to grow for us.
Speaker 2: But we are serving fans in various other ways that
Speaker 2: they like to exhibit their anime fandom. An example would
Speaker 2: be games. There's anime fans love to play games. There
Speaker 2: is a huge overlap between the gaming audience and the
Speaker 2: anime audience, so we are bringing anime games to our
Speaker 2: fans globally. We just launched our new free to play
Speaker 2: game one punch Man World, last week, but we also
Speaker 2: announced late last year launching a new subscription benefit for
Speaker 2: our subscribers called Crunchy Role Game Volt where we make
Speaker 2: free to play games available for our subscribers of our
Speaker 2: Mega and Ultimate here. So that's another important priority. We
Speaker 2: want to make sure that we are bringing amazing games
Speaker 2: for our fans across the board. We also, like I said,
Speaker 2: e commerce is a priority. Uh. Fans love to show
Speaker 2: their fandom by collecting memorabilia, figures, or apparel that they
Speaker 2: can wear and show off their fandom, and so we're
Speaker 2: continuing to grow our e commerce reach both here in
Speaker 2: US and also internationally. Events is another big thing. Fans
Speaker 2: like to gather in a place and celebrate their fandom,
Speaker 2: meet other fans, learn about new shows coming, meet creators
Speaker 2: from Japan. So we are going to be attending and
Speaker 2: meeting fans at more events globally. We are also bringing
Speaker 2: an Countyl Anime Award to Tokyo again this year that
Speaker 2: will be on March second. That is a way for
Speaker 2: us to be able to connect anime fans globally with
Speaker 2: creators in Japan. And I love anime fans to recognize
Speaker 2: and celebrate their favorite shows from the past year. So yeah, again,
Speaker 2: various touch points across the Flywheel that we believe are
Speaker 2: going to be important for fans, and we're continuing to
Speaker 2: invest and grow those channels.
Speaker 1: Yeah, I know, Studio Ghibli opened a theme park in
Speaker 1: Japan a few years ago. Is that our theme parks
Speaker 1: anything you guys are thinking about at all?
Speaker 2: We don't have theme parks, but some of our IP
Speaker 2: are at theme parks, So we're always looking at opportunities
Speaker 2: where we can take some of the IP that's popular
Speaker 2: at country Hall and make them available for fans to
Speaker 2: enjoy at theme parks worldwide. Cool.
Speaker 1: One final fun question for any of our listeners who
Speaker 1: may be looking to get into anime, can you recommend
Speaker 1: maybe two or three titles that they might enjoy just
Speaker 1: as a starting point.
Speaker 2: Yeah. Like I said, there is a show for every fan.
Speaker 2: If you like certain shows in general entertainment, I'm sure
Speaker 2: there are shows that you will enjoy in an anime
Speaker 2: that are similar or similar of genres. Just to suggest
Speaker 2: a show, for example, there is a show that I'm
Speaker 2: watching right now that is really popular with fans that
Speaker 2: is started in January. It's a show called Solo Leveling.
Speaker 2: It's based on a Korean manva that we are actually
Speaker 2: producing with our Sonique colleagues and a production company an Applex.
Speaker 2: It's a it's a really it's a really well made show.
Speaker 2: It's really cool. It's about five episodes, and I would
Speaker 2: highly recommend that show for anybody that wants to get
Speaker 2: into anime. Great visuals, great stories. But again, there are
Speaker 2: a lot of other shows you mentioned. Demon Slayer, Demonslayer
Speaker 2: is a is an amazing show. In new season from
Speaker 2: Demon Slayer is going to be out soon, so I
Speaker 2: would highly recommend fans go catch up on the previous shows,
Speaker 2: previous seasons of Demon's Layer. Yeah, and a lot of
Speaker 2: some classics, so your Dragonball, dragon Ball Z, One Piece,
Speaker 2: Cowboy Bebop or some of the classics that I watched
Speaker 2: when I was young and getting into anime originally and
Speaker 2: still are some of my favorite shows.
Speaker 1: Great. Thank you so much for joining us today.
Speaker 2: Thank you Tyler again, thank you for having time. I
Speaker 2: really enjoyed this.
Speaker 1: Thanks for listening. Be sure to leave us a review
Speaker 1: at Apple Podcasts or Amazon Music. We love to hear
Speaker 1: from listeners. Please go to Variety dot com and sign
Speaker 1: up for our free weekly strictly business newsletter, and don't
Speaker 1: forget to tune in next week. For another episode of
Speaker 1: Strictly Business