Deep Jive Interests

Crunchyroll. You might vaguely remember some noise around this video-streaming site (let’s call it a YouTube clone) that hosts largely japanese “cartoons”, or anime, as its also known, as it got some coverage by TechCrunch and Venturebeat a few months ago. The noise was around the fact that it was generating bongo traffic, some unconfirmed revenue ($75k/ mo), and remarked by me somewhat snarkily, almost all on pirated material (more on that in a second).

Fast forward to 2008, and lo and behold, it looks like some VC’s are either gutsy, brainy, or just plain ol’ “I’ve got money burning a hole in my pants, and I’ve got to spend it somewhere” (also known as “stupid”), as Crunchyroll has got its first round of funding, courtesy of Venrock, to the tune of just over $4 million dollars, as reported quietly by the Private Equity Hub.

So, back to where I see the controversy: Crunchyroll’s content — the popular stuff — is almost all totally copyrighted material … *somewhere*. We’re talking popular (and less so) anime, full reel stuff, if its found in separate parts, almost always dubbed subbed (that is, “subtitled”) for English speaking audience. There’s also Asian movies by the bundle, Chinese, Korean, and Japanese (and probably more), all dubbed subbed for your easy perusal. The way that Crunchyroll makes its cash is through a membership fee, as you can pay to watch a higher quality streaming video.

And let’s give credit where its due: they will happily take down material *if* the copyright owners send in all the right DMCA paperwork. Furthermore, there are smaller sections (that’s probably growing) that are focused on user-generated videos (music videos, and videos of people with their riced up cars, for example).

So why was I all agog with this announcement?

Only that it seems like Crunchyroll’s success lies *soley* with its ability to stream copyrighted material that anime-obssessed otaku are overjoyed to watch — for free — without downloading. That a fraction of their this bunch is happy to buy a membership so that they can share in higher quality streaming seems to be an *extremely* dubious model to me, simply because its all hinging on the hope that the original owners of said copyright are *not* going to throw DMCA letters to take down all this material.

The “this is so stupid, I can’t believe how stupidly stupid this is” part of the argument probably carries on by saying that once companies across the Pacific Ocean *do* hear that Crunchyroll has funding, all it creates is a giant sign that says “we’re big enough so that you can now send your lawyers after us!” I guess that there are some VCs who are confident that, just like Google, there are some video-streaming sites that are just worth fighting for (but probably, unlike Google, don’t have the warchest to fund said legal fight).

But that brings me to the gutsy and or brainy part of it. Maybe there’s some part of the plan that we don’t yet know about; perhaps Crunchyroll has made a number of partnerships behind the scenes to stream a ton of copyrighted material. Who knows? Or maybe the minds behind Crunchyroll have some awesome way of maintaining members and viewership up even when the proverbial Golden Goose has been sued into submission (it looks like a classic figure four leg-lock, if you must know).

Hey, anything’s possible, I guess.

But I’m really hoping that their business plan *doesn’t* involve a lot of praying and hoping that the original copyright holders *don’t* DMCA the hell out of Crunchyroll, so that Otaku all over the world can watch their J-drama’s and anime gratis.