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.
February 27th, 2008 at 5:15 pm | Permalink
[…] Deep Jive Interests placed an observative post today on VCâs Back Crunchyroll: Guts? Brains? Or Sheer Stupidity?Here’s a quick excerpt […]
February 27th, 2008 at 9:10 pm | Permalink
[…] Francisco based Crunchyroll, a sort of YouTube for anime and other mostly Asian video content, raised a $4 million round of financing led by Venrock Associates. The company, which launched in the […]
February 27th, 2008 at 10:34 pm | Permalink
[…] Francisco based Crunchyroll, a sort of YouTube for anime and other mostly Asian video content, raised a $4 million round of financing led by Venrock Associates, with partner David Siminoff joining the […]
February 27th, 2008 at 11:11 pm | Permalink
btw tony - perhaps the vc wants in because they want to be acquired before the lawsuits that you and mike mention :)
February 27th, 2008 at 11:15 pm | Permalink
@Allen — entirely possible … which of course begs the question, who would want to acquire such a property knowing that these users would likely fly away faster than a mac zealot from a PC once all the copyright material was taken down; or which is likely going to be the target of torrent of lawsuits / DMCA takedowns?
Or maybe there’s something that we’re all missing? :)
Cheers
t @ dji
February 27th, 2008 at 11:28 pm | Permalink
what about the community?
February 27th, 2008 at 11:46 pm | Permalink
@Allen — my money’s on the community disappearing if the videos start disappearing en masse.
February 28th, 2008 at 12:24 am | Permalink
[…] Deep Jive Interests placed an observative post today on VCâs Back Crunchyroll: Guts? Brains? Or Sheer Stupidity?Here’s a quick excerpt […]
February 28th, 2008 at 2:00 am | Permalink
[…] サンフランシスコを本拠地とするCrunchyrollは、アニメや主としてアジアのビデオコンテンツを対象としたYouTubeのようなものだ。そのCrunchyrollがVenrock Associatesの指揮の下、パートナーのDavid Siminoffが取締役会に参加する形で$4M（400万ドル）の資金調達ラウンドを完了した。CrunchyrollはHotOrNotの3人の従業員によって設立され、2006年夏にローンチした。我々の情報源によれば、HotOrNot設立者のJim HongとJames Youngもラウンドに参加したのだという。 […]
February 28th, 2008 at 5:33 am | Permalink
[…] unclear is how long CrunchyRoll can sustain their roll. Tony Hung pegs their monthly income at around $75k a month, which may not be adequate justification for a $4M funding round. […]
February 28th, 2008 at 5:55 am | Permalink
[…] unclear is how long CrunchyRoll can sustain their roll. Tony Hung pegs their monthly income at around $75k a month, which may not be adequate justification for a $4M funding round. […]
February 28th, 2008 at 6:05 am | Permalink
[…] unclear is how long CrunchyRoll can sustain their roll. Tony Hung pegs their monthly income at around $75k a month, which may not be adequate justification for a $4M funding round. […]
February 28th, 2008 at 10:08 am | Permalink
[…] unclear is how long CrunchyRoll can sustain their roll. Tony Hung pegs their monthly income at around $75k a month, which may not be adequate justification for a $4M funding round. […]
February 28th, 2008 at 11:11 am | Permalink
[…] unclear is how long CrunchyRoll can sustain their roll. Tony Hung pegs their monthly income at around $75k a month, which may not be adequate justification for a $4M funding round. […]
February 28th, 2008 at 2:47 pm | Permalink
[…] A funding led by David Siminoff at Venrock, according to peHUB. Deep Jive Interests and others complain that the site was built on copyrighted content. Last week the company took down the advertising […]
February 28th, 2008 at 2:55 pm | Permalink
[…] Francisco based Crunchyroll, a sort of YouTube for anime and other mostly Asian video content, raised a $4 million round of financing led by Venrock Associates, with partner David Siminoff joining the […]
February 28th, 2008 at 3:54 pm | Permalink
[…] unclear is how long CrunchyRoll can sustain their roll. Tony Hung pegs their monthly income at around $75k a month, which may not be adequate justification for a $4M funding round. […]
February 28th, 2008 at 4:38 pm | Permalink
[…] Deep Jive Interests wrote an interesting post today on VCâs Back Crunchyroll: Guts? Brains? Or Sheer Stupidity?Here’s a quick excerpt 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 […]
February 28th, 2008 at 7:03 pm | Permalink
[…] Tony Hung / Deep Jive Interests: VC’s Back Crunchyroll: Guts? Brains? Or Sheer Stupidity? […]
February 29th, 2008 at 8:23 am | Permalink
[…] Francisco based Crunchyroll, a sort of YouTube for anime and other mostly Asian video content, raised a $4 million round of financing led by Venrock Associates, with partner David Siminoff joining the […]
February 29th, 2008 at 1:15 pm | Permalink
[…] Francisco based Crunchyroll, a sort of YouTube for anime and other mostly Asian video content, raised a $4 million round of financing led by Venrock Associates, with partner David Siminoff joining the […]
February 29th, 2008 at 5:09 pm | Permalink
[…] San Francisco based Crunchyroll, a sort of YouTube for anime and other mostly Asian video content, raised a $4 million round of financing led by Venrock Associates, with partner David Siminoff joining the […]
March 10th, 2008 at 7:08 am | Permalink
[…] to their profile and access to higher quality video streams. While others feel CrunchyRoll is in violation of copyright & using of the DMCA unfairly, Crunchyroll does strictly comply by removing a large amount of […]
March 11th, 2008 at 11:29 am | Permalink
[…] of the situation is a good thing. A post by a fansubber on their forums notes that a youtube clone has gained 4.05 million dollars in venture capital off of the traffic gained by hosting illegal […]
March 11th, 2008 at 9:38 pm | Permalink
[…] series) got VC funding from Venrock about two weeks ago to the tune of 4 million dollars, which was a contentious position, I asserted, because the vast majority of its content was, and continues to be, copyrighted — hosting the […]
March 11th, 2008 at 10:58 pm | Permalink
From what I understand, most of Crunchyroll’s content is SUBBED, not dubbed. Subbing, short for “subtitling”, means there are English text translations, but the original Japanese audio. Dubbing means replacing the original voice track with English voiceovers. Pretty much no fan groups do that these days. If Crunchyroll has any dubbed content, it is probably ripped directly off of the North American DVD releases, and I doubt even they are that bold.
March 11th, 2008 at 11:39 pm | Permalink
[…] to write about the CrunchyRoll $4.05 million venture capital round last month. The good doctor Tony Hung took a look at CrunchyRoll and went deep into the copyright and believes that CrunchyRoll is a "legal […]
March 12th, 2008 at 12:00 am | Permalink
[…] to write about the CrunchyRoll $4.05 million venture capital round last month. The good doctor Tony Hung took a look at CrunchyRoll and went deep into the copyright and believes that CrunchyRoll is a "legal […]
March 12th, 2008 at 2:10 pm | Permalink
@Elwen — Woah … hold your horses. Thanks for noticing, and its been corrected. Not “reminding” per se, as I actually *do* know the difference, but its one of those things that I misspelled on the way to rushing out the post.
Tony.
March 13th, 2008 at 11:05 pm | Permalink
[…] Deep Jive Interests Trackback | RSS 2.0 de los comentarios | Escrito por Yui-Ikari | […]
March 21st, 2008 at 10:33 am | Permalink
[…] their funding announcement last month and the discussion about copyright issues earlier this month. Tony Hung had a good overview of the copyright issue with regards to […]
May 6th, 2008 at 11:51 am | Permalink
Those guys are smart. They knew what legal issues they were getting into, they knew what they had to get out of it, and from what you’ve said so far, it looks like they’re right on track. I don’t doubt that they have a plan.
Also, what’s with the redundant commenting? I had to scroll down for a while before I found this box.
May 6th, 2008 at 11:52 am | Permalink
Sorry, I meant, “they knew what they had TO DO to get out of it”.