Every month, we will highlight a chat with a local tech entrepreneur. This month, Brandon sat down with Kun Gao of Crunchyroll at their SF Headquarters to chat about Cruchyroll and their direction. Those who are unfamiliar with Crunchyroll, they are an online video website for people worldwide to view Asian entertainment.
Brandon: Tell us a little about Crunchyroll?
Kun Gao:Crunchyroll is a American online entertainment brand focused on Asian Entertainment including anime, drama, and music. Crunchyroll works with Asian broadcasters and focus on Japanese content. All content is licensed and is streamed at the same time TV broadcasters are showing it.
Our viewers can watch from different sources like desktops, laptops, iPhones, iPads, or set-top boxes. Overall, it is a community of people who have similar interests for this Asian content and for this type of lifestyle. We have four social networks for people to interact.
Brandon:I have read several articles about Crunchyroll in Japan, what is your business model?
Kun Gao: Well, we started as a community website for individuals that were into Asian content. We received investment from Venrock in 2008. They saw that the audience was really passionate and they saw there was a void of bringing Asian content to the rest of the world. Once Venrock invested in us, we started to build out the company and set-up an office in Japan.
Beginning in 2009, we started the business side of the company. We are 100% completely licensed and we have only 100% licensed content on our site. We recently had small strategic investments from some of the largest broadcasters, like TV Tokyo and content distributor/publishers, like bitway Co., Ltd. – a subsidiary of Toppan Ltd.
Brandon: Last week we attended the New People cultural entertainment center’s screen showing of Makoto Shinkai‘s 5 Centimeters Per Second film. How was that for Crunchyroll?
Kun Gao: We had a great turnout. We took advantage of New People’s week long event- J-Pop Summit. This movie was the first movie we licensed for DVD distribution. We felt this was a very artistic title. Crunchyroll normally doesn’t focus on DVD distribution but digital distribution.
It (5 Centimeters Per Second) presented an unique opportunity, we screened that event in order to promote the DVD distribution here in North America that will be coming out sometimes this month or next month.
Brandon: So does it makes sense these days to sell DVDs?
Kun Gao: I think it does. It really is two different businesses. What we focus on is access. We provide our users with access to the content. We want to make sure Crunchyroll is where our users are. Our platform is agnostic as it plays on whether it is an iPhone, Android or any other device. DVDs are really for people who want to collect, it is about owning a physical item.
Brandon: A lot of Asian releases here in the US is maybe 2 or even 3 years old. What do you feel about the freshness of the content?
Kun Gao: We really feel that Cruchyroll’s core value proposition is the freshness of content. We focus on streaming the content the same time that it is being broadcasted on TV. People have a lot of options, not just for Asian content but other content, so it really matters how fresh it is. Otherwise, people will turn to the latest content somewhere else.
Brandon:What is your opinion of Nico-Nico Douga? What do you feel in the way they use social on their site?
Kun Gao: I feel they have a unique model that people can chat directly on the screen. Seems to work well with the Japanese audience. There are a lot of social models. For professional content people just want to watch without interruption, for other content that is more social, more off the wall, I feel that people do want to participate.
Brandon: What is your revenue model?
Kun Gao: Our model is diverse. Standard content is available for free and supported by advertising. But, if you want higher quality content and early access, we offer a subscription service similar to that of cable. We also offer merchandising and virtual goods and daily deals for anime and Asian content products that match our demographics lifestyle.
Brandon: What is Crunchyroll’s business expansion plans?
Kun Gao: We have plans to expand the business worldwide by the end of the year. We are looking for partners in areas like South America and Europe to bring Asian content to those markets. We plan on localizing our site in different languages by the end of the year.
We would like to thank Kun Gao and Michelle Hwang of Crunchyroll for their time and an opportunity to talk about their unique and fun company. They are a great neighbor to have in San Francisco.