How does your business work?
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Posted 5/1/11
Although I am a new member, I'm already extremely impressed by the business model this website implements, and I firmly believe that you guys are revolutionizing the entire content distribution paradigm. Out of curiosity, I was wondering about some of the logistical aspects of this site.

I know that revenue is split with the content providers, but how is this amount decided upon? Is it based on how many shows you license? The number of viewers per show?

Where does the majority of revenue come from, advertisement or subscription fees?

How did you guys ever convince content providers to give you episodes before they air in Japan? Do they make a considerable amount from this website? Do anime production companies take the profits they gain from web distribution seriously, or do they just consider it icing on the cake?

I know that you guys wrestle with licensing terms for shows that are already being distributed by other North American distributors like Viz. You have to pay both the content creators and the distributors for doing localizations. Is this an ideal arrangement for CR? Or would you prefer to just work with the content creators directly, doing all the translations in-house? Do these other distribution companies see CR as a threat or a partner to their business?

Of course I understand that some of these questions cannot be answered. I appreciate the thought nonetheless. I apologize in advance for any mistakes in the assumptions of the questions posed, and will be happy to be corrected. I truly admire the determination and ambition of the staff at CR, and I can only wish that this site will continue expanding its library and user base.

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Posted 5/8/11
One week bump.
Ronin
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Posted 5/9/11
It took a lot of negotiating and demoing of our services to start simulcasting Anime. Amount distributed is negotiated with each Publisher but at least 50% goes back to the Publisher. Lately I believe we've been able to pay money up front for licenses, on top of revenue sharing based on minutes viewed, since our company has become more lucrative. Majority of revenue comes from paid subscriptions. Profits gained from web distribution used to just be the icing but is becoming a more serious way of gaining additional revenue. Eventually the tide will turn where web streaming becomes more lucrative than physical and televised media.

We would like to do as many things as we can in-house or through contractors we directly pay for the work. So we would like to do localizations through the people we directly pay and do this for most of the shows. Naturally shows that have or are already being localized are out of our hands.

That's about all I know or can talk about.
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Posted 5/9/11
Well the ad's around the site will support the free service for streaming videos, you've no doubt seen ads within the anime itself right? (Only non-premium members see them however) Anyway the money generated by specific ads will go right to the developers of the anime that ad was displayed on and CR most likely gets a cut of it as well.

For premium services it's a little trickier since there are multiple ways of distributing the money, for example the amount of views a video gets or the amount of episodes.
It's not impossible for CR to monitor how long each user spends on the site and what is being watched the most/least, using that information they can have a variety of different methods to keep developers happy and bring in new ones.

You know the dozens of anime streaming sites around that get new episodes within hours or release right? The anime-developers get nothing for it of course considering it's all done illegally.
CR is a way of fighting back against those sites because anime-developers get the money they deserve.
Put yourself in the big boss shoes and your losing money because your anime is getting spread around the internet for free, what would you do?
You can't stop piracy but you can beat others to it.

If other sites got the anime before CR then people would simply go somewhere else for obvious reasons and you'd be losing money.
CR is an easy option for anime developers to get money from all around the world without going through specific country laws (CR deals with that) and so on.

Hope I didn't bore you with all the text and I may no nothing about how CR actually works but it's just the same as any other business in the end. An hey, I could still be wrong :p
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Posted 5/11/11 , edited 5/11/11

BasouKazuma wrote:

It took a lot of negotiating and demoing of our services to start simulcasting Anime. Amount distributed is negotiated with each Publisher but at least 50% goes back to the Publisher. Lately I believe we've been able to pay money up front for licenses, on top of revenue sharing based on minutes viewed, since our company has become more lucrative. Majority of revenue comes from paid subscriptions. Profits gained from web distribution used to just be the icing but is becoming a more serious way of gaining additional revenue. Eventually the tide will turn where web streaming becomes more lucrative than physical and televised media.

We would like to do as many things as we can in-house or through contractors we directly pay for the work. So we would like to do localizations through the people we directly pay and do this for most of the shows. Naturally shows that have or are already being localized are out of our hands.

That's about all I know or can talk about.


Thank you very much for the thorough reply. That was exactly what I wanted to know. I'm particularly encouraged by the fact that studios are beginning to view web distribution as a viable revenue source. I hope CR can grow even larger and, as you say, become more lucrative than physical and televised media.
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Posted 5/11/11
Is it possible for CR to obtain uncensored versions of the shows from the developers that premium members could have access too? Is this something CR hopes to pursue?
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