Anime Streaming Payments: Crunchyroll vs. Netflix

In response to the requests of Japanese anime production companies for enhanced revenue from overseas distribution rights, Crunchyroll CEO Rahul Purini emphasized the establishment of a “sustainable anime ecosystem” where success is shared with fans and creators. Purini outlined Crunchyroll’s payment approach, which comprises a guaranteed minimum amount and a revenue share. This model ensures creators receive a guaranteed minimum, while offering an unlimited upside in the event of a show’s success, enabling creators to invest in and produce hit shows. Crunchyroll leverages its extensive experience, merchandising initiatives, data access, and strategic relationships to monetize anime and facilitate long-term royalty returns.

In contrast, Netflix primarily employs upfront fixed-fee agreements when licensing content. Netflix co-CEO Ted Sarandos expressed preference for this model, stating that it benefits creators by assuming financial risks, allowing them to concentrate on production, while enabling Netflix to attract talent. Sarandos indicated that Netflix is not considering altering this structure, although bespoke deals are feasible but rarely selected by talent.

However, the Association of Japanese Animations (AJA), representing prominent studios, highlighted several drawbacks of flat fees in a submission to Japan’s Agency for Cultural Affairs. The AJA noted that even acclaimed anime receive no additional funding from flat fees and frequently lack adequate marketing data, such as viewer demographics. This structure impedes royalty audits and diminishes leverage for negotiating higher fees or determining the future of seasons. While Netflix does share creative feedback and data analysis on aspects like audience drop-off points, they do not provide detailed personal data, such as nationality or age. Despite Crunchyroll’s revenue-sharing model being associated with increased transparency, a report cited alleged Japanese industry employees claiming that Crunchyroll provided unreliable sales data.

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