Crunchyroll Is Thriving Thanks to Gen Z and Appointment Anime Viewing, COO Says

At a time when Gen Z viewership and appointment viewing is in decline for most of television, Crunchyroll is bucking some of the most common negative TV trends.

“What we actually have seen that anime has done is bring back appointment viewing,” Gita Rebbapragada, chief operating officer for Crunchyroll, told TheWrap at the Television Critics Association’s 2024 summer tour. “[Anime is] actually very correlated to the Japanese broadcast schedule, so we’ll see appointment viewing for an episode of an anime that is super exciting and highly anticipated.”

After noticing this viewership pattern, Crunchyroll decided to experiment. Typically, the streamer airs new episodes “pretty close” to that show’s Japanese broadcast debut. But when it came to the April premiere of the popular anime adaptation of Naoya Matsumoto’s “Kaiju No. 8,” Crunchyroll streamed new episodes live every week worldwide at the exact same time as its broadcast in Japan. The live stream was available in Japanese, with subtitle options in English, Latin American Spanish, Portuguese, German and French.

As more episodes of the series aired from April to late June, Rebbapragada noted viewership numbers increased. That has led the Crunchyroll team to experiment with more premieres in tune with the Japanese broadcast. “The new shows are appointment viewing. The catalog does get binged,” Rebbapragada said.

Many of the subscribers who tune into Crunchyroll are exactly the younger demographic that most traditional TV platforms are struggling to capture. During Rebbapragada’s TCA presentation, the COO explained that the average anime fan tends to skew younger, and that Gen Z and even Gen Alpha “over-index” when it comes to watching anime. According to a poll conducted by Polygon, 42% of Gen Z and 25% of Millennials regularly watch anime. That same poll found that 58% of Gen Z anime fans watch this content on Crunchyroll, and in February, the streamer’s president, Rahul Purini, confirmed that Gen Z watches the platform “more so than any other demographic.”

Having this younger audience has allowed Rebbapragada to observe several viewership trends, some expected and others less so. On the expected side is the importance of mobile and offline viewing. What’s more surprising is how new fans are entering anime these days. From video games to Netflix and Cartoon Network, Rebbapragada noted there are “more entry points” than ever to become an anime fan. Another surprising trend has to do with the popularity of in-person events.

“This is not going to be rocket science to anyone, but what’s been super interesting to me is how the in-person experience, the demand for that has gone up after COVID,” Rebbapragada said. Because of that interest, Crunchyroll has pushed to do more events around the world, including San Diego Comic Con this weekend. “We try to engage fans in real life.”

Speaking of COVID, those years spent in lockdown may have helped anime break from niche to mainstream. “The way I characterize COVID is that it accelerated trends we were already seeing,” Rebbapragada said. “I think what we haven’t seen is it decelerate.”

Crunchyroll currently has 14 million monthly paid subscribers, which is nearly three times the subscribers the platform had in 2021. This sharp increase is all post-COVID growth.

This accelerated interest in anime can already be seen in certain areas of American television. Netflix’s live-action adaptation of “One Piece” scored 18.5 million views and a total of 140 million hours in its first week. It also ranked as the most-watched series in Netflix’s six-month report, which chronicled the back half of 2023. Adult Swim’s mega hit “Rick and Morty” is also poised to enter the anime world in the coming weeks with “Rick and Morty: The Anime,” a new series from “Tower of God” director Takashi Sano.

When asked if Crunchyroll ever sees a viewership bump from anime-related hits on other networks or streamers, Rebbapragada confirmed that there is a “correlation.”

“Netflix has a massive platform, and more people watch live-action than animation. So between those two things, a lot more people got exposed to the franchise,” Rebbapragada said of “One Piece.” “It’s not just Crunchyroll that benefits from that. ‘One Piece’ merch sales went up more. There was more streaming of the original ‘One Piece’ series. We have it on our platform, but others do too. So all boats rise when a franchise has a big moment.”

“That’s why we think it’s a sustainable ecosystem. We’re just trying to build great franchises, regardless, for the industry and not just necessarily for us,” Rebbapragada added.

When it comes to expanding these franchises, Rebbapragada emphasized that finding content that will resonate with the Crunchyroll audience is of the upmost importance. “Our strategy is if we think our fans will love it, we want to bring it to them. That has led us to get to 45 to 55 shows,” Rebbapragada said, referring to the number of new and existing shows the service adds to its library every season.

This understanding of how their core consumer operates has led to a product that’s unlike other streamers on the market. In addition to simulcasts and the streamer’s library of content, the service also offers subscribers anime games through its Crunchyroll Game Vault. And knowing that many anime fans like to express their fandom through merchandise has led to the Crunchyroll ecommerce store in the U.S. and now Europe. Subscribers to the streamer get a discount to the store. It’s a model that allows someone to discover a new show, experience that show through a mobile game and buy a T-shirt with one of their now-favorite characters on it — all without leaving the Crunchyroll ecosystem.

Knowing that their core audience likes to express themselves trough their fandom as well as their interest in gaming has also led to the Crunchyroll team thinking about some of their acquisitions in a broader sense. “We are very committed to our flywheel model, so we’re always exploring,” Rebbapragada said. “If you love a character in a show that we have, the merch, we can engage with games, we can get it on a film, that is our aspiration.”

As this small but mighty streamer looks to the future, Rebbapragada noted that the team is “really optimistic” and “excited” about the next few years. Specifically, she pointed to the streamer’s international growth and increased diversity as a reason for that feeling.

“We’re just excited that anime is on this clip, that it’s getting so much recognition, not just Oscars and Golden Globes, but reviews. There’s just so much positive momentum,” Rebbapragada said.

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