UlasanAnime.com – An article discussing the financial implications of illegal streaming for the anime industry presents a viewpoint that is both inaccurate and surprisingly close to the truth.
Based on information from an article, the minimum guarantee for streaming a series is approximately $1000-$2000 per episode. However, the question arises whether a show like “Sakura Trick” on Crunchyroll garnered a million viewers. Using ratings as a proxy for video views, “Sakura Trick” had about 750 ratings for its first episode, a stark contrast to “Naruto Shippuden” with over 48,000 ratings. If we assume only 0.1% of Crunchyroll’s viewers watched “Sakura Trick,” and considering Crunchyroll has 20 million users, this translates to roughly 20,000 viewers. If the aforementioned article’s figures are accurate, at 7 cents per episode, “Sakura Trick” would have only generated $1400 per episode. It’s probable that “Sakura Trick” did not command a $2000 per episode guarantee, but it’s evident that Crunchyroll likely isn’t making substantial profits from this show if its costs approximate the minimum guarantee.
The mathematical approach in that article is convoluted and logically flawed. It conflates worldwide viewership with US pricing and relies on estimates from a 2013 Netflix press release, which itself is derived from even more questionable data. While the initial links may not be directly referenced, the core issue is the disregard for geographical distinctions, as the Netflix figures cited were primarily for the US and Canada.
The ballpark estimation, however, is conducted in a manner that adheres to the principles of such estimations. Similar to interview questions that require order-of-magnitude guesses (e.g., “how many grains of sand are in a playground sandbox?”), the aim is to make a reasonable approximation without precise specifics. The inherent problem with this approach is that an incorrect guess can significantly distort perceptions within a business operating on very thin margins.
To truly understand the impact of illegal streaming, it’s crucial to consider the following questions:
- Are illegal streams being accessed in regions where legal alternatives are unavailable? For “Sakura Trick,” the answer is likely yes.
- Does displacement occur if a Crunchyroll subscriber opts for an illegal stream of content also available on Crunchyroll? This mirrors the “download but buy” scenario and is likely not a common occurrence.
- For ad-driven revenue models, revenue is generated from served advertisements. Wouldn’t it be more logical to calculate displacement based on ad revenue rather than Netflix’s licensing fees?
- For subscription-driven models, how can displacement be accurately calculated?
The marginal cost of the streaming service can likely be disregarded, although there is a cost associated with meeting demand, which brings to mind the performance of services like FunimationNow.
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If displacement is estimated based on the subscription model, and assuming an average Crunchyroll viewer watches 20 episodes per month at $7, this equates to 35 cents per episode. Alternatively, using the same press release figures, 1.5 billion minutes per month translates to approximately 62.5 million 24-minute episodes. Assuming both subscription and free users have similar viewing habits on average, this suggests about 3.125 episodes per month. This calculation can inflate the displacement value significantly, potentially up to $2.24 USD.
While the article arrives at a price point close to reality, it fails to adequately calculate the cost of streaming piracy. Let’s briefly address point #3 using Daisuki as an example.
The specific video ad platform used by Daisuki is unknown, but assuming a 50% cut for a platform like Google, with a CPM of $5, Daisuki might earn around $2.5 per a certain number of videos. Given the localized and less varied ads on their platform, their rates could be favorable. Using Google’s rates, which range from $1 to $20 per 1000 views, let’s assume $10/1000 views, with ads appearing three times per episode, resulting in 3 cents per episode. This translates to $30,000 per episode for one million views of displacement. Naturally, CPM rates are region-specific, making precise calculations difficult.
This figure seems more reasonable. The idea of one million views for a single episode of “Sakura Trick” is quite a lot. While this could be applied to a show like “One Piece,” potentially adding another zero or two, it enters the realm of “reaping where you have not sown.”
Regarding regional differences, the ratio to “Shippuden” based on series ratings is a reliable method for comparison within the same service. “Sakura Trick” on Crunchyroll is restricted to the US/Canada, which is factored into the lower viewership numbers due to regional limitations. This cannot be said for CPM calculations, making displacement estimation considerably harder without country-specific data for all pirated streams. The core issue is that calculating displacement based on a subscription model is illogical, yet it’s the direction most streaming services are heading.
PS. The most pertinent way to assess piracy in streaming is by examining the break-even point for pageviews. If the minimum guarantee is $1000 per episode, and a 12-episode series receives one million total views, costing $12,000 and generating, say, $30,000, then a viewership of nearly 100,000 for “Sakura Trick” would be a clear win. Compared to actual TV ratings, this is a substantial audience (approximately 0.1 of a rating). However, if only 3333 people watched “Sakura Trick” to completion, roughly one-thirtieth of the total viewers, that would be the break-even point. This is not an unrealistic number for a niche, streaming-only title in the USA. In terms of DVD/BD sales, selling 1000 units is considered successful, so if one in three viewers watched the simulcast, it’s worth considering. As always, regional breakdowns complicate concrete analysis, but if we view global distribution as a single entity and the ad market can support it (a significant “if”), there is potential for revenue generation.
This simply means that the figure of one million views is often exaggerated. Perhaps a pool could be organized to estimate how many of those one million views originate from Japan.
