Streaming for Profit: Crunchyroll vs. GOMtv.net

In the age of streaming media, entertainment companies of all varieties are wracking themselves trying to figure out ways to monetize internet video, or at least to recoup the expenses required to run a stream. While the most common method is to utilize some sort of ad system, some sites come out with paid subscriptions. The content is free, up to a certain point, but if you want more you have to shell out some cash. Among these sites are the anime/j-drama/k-drama resource, Crunchyroll, and the center of the Korean Starcraft II scene, GOMtv.net. Both sites use ads, and both sites have subscription services which can remove those ads, as well as give access to higher-quality video, but Crunchyroll and Gomtv.net take two very different, almost opposing approaches to their subscription services.

When you pay for a Crunchyroll subscription, you're paying for speed. Crunchyroll's game is simulcasting. Shows that air in Japan are on Crunchyroll mere hours later. However, in order to see the shows as soon as possible, you have to pay for it. The content eventually becomes available for the non-paying viewers, but it requires a 7-day wait, and for those who thrive on discussing the latest, greatest(?) anime with their friends, that waiting period can become a death sentence for their social life among fellow fans by forcing them out of the loop. Crunchyroll provides a service for those who can't simply can't wait for even fansubs to appear online, drawing power from the "I want it right here, right now" attitude common to anime fandom.

But when it comes to GOMtv.net, you're paying for flexibility. Showing primarily competitive Starcraft II with both English and Korean casts, the stream during the live broadcasts of matches are free. Anyone can tune in around the world, provided they've also downloaded the proprietary "GOM Player," which could be much more of a hassle if it weren't for the fact that the Gom Player is designed much like VLC to be an all-in-one media player. However, once the matches for the day are over, they now become paid content, aside from a handful of previews. GOMtv's subscription gives you the ability to view recordings of the matches after they've happened, which allows you to watch them at your own leisure, rather than having to watch its tournaments during their designated times, which due to varying time zones can be as bad as 4am in the morning or at 10am in the middle of a busy work day.

 

One area that I think is worth analyzing is the value of an instance of the product put out over time, that is, given a single unit, either an episode of a show or a full set between two players, what happens when someone sees it the day it's out, then a week later, then a month or year later, and so on. By value I don't necessarily mean monetary value, but just more generally, how willing are people to watch older instances of a product as more and more time passes? What I am about to present is just my own conjecture, so feel free to correct me if any actual information has proven me wrong.
While Crunchyroll and GOMtv.net differ in that the former provides a wide variety of entertainment choices (dozens of shows are available) and the latter has essentially one long-running show in the form of Starcraft II tournaments (or two, if you want to count the Team League as a separate thing), but to make comparison easier I'm going to say that there's a Single Entertainment Product X, which has the primary trait of being designed to go on for years and is a serial product, so the results of older "episodes" directly affect newer ones (which also creates the possibility of spoilers). For the sake of convenience you can think of it as either Naruto (which is by far the most popular show on Crunchyroll) or the Global Starcraft II League (GSL). I'm also going to simplify the Crunchyroll and GOMtv models to just "starts off costing money, becomes free later" and vice versa, and not deal with the nuanced differences between the fact that "new" in Crunchyroll terms means watching it the first week and for GOM it means watching it live as well as ignore the difference in actual cost of subscriptions.

 

So let's say that the very first episode of Product X has hit Crunchyroll, and that there's already a fanbase for it, due to whatever reason such as anticipation or hype. Crunchyroll banks on the fact that people want to see it as soon as possible and charges them money for it. The people who pay to watch it are essentially saying that Product X, brand new and delivered as quickly as possible, is valuable. Once the episode is over, it becomes background knowledge for the next new episode, which also carries the same viewership value. In time, for those who have already seen these episodes, any value in them would come from how much they are worth rewatching. But while Crunchyroll decides that money is to be had in being first, this concept of "rewatch value" appears to have more cache with the GOMtv.net system. By asking you nothing for the initial viewing but putting a price tag on subsequent viewings, GOMtv.net prioritizes not just convenience and flexibility to watch it at your own leisure, but that returning to past instances of the product is also very important.

But not everyone is already a fan. For people completely new to the product, it doesn't necessarily matter that Crunchyroll gets it faster than anyone else, and over time it matters less and less when exactly a given episode was made. There is nothing necessarily stopping someone from paying for the Crunchyroll subscription, but they would probably need a reason to do so, and while it is certainly possible to ignore the previous content, the fact that Product X builds upon past events means that it engenders a potential feeling of "missing out" unless one watches the back catalog. For Crunchyroll, because the entirety of this back catalog is free (ignoring instances where streaming rights fade), it becomes easier for someone who is not interested in watching to start watching. GOMtv.net and its free initial stream can attract people, but for those unfamiliar with the product being put out, it requires the idea that, while what happened in the past is important, it's not vital to enjoying it. At the same time, it does not offer much reason outright to subscribe to someone who isn't already a fan, and the preview it provides is rather sparse. If they do become a fan however, those older episodes may rise in value, as they help explain how the product arrived at its current, presumably enjoyable point. Here, GOMtv.net would have the edge, provided that accessing that history is considered worthwhile. However, deciding to watch the new material despite having not seen what came prior does not necessarily guarantee that the older episodes will be visited in retrospect, especially if the viewer prioritizes "what happened" over "how it happened."

Of course, despite the fact that I actively ignored the subtleties in each model to give a rough idea of how a product is handled, the difference between solvency and net loss or moderate and high success is probably in the details. Going back to the difference between "new" as defined by Crunchyroll and GOMtv.net, I think that GOMtv.net's model could be better served by having the live broadcast re-streamed two or three times that day or perhaps even re-run for 24 hours to compensate for the enormous time zone differences that can exist between Korea and the rest of the world. I also think GOM's system might be more attractive to old-fashioned companies who may feel afraid to just give the viewer total control of their entertainment product. In time, I think things will shift closer to the Crunchyroll model, but that method also makes it difficult to make a profit off of older material. While perhaps it gains value in becoming a free resource to entice new customers, it does leave the impression that these products are not inherently valuable but rather have value applied to them through their consumers.