Peter Chernin, the former News Corporation executive who now runs his own media investment firm, has proved to be an astute investor, putting money to work in high-flying start-ups like Pandora, Tumblr and Flipboard.
Add to that list a lesser-known business: Crunchyroll.
On Monday, the Chernin Group acquired a majority stake in Crunchyroll, a San Francisco-based company that streams Japanese anime over the Internet. Terms of the deal were not announced, but a person briefed on the matter said the investment was worth a little less than $100 million. Existing management and TV Tokyo, another investor in Crunchyroll, will remain involved.
Though Japanese anime is not mainstream fare, enthusiasts of the genre tend to be passionate about it. Crunchyroll has established itself as a destination site for anime fans, with free and ad-supported offerings plus a successful subscription service.
“This deal is about two things,” Mr. Chernin said in an interview. “They have built an extremely impressive anime offering. Hardcore anime fans love it. At the same time, they deserve credit for building a great subscription video platform.”
Mr. Chernin said Crunchyroll was profitable and had doubled users in each of the last three years. People briefed on the matter said the company had more than 300,000 subscribers paying about $7 a month and that revenue was more than $25 million a year.
“Anime is at the heart of our company – We love anime, supporting the growing anime community and working to provide the best entertainment to its fans,” Kun Gao, Crunchyroll’s founder and chief executive, said in a statement. “This investment from T.C.G. will allow us to provide an even better experience and service for anime producers and fans worldwide.”
But the investment in Crunchyroll is about more than anime for the Chernin Group.
Gaining a foothold in the emerging online video sector has emerged as a priority for Mr. Chernin. Over the summer, the group made what Mr. Chernin described as an “ill-fated attempt” to acquire Hulu, the online video service that he helped establish while at News Corp. Hulu’s owners ultimately decided not to sell. The Chernin Group is also an investor in Base79, which produces content for YouTube channels.
Mr. Chernin said that Crunchyroll had set itself apart by creating a profitable subscription video service that operates in more than 160 countries, all while excelling at the coding, streaming, subscription-management services and monetization strategies needed to make it work.
“We looked at this as an exciting standalone business, but also as a platform that’s capable of delivering a range of content experiences,” he said, adding that the company planned to expand into content areas beyond anime in the months to come.
Though Mr. Chernin did not elaborate, he said that “they may range from sports, to foreign language content, to specific entertainment genres.”
“More than anything, what’s going to drive subscription services in this space are things that people are deeply passionate about, and things that have global interest,” he said.
For now, that means anime. It remains to be seen what other types of popular entertainment Mr. Chernin believes can be served up through Crunchyroll.