The Deserved Downfall of Crunchyroll: Every Controversy and Crime Explained

Crunchyroll, once a beloved home for anime fans worldwide, is now facing a serious threat to its streaming empire. What began as a scrappy, fan-driven platform has spiralled into years of controversy and legal troubles. From its early days of piracy to cracking down mercilessly on fans, betraying loyal subscribers, and mistreating its employees, the story of Crunchyroll is one of lost goodwill at an alarming scale. This blog post explores every major controversy and legal challenge that has contributed to Crunchyroll’s decline and the brewing crisis it now faces.

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Crunchyroll’s Origin: From Pirate Site to Streaming Giant (2006–2009)

Crunchyroll started in 2006 as a passion project by university students eager to share their love of anime. At the time, it was effectively an illegal piracy site, streaming anime episodes sourced directly from Japanese TV, often just one day after airing. The subtitles were 100% fan-made, unpaid, and unofficial. This near real-time release of shows like Naruto and Bleach gave fans worldwide unprecedented access.

What set Crunchyroll apart from other piracy sites was twofold:

• A brash approach to content hosting, including not only anime but also Korean dramas, live-action footage, video game clips, and music videos.
• A strong, built-in community with comment sections and forums where fans discussed theories, episodes, or simply bonded over their shared passion.

This tight community was crucial because anime was a niche interest for many Western fans. Crunchyroll was more than just a streaming site; it was one of the few places for fans to connect. It resembled a mix of YouTube, Newgrounds, and Netflix well before streaming giants invested heavily in Asian content.

Content categories featured included:

• Latest anime episodes (illegally uploaded)
• Korean dramas
• Live-action dramas
• Video game content
• Music videos

Crunchyroll’s willingness to serve up all these content types gave it an edge over competitors, even if its legality was questionable. Fans loved it, making it hugely popular despite the scraping of official channels.

The Turning Point: Venture Capital Funding and Going Legit (2008–2009)

In 2008, venture capital firm Benrock invested $4 million into Crunchyroll—a bold move that signalled confidence in its traffic and potential legitimacy. Soon, Crunchyroll deleted all pirated episodes and fan-subtitles, enraging and confusing many of its original users.

But this radical shift set the stage for what came next: official licensing. On January 8, 2009, Crunchyroll announced a deal with TV Tokyo to simulcast Naruto Shippuden episodes legally. This was huge because Naruto was one of the most popular anime titles globally, representing a golden opportunity.

Crunchyroll’s transformation from piracy to an official legal streaming platform was the only way to gain the trust of Japanese rights holders and build a sustainable business. This marked the start of their journey as a legitimate streaming service, with an emphasis on proper licenses and official content.

Building a Legal Anime Empire: Growth and Community Rebuilding (2009–2015)

Following their first deal, Crunchyroll steadily signed licenses for more popular anime titles. They rebuilt a bridge of trust with fans, who tolerated subscription fees since Crunchyroll picked anime shows tightly aligned with user interests. The company also retained its original community features and introduced new ones:

• Crunchyroll Manga: Offering fans access to licensed manga.
• Digital storefront: Enabling legal purchases of anime-related content.

This period saw Crunchyroll rise to become the world's largest legal anime streaming platform, respected for selecting the most relevant shows for Western viewers and fuelling community discussion.

Sony’s Acquisition: The Beginning of Controversy (2018–2020)

Rumours began circulating about Sony’s plan to acquire Crunchyroll, which initially seemed unlikely given Sony’s ownership of Funimation, Crunchyroll’s main rival, specialising in English-dubbed anime. Funimation had deep roots, having syndicated Dragon Ball on Western TV in the 1990s and building a strong catalogue of popular dubbed anime.

Sony’s acquisition raised serious antitrust concerns. The company would hold a monopoly on nearly the entire Western anime streaming market. The US Justice Department extended its antitrust review, worried about the impact on competition. Fans feared:

• Higher subscription prices
• Less innovation and choice
• Reduced competition quality in anime streaming

Despite these worries, Sony completed the billion-dollar acquisition of Crunchyroll in 2020, consolidating its anime streaming platforms under one umbrella.

Post-Merger Fallout: Platform Consolidation and Price Hikes (2021)

Soon after the merger, Sony shut down Funimation and other streaming platforms, moving all content to Crunchyroll alone. This sudden consolidation angered many fans who valued diversity in the market.

Crunchyroll also announced significant price increases for its subscription plans, affecting over 36 countries. Here’s a snapshot of the price changes:

Plan	Old Price	New Price
Mega Fan Tier	$9.99/month	$11.99/month
Ultimate Fan Tier	$14.99/month	$15.99/month

 

Fans were furious, feeling the price hike was forced upon them without input.

Making things worse, Crunchyroll announced that anyone who had purchased digital copies of anime through Funimation lost access to those copies permanently, with no refunds offered. This decision felt like a betrayal of long-time paying customers who had directly supported the platform and their favourite shows.

Privacy Breaches and Legal Problems: The 2023 Class Action Lawsuit

Crunchyroll faced a class action lawsuit after allegations surfaced that it shared subscribers' anime viewing histories with third parties like Google, Adobe, and Meta without proper consent. This was a potential privacy violation of the United States Video Privacy Act.

The company eventually settled, effectively admitting wrongdoing. Fans were outraged, especially given the nature of their watching habits, which often include personal or “guilty pleasure” anime.

This breach further damaged trust at a time when Crunchyroll’s relationship with its users was already fragile.

Crunchyroll’s Internal Crisis: Treatment of Employees and Voice Actors

Underpayment and Exploitation

Reports have surfaced that Crunchyroll severely underpaid crucial staff, such as voice actors and translators. Some translators reportedly received as little as $80 per episode, despite handling complex localisation tasks that require cultural research and adaptation.

These roles are vital to Crunchyroll's service. Fans have raised concerns about the quality and ethics of this cost-cutting approach.

Union Busting and Kyle McCarley Drama

Kyle McCarley, the voice actor for Mob Psycho 100’s protagonist, was unexpectedly fired when Crunchyroll refused to renew his contract due to his membership in the SAG-AFTRA union. He wanted good-faith negotiations for future union contracts, but Crunchyroll declined and cut ties instead.

This “union busting” move sparked protests within the anime community. Fans boycotted Mob Psycho 100’s later seasons, showing their disapproval of Crunchyroll’s disregard for union protections.

David Wald Controversy: Mail Theft and Toxic Workplace Allegations (2024)

In a shocking revelation, voice actor David Wald accused Crunchyroll of stealing and disposing of his private mail for over five years. Fan gifts and letters meant for him were either given to staff or thrown away. He posted photos of unopened care packages online, igniting viral outrage.

Wald subsequently left Crunchyroll, citing an abusive and hostile work environment. Other employees have come forward echoing these toxic workplace conditions, including one former engineer who described mental health struggles met with hostility rather than support.

"After sharing my depression diagnosis, I was met with verbal abuse and eventual termination," said the engineer in a LinkedIn post.

This spotlight on Crunchyroll’s internal culture painted a grim picture of a company seemingly indifferent to its workers.

Translator Controversies and Rise of AI Subtitles (2024)

Translator complaints have long plagued Crunchyroll, including low pay and stressful work conditions. Translators do more than convert language—they research cultural nuances and adapt jokes, idioms, and references, which can be very challenging.

To cut costs, Crunchyroll announced they were focusing on AI-generated subtitles. The CEO openly stated that AI-generated subtitles are “definitely an area we're focused on,” sparking backlash from the community who felt the quality and soul of translations were being sacrificed.

Pros and cons of AI subtitles:

• Pros:

• Faster subtitle production
• Lower costs

• Cons:

• Poor translation quality
• Loss of cultural nuance
• Risk of alienating fans due to inaccuracies

This has raised serious ethical questions about the future of localisation work.

Removal of Fan-Favourite Features: Manga Service and Comment Sections

Two features that once made Crunchyroll stand out have been removed recently:

• The Crunchyroll Manga service was discontinued, taking away a valued-added benefit, especially for subscribers facing rising prices.
• All episode comment sections were deleted. Crunchyroll cited toxic hate review bombing against BL anime like Twilight: Out of Focus as the reason. While dealing with hate speech is important, many fans felt this was an excuse to remove a core community feature.

Removing comments felt like silencing fan voices and robbed many users of the social interaction that made Crunchyroll special compared to Netflix or Hulu.

One long-time fan said, “Reading episode comments and sharing thoughts was how I connected with other fans. Without it, the site feels empty.”

Japanese Anime Industry Pushback Against Crunchyroll’s Monopoly

Japanese studios and manga publishers have started voicing concerns about Crunchyroll’s dominant grip on anime distribution.

Key concerns include:

1. Allegations that Crunchyroll intentionally hindered the promotion of anticipated anime like Dondon.
2. Their monopoly over 75% of the global anime market.
3. Warnings that poor management risks damaging Japanese creators’ reputations and profits.

If Crunchyroll loses good standing with Japanese companies, it could jeopardise access to licenses and future projects.

Controversies Surrounding Crunchyroll Awards and Public Perception (2024)

Veteran anime YouTuber Glass Reflection, who served as a judge in the Crunchyroll Awards, revealed that the awards are rigged to favour the surest crowd-pleasers. The process boosts marketing and traffic for more popular shows hosted by Crunchyroll-connected sites.

The awards face criticism for:

• Ignoring less popular but artistically excellent anime.
• Potential conflicts of interest as judges work for related news sites.
• Deepening fan disillusionment with Crunchyroll’s increasing corporate greed.

This damage to the awards’ credibility adds to Crunchyroll’s fading reputation.

The Irony: Rise of Anime Piracy as Fans Reject Crunchyroll’s Direction

Recently, piracy sites have surged in popularity, with some surpassing Crunchyroll and even Disney+ in monthly visitors. It’s a twist of fate for Crunchyroll, which started as a piracy site itself.

Rather than improving the service and recapturing goodwill, Crunchyroll launched over 680 million URL takedown requests aimed at shutting down pirate sites. Fans are turning back to piracy not because they want to steal, but because they feel neglected and overcharged.

Meanwhile, competitors like Netflix and Hulu are cutting into Crunchyroll’s market share, potentially ending its early dominance.

Summary of Major Crunchyroll Controversies

Crunchyroll’s troubles cover a broad range of issues:

• Origins in piracy and fan subtitle deletions
• Sony’s controversial monopoly acquisition
• Price hikes and loss of purchased digital content
• Privacy violations and legal settlements
• Poor treatment of employees and union busting
• Accusations of mail theft from voice actors
• Underpayment and exploitation of translators
• Shift to AI subtitles with fan backlash
• Removal of beloved community features like comments and manga
• Resistance from Japanese studios over monopoly concerns
• Rigged awards scandal discourages fair recognition
• The resurgence of anime piracy due to fan dissatisfaction

Crunchyroll’s story is a cautionary tale about how chasing profits while ignoring fans and workers can lead to a steep downfall.

For more insights on anime streaming and industry news, visit the in-depth Oshi no Ko Episode 1 Review and explore the latest on Manga and Anime Piracy Crackdowns.

Crunchyroll’s journey shows that trust and respect are priceless currencies, particularly in a passionate community like anime lovers. Their refusal to protect either suggests a challenging road ahead, even as the anime boom continues.