Ellation, AT&T’s subsidiary for online video subscription services, is expanding into the original content space: The company has launched two studios in Burbank and Tokyo to produce shows for its Crunchyroll anime subscription service as well as its VRV video subscription bundle.

The newly-created Ellation Studios unit is being led by Margaret Dean, who until recently was the general manager of Stoopid Buddy Stoodios, the studio behind such animation hits like “Robot Chicken” and “Buddy Thunderstruck.” The first original production to come out of Ellation Studios is “High Guardian Spice” (pictured above), which will premiere on Crunchyroll in 2019.

The company has had some of its upcoming original projects in development for more than a year, said Crunchyroll founder and general manager Kun Gao during a recent conversation with Variety in the company’s San Francisco headquarter office. He said that the move into originals was very much a continuation of Crunchyroll’s existing business. “We’ve been thinking about doing originals for quite some time.”

Crunchyroll began as a website for so-called fansubs — pirated versions of the latest anime shows from Japan that have been subtitled by fans — all the way back in 2006. Soon after, the company began to strike licensing agreements with Japanese broadcaster, and stream their shows outside of their home country.

More recently, Crunchyroll also started to co-produce Japanese anime productions, to the tune of over 50 shows to date. “We are already the biggest co-producers of anime content globally,” Gao said. To date, Crunchyroll has paid Japanese rights holders more than $100 million. The company now has over 1 million paying subscribers, and over 40 million registered users.

But while Japanese anime has turned Crunchyroll into a niche streaming success story, it has also limited the type of stories shown on the service. “Anime continues to be a domestic product for Japan,” Gao said. Japanese animators produce their shows first and foremost for Japanese audiences, addressing Japanese sensibilities.

At the same time, Gao and his team started to notice a growing group of fans on its service who were honing their own animation skills. “We are seeing creators who grew up on our platform,” he said. Now, the company wants to give some of those new voices a forum by producing their shows for a worldwide audience. Said Gao: “Their perspective is a more global perspective.”

Courtesy of Ellation Studios

“High Guardian Spice” concept art.

“High Guardian Spice,” a show about four girls who are honing their sorcery skills at High Guardian Academy, is being created by Raye Rodriguez, who previously was a character designer on Amazon’s “Danger&Eggs!” The shows supervising director is Audu Paden, director of the “Animaniacs.”

“The art style of ‘High Guardian Spice’ combines anime influence with an untold story and unique perspective,” sad Dean. “Raye’s team has been inspiring to work with, and we’re can’t wait for fans to see what we have in store for them.”

Ellation and Crunchyroll aren’t the only ones investing in anime originals. Netflix in particular has invested in content both from Japan as well as other markets, including the recently-announced Mexican anime “Seis Manos.” Gao said that Netflix’s engagement in this space was positive for the medium, but also argued that Crunchyroll would be able to better serve anime fans due to its singular focus. “We are not trying to be something for everyone,” he said. “Crunchyroll is trying to be everything to someone.”

Peter Chernin’s Chernin Media Group acquired a majority stake in Crunchyroll in 2013, and subsequently contributed it to Otter Media, the company’s joint venture with AT&T. Otter’s owners bought out Crunchyroll’s remaining owners in early 2018, and AT&T acquired the Chernin Group’s stake in Otter Media earlier this month, effectively making the telco the sole owner of Crunchyroll and Ellation.