Crackle was not created by Sony Pictures Television Networks with the intention of directly challenging Netflix, it began as Grouper, an online, ad-driven distributor for Hollywood movies, which Sony bought in 2006. However, in the second half of 2016, Crackle quietly transitioned to an SVoD model in Latin America through partnerships with pay TV operators and is already reaping the rewards – the latest being a partnership deal with billionaire Carlos Slim’s América Móvil empire.
A combined anti-Netflix resistance between Sony and América Móvil will see Crackle integrated into the Claro Video SVoD offering – reaching 9 markets across Latin America following a five-month test period in Mexico. Claro Video subscribers can access Crackle for an additional fee on top of the service’s base monthly cost of $5.
Significantly, this hints Crackle may also adopt to an SVoD model outside of Latin America and it helps Claro Video significantly, which was struggling to make much headway on its own two feet, having been rapidly overtaken in LatAm by Televisa’s Blim, and of course Netflix. Our own streaming forecast has the OTT version of Claro TV at just 750,000 subscriptions across LatAm, and Blim at over 2 million, with Netflix out of sight at 10.7 million in 2017.
We’d probably be branded mad for thinking Crackle could ever replicate its LatAm success with a late arrival to the SVoD party in the US market – so what’s the secret? Well, Sony claims Crackle’s flexibility has contributed to its rapid uptake by operators across Latin America, adapting its offering to tailor for specific requirements, plus integrating with set tops, as part of mobile packages or with broadband services – with flexible pricing structures.
Crackle published figures last April showing 18 million monthly viewers in the US, so there is clearly a large fan base already in place. Introducing a small subscription fee undercutting Netflix could be on the horizon for Crackle, although the mechanism for selling ad space takes in Crackle properties and PlayStation devices using a single ad served on multiple systems, which would be disrupted by going subscription-only and dropping the adverts. Perhaps a premium edition which replaced the adverts for a subscription might make more headway.
Crackle also targets younger demographics in the US, while premium content is priority south of the border. Crackle’s ad-supported model did not prove so successful in the UK and Australia, closing its doors in 2014.
Back in June, Sony did a similar deal with Tigo, for Central America and Colombia, followed by a local deal with Costa Rica’s Cable Tica and a Uruguayan debut in October through Telespectaculo. Today, Crackle claims over 50 operator partnerships throughout Latin America and has content deals with all the major US studios.
On the technical side of Crackle, not much is known other than Canadian UI software house Youi.TV has built some of the apps. It is understood most of Crackle is handled in-house by the original team, now at Sony.
América Móvil is integrating Crackle into Claro Video in Chile, Peru, Ecuador, the Dominican Republic, Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica.
“The launch of Crackle through Claro video enables us to expand the service’s footprint through one of the most important digital platforms in Latin America. Through Crackle, we continue expanding the entertainment options for our users. Crackle’s integration complements our offering,” said Sony Pictures Television Network Latin America VP and GM José Rivera Font.