Sony has sold its veteran OTT video business Crackle to entertainment platform CSS Entertainment (Chicken Soup for the Soul Entertainment), marking the end of a 13-year journey for the Japanese conglomerate which helped define today’s thriving streaming video market. But it isn’t necessarily au revoir forever in the Sony-Crackle love story.
The deal instantly propels CSS Entertainment into the big time, inheriting an established ad-supported platform with some 10 million monthly active users streaming an average of 1.3 billion minutes of content every month through 90 content partnerships. However, Sony distancing itself from its long-term AVoD division is understandable when you consider it was voted the worst video streaming service in the US last year from a list of 18 popular platforms, scoring 68 in the American Consumer Satisfaction Index, and in April 2017 Sony published figures showing 18 million Crackle MAUs – a dramatic two-year user base shrinkage of 8 million.
But what next for Sony’s video roadmap? Well, according to Sony Pictures Television chairman Mike Hopkins and CSS Entertainment CEO and chairman Bill Rouhana, talking to Variety this week, Sony will continue its role as a back-end technology supplier – as Sony and CSS Entertainment prepare to relaunch the service as Crackle Plus.
Our interest was immediately piqued, expecting plans for a new-look Crackle to enter the SVoD battlefield in the US, although the platform’s new owner confirmed Crackle Plus will continue operating as an ad-supported platform. We say this because in the second half of 2016, Crackle quietly transitioned to an SVoD model in Latin America through partnerships with pay TV operators – triggering us at the time to tentatively suggest a US SVoD launch could be just around the corner. Unfortunately for Sony, after early initial promise picking up 400,000 subscribers, Crackle Latin America was shuttered in January this year due to economic difficulties – coming six months after Crackle Canada suffered the same fate.
At the time, Sony claimed Crackle’s flexibility 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.
Not flexible enough, clearly. So, Crackle clearly wasn’t cut out for Latin America’s SVoD scene despite striking notable deals with América Móvil of billionaire Carlos Slim’s empire, integrating into the Claro Video SVoD offering to offer Crackle content to customers across 9 markets in Latin America, following similar deals with Tigo in Colombia, as well as Costa Rica’s Cable Tico and Telespectaculo in Uruguay. Yet Crackle’s failings aren’t limited to subscription-based, as Crackle Canada stuck to Sony’s ad-supported guns and it also exited the UK market way back in 2014.
Consolidation is therefore the next necessary chapter in Crackle’s journey and, following comments made in the Variety report, plans for transitioning to an SVoD model in the US look increasingly unlikely. Hopkins described the AVoD market as “being ripe for innovation,” while Rouhana reckons “roughly 50% of VoD market revenue will come from advertising.” In addition to maintaining back-end responsibilities, Sony Pictures Television will provide movies and TV series from its content catalog, combined with CSS Entertainment’s AVoD properties from the Popcornflix brand (Popcornflix Kids, Popcornflix Comedy and Espanolflix), as well as Truli, Frightpix, and – the exception to the rule – SVoD service Pivotshare.
As for third-party vendor suppliers, we know Canadian UI software house Youi.TV has built some of the apps and app developer Float Left is also a Crackle customer, while we understand most of Crackle has been handled in-house by the original Grouper team.