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Sony Pictures Television chairman Mike Hopkins wants to grow the studio’s advertiser-based SVOD platform Crackle — but wants to do so by bringing in a partner on the service that’s home to scripted originals including Snatch.
On Monday, Hopkins informed staff of the company’s plans to bring in another outside partner for the venture via an internal memo. Sources stress the move is considered a way to bulk up the service. One option could be selling a stake in Crackle, though insiders caution Sony is not looking to completely sell that part of its business.
Hopkins is seeking a potential partner to help drive Crackle’s scale and position the streamer to better compete in a landscape that also features deep-pocketed streamers Apple, Netflix, Amazon, Hulu, YouTube and Facebook, among others.
The goal, sources say, is to bring in a partner who could help deliver additional content, users and leverage existing assets to grow Crackle’s audience. The streamer, overseen by Eric Berger, recently surpassed 100 million downloads, with content available on more than 25 devices in 20 countries around the globe.
Sony has enlisted investment bank Moelis & Co. to help identify potential partners who can help drive growth and maximize Crackle’s growth. Other AVOD services, media and entertainment companies with a sizable library of content and network of platforms or telecommunications businesses with broad direct-to-consumer reach are considered to be ideal partners for Crackle.
The move comes as consolidation in the Peak TV era is increasingly becoming the norm. Disney is on the verge of acquiring Fox assets, including its movie and TV studios, while AT&T recently completed a purchase of Warner Bros. and, under new WarnerMedia CEO John Stankey, wants to bulk up HBO to better compete with deep-pocketed rivals including Netflix that are increasingly dominating the industry.
For Crackle’s part, the service is home to scripted originals including Start Up, The Oath and Snatch, many of which have struggled to cut through a cluttered landscape expected to top 520 this year. Crackle was previously best known as the home for Jerry Seinfeld’s Emmy-nominated Comedians in Cars Getting Coffee. However, that series moved to Netflix as part of a larger deal with Seinfeld that included the show’s library, new episodes and stand-up specials.
For his part, Berger joined Sony in 2006 and became G.M. of the streaming service two years later. He was upped to executive vp and chief digital officer at Sony Pictures TV in November, a role that expanded his purview to overseeing digital strategy for Sony’s worldwide network group.
The decision to seek a partner on Crackle comes months after Sony shut down the service in Canada and a round of layoffs in May that were part of a larger restructuring to streamline its operations.
Read Hopkins’ memo to staff below.
I have some news to share. As we build and grow our direct-to-consumer businesses, I want to make you all aware that we have begun the process of exploring potential partnerships for Sony Crackle to drive scale and position the streaming network to be more competitive.
Crackle is a tremendously valuable asset for us, and with premium AVOD getting more and more traction as advertisers seek high value online advertising opportunities, we feel there is room for greater growth for our OTT business. With the right partner — one that could bring additional content or users or leverage existing assets for advertising and promotion — we feel we can expand Crackle’s audience and significantly increase revenue.
In the meantime, a small group is working on the potential partnership so that the rest of our teams can operate business as usual, focusing on their day-to-day work and commitments to help ensure Crackle remains the premiere AVOD platform.
Natalie Jarvey contributed to this report.
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