Mike Hopkins, the former Hulu chief who joined Sony Pictures Television as chairman last fall, outlined the potential move to bring in an equity partner for Sony Crackle in a memo to staff Monday.
“Crackle is a tremendously valuable asset for us, and with premium AVOD [advertising video-on-demand] 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,” the exec wrote.
Hopkins continued, “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.”
Sony has engaged investment bank Moelis & Co. as part of the process to identify potential partners. The kinds of partners Sony is looking at teaming with on Crackle may include another ad-supported VOD provider, which could expand the variety and scope of content on Crackle and also grow its user base. Other potential partners include another media and entertainment company with a large content library and TV networks that could be promotional vehicles for Crackle, or a telecom business with high-scale direct-to-consumer reach.
According to Sony, Crackle apps have been downloaded more than 100 million times to date and the service is available in 20 countries around the globe. In June, SPT shut down the Canada version of Crackle, with some content to be available on Bell Media’s new VOD services. Sony Pictures TV laid off 12 staffers from the Crackle unit in May.
SPT has contemplated selling a stake in Crackle — and the outright sale of the entire division — off and on over the last several years. Way back in 2006, Sony acquired web-video startup called Grouper for $65 million, which became Crackle.
Crackle is headed by general manager Eric Berger, who also carries the title of chief digital officer at Sony Pictures Television Networks.
In June, as part of a restructuring, Sony Pictures Television also formed a direct-to-consumer unit headed by Berger, who reports to Hopkins. That brought together Crackle and Sony’s other direct-to-consumer channels — Funimation, Film1 OTT and Animax on demand — under Berger’s oversight.
SPT also recently introduced new branding for Crackle, incorporating Sony into the logo.
Read Hopkins’ full memo:
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 theprocess 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 expandCrackle’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.