Sony Backs Ad-Supported Streaming With Exclusive Content for Crackle

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Sony has indicated its faith in ad-supported streaming with a deal between Crackle and NBCUniversal for the exclusive streaming rights to a variety of movies.

Image: Itsuo Inouye/Associated Press

By Jason Abbruzzese2014-04-03 22:04:53 UTC

Crackle, the free streaming video platform backed by Sony Pictures Entertainment, has signed a deal with NBCUniversal for the exclusive rights to more than 140 movies over the next three years.

The agreement will mean that a variety of movies such as Ray, Jarhead and the remake of King Kong will not appear on other ad-supported distributors including television channels.

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Sony's investment in Crackle and its willingness to spend the money to acquire exclusive rights to content indicate a willingness to go against the grain of other streaming sites like Netflix and Hulu, which work primarily on subscription models.

This makes Crackle something of a hybrid, operating as a streaming service but making deals like a television channel.

"We acquire content like a true network," said Philip Lynch, senior vice president of digital networks and games for Sony Pictures Television. "We license this content. We're not like a Hulu or a YouTube, which give revenue shares."

The acquisition of exclusive rights provides Crackle with what it hopes will be content that draws viewers.

"In order for us to build a brand and makes this a destination for consumers to go watch films, we're going to have to have exclusive rights from a customer acquisition standpoint to get them on the service," Lynch said.

Since it is entirely supported by ads, Crackle's strategy is to appear on as many platforms as possible. The streaming channel is now on 27 different devices including gaming consoles, streaming set-top boxes and connected televisions.

"The traditional world goes and does the [subscription] fees and we're 100 percent ad supported," Lynch said. "We try to make that up by ubiquitous distribution."

Reliance on ads means a reliance on viewers. Crackle has had its struggles, recently shutting down in the UK.

Crackle was formerly known as Grouper, which Sony bought in 2006 for $65 million. Its original iteration placed it in competition with YouTube more than streamers like Netflix. Sony decided to rebrand it as Crackle in 2007 as a streaming and movie TV library.

Sony has struggled more broadly, spinning off its TV business and selling its computer division.

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Topics: Business, crackle, Film, Media, sony, Sports, streaming video