Sony Sells Crackle, Teams on New 'Crackle Plus' JV
CULVER CITY, CALIF. & COS COB, CONN. -- Sony Pictures Television (“SPT”) one of the television industry’s leading content providers, and Chicken Soup for the Soul Entertainment, Inc. (“CSS Entertainment”) (Nasdaq: CSSE), a fast-growing media company building online video-on-demand (“VOD”) networks that provide content for all screens, today announced the signing of a definitive agreement to establish a new streaming video joint venture to be branded “Crackle Plus”.
SPT and CSS Entertainment will each contribute certain assets to establish Crackle Plus and position the new company as a leading AVOD streaming platform. Each company plans to bring its respective audience and its video-on-demand and content expertise to the joint venture.
SPT’s contributions to the joint venture include Crackle’s U.S. assets including the Crackle brand, its monthly active users and its ad rep business. SPT and the joint venture will also enter into a license agreement for rights to popular TV series and movies from the Sony Pictures Entertainment library. In addition, New Media Services, a wholly-owned subsidiary of Sony Electronics Inc., will provide the technology back-end services for the newly formed joint venture. Ownership of Crackle’s original content library will be retained by SPT but will be made available for licensing to the joint venture. CSS Entertainment plans to include in the joint venture six owned and operated AVOD networks (Popcornflix, Truli, Popcornflix Kids, Popcornflix Comedy, Frightpix, and Espanolflix) and subscription video-on-demand (“SVOD”) platform Pivotshare.
Crackle Plus is expected to have:
- A combined audience of nearly 10 million monthly active users on its owned and operated networks, as well as millions of additional users from its ad rep business, positioning it as one of the largest AVOD platforms in the U.S.
- Over 38,500 hours of programming
- More than 90 content partnerships
- Over 1.3 billion minutes streamed per month
- An offering of over 100 networks, both ad-supported and subscription-based, including networks owned by Crackle Plus and third-party networks distributed via Pivotshare
AVOD streaming services like Crackle Plus are growing in popularity with consumers. With the expansion of smartphone adoption and the explosive growth of content consumption on mobile devices, the number of non-pay TV households in the United States reached an estimated 24.9 million in 2017 (Rapid TV), and the number of cord-cutters is projected to grow to over 55.1 million by 2022 (eMarketer).
Under the terms of the agreement, CSS Entertainment will own the majority interest in the joint venture. Additionally, SPT will receive four million five-year warrants to purchase Class A common stock of CSS Entertainment at various prices. The addition of the Crackle assets is expected to more than double CSS Entertainment’s overall revenue and add meaningful EBITDA.