Sony’s Crackle hit a milestone last month when it landed its first Emmy nomination in a major category, a best variety talk series nom for Jerry Seinfeld’s Comedians In Cars Getting Coffee. The streaming network, whose original programming offerings range from comedies (animated SuperMansion) and half-hour dramas (Chosen) to original movies, (Joe Dirt 2), variety series (Comedians and Cars) and game show (Sports Jeopardy!), entered the hourlong drama field with Art of More. Now the net is looking to solidify its position while breaking new ground with its second premium drama entry, the gritty StartUp starring Martin Freeman, which is being released today after an early rollout on Reddit, Playstation and Amazon Fire TV, part of a marketing effort by Crackle to reach millennials. In an interview with Deadline, Crackle GM Eric Berger talks about the service’s evolution as an original programming player and its plans in the original arena while also continuing to carry licensed movies and anime. Berger also discusses whether Crackle 2.0 will remain ad-supported or explore SVOD model, the upcoming second season of Art of More, the future of flagship Comedians In Cars and the prospect for virtual reality programming.

DEADLINE: How was the decision made for Crackle to enter the original hourlong drama series space?

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Crackle

BERGER: We had been doing shorter form content. In fact, we used to do very short-form content, about 5-to-10 minutes, and then we had moved upstream to what we consider to be more premium content with half-hour dramas — Chosen, The Unknown, Sequestered — and and a couple of features as well — Extraction and The Throwaways. But a couple of years ago, we realized that we wanted to play in a much more premium space as we really viewed ourselves like a television network. A network that just happened to be streaming to devices.

Much of our viewership — about 70% — comes from connected TVs. It has been growing steadily over the last few years when we started to realize that people were streaming premium content on Crackle in the living room on devices such as PlayStation and Xbox, and Roku to a big TV set. And while they were streaming the movies and shows on Crackle that we were licensing from other places we felt that our originals needed to be at the same level and at the same caliber, and sit side-by-side with the other content that’s on our service. And the way to provide original programming like that in that living room environment was to step up to the one-hour drama space.

DEADLINE: How would you evaluate your first foray into hourlong drama space with Art of More?

BERGER: We were looking for something for a while that was very different, a world we hadn’t seen before that we thought would appeal to our audience and would appeal to people who like episodic television. And when we found this story about the auction world and the seedy underbelly of the auction world, and collectibles and the extremes that people will go through to acquire the collectibles, sell the collectibles and what goes on with the lead character Graham as a former Marine in Iraq and who made smuggling connections, we knew that we were onto something special and that this would play a meaningful role in our portfolio. And it did.

It really transformed the way that a lot of our viewers think about the programming that we have and that our partners — Xbox, Roku, and Apple — think about us as well. Because we sit inside of Sony Pictures Television, we distribute the content on a worldwide basis through our international TV distribution teams and through our home entertainment as well. And so, the content had to be at a quality level where it would be appealing to TV buyers around the world and through home entertainment and it was, and it is. And those decisions, as well as the success on Crackle, fed into our going into the second season of the show.

DEADLINE: The show was net with mixed reaction by critics and there was some confusion about the perception of the title. Any adjustments that you will be making for Season 2?

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Crackle

BERGER: We’re continuing down the journey of Graham Connor, the lead character. And so, some of the feedback we got is that people didn’t necessarily understand that we’re on this journey with Graham, the ex-military smuggler who’s now in this world of auctions and collectibles. I think we really start to take his character and his story to the next level. You still have an amazing ensemble cast with Dennis Quaid and his character, which started out with a little bit of a limited arc in the first season. We’re going to go deeper into his character arc, as well as Kate Bosworth. Kate is just absolutely amazing in her role as Roxanna Whitman and there are a lot more places that we think that she can go and that she’s going in season two.

DEADLINE: Now you’re going even darker with your second drama, StartUp. Was there anything that influenced your decision, shows like Mr. Robot?

BERGER: For the second drama we were looking for something that, again, was a world we hadn’t seen before. And this take on technology and cryptocurrency absolutely is something that we think cuts through the clutter and is something that we hadn’t seen. First of all, it was multicultural to its cores, and this doesn’t just mean the casting of the characters, but the actual essence of the story. That each of the main characters comes from a completely different universe and four completely different worlds. The Haitians, the Cubans, you’ve got the country club characters, you explore the world of the federal government and through the course of the season you see these worlds, sort of unravel and collide, and the authentic take of each of these characters in their environment throughout Miami.

It’s also a very unique look at the tech world that we hadn’t seen before. So, this is not like a Silicon Valley or a social network take. This is about some real grassroots tech development and explores how these great ideas are happening in garages in Miami, which is a burgeoning tech scene, but it’s representative of how tech is developed around the world. And this cryptocurrency is a fascinating topic that is very hot right now and a lot of people are exploring ways to get into cryptocurrency and make money through cryptocurrency. But the last thing we found is that it was very authentically youth-oriented. That it had a real mature millennial appeal touching on many of the issues that are real to them.

DEADLINE: What are your expectations for StartUp?

BERGER: We do think that this will reinforce with our existing audience that the type of programming they can expect from us is high quality, continually improving, showing them things they haven’t seen before, but also that it opens up a new audience to Crackle. One of the metrics that we measure is what percentage of people are new to the service from our original programming, and then, what percentage of viewers go on to watch other programming on the service. So, in addition to just looking at the raw numbers we look at those performance metrics as an indicator of success. We have very high expectations for StartUp on both of those degrees. Both introducing people to Crackle and hopefully at that point introducing them to other content on Crackle.

DEADLINE: Doing original dramas is expensive. Is your original budget going up?

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Crackle

BERGER: As you make that step from the half-hours into these one-hour dramas, it is an increase in commitment that we think is warranted. You’ll see a number of dramas. We have half-hour dramas, comedies as well, such as SuperMansion, executive produced by Bryan Cranston and Seth Green, and starring Keegan-Michael Key, who was just nominated for an Emmy, as well as Chris Pine who was just nominated for an Emmy for that show. We of course have Comedians in Cars Getting Coffee coming back for more seasons. We have other features that we will be producing and Sports Jeopardy! as well.

So, there’s a pretty varied slate that is growing. One of the dramas that we recently announced is Snatch, based on the motion picture, and we’re excited about that one as well. We think it will be a great fit with audiences on Crackle who already love the film when we show it on the service.

DEADLINE: Anything more specific, more number-focused on the programming budget increase?

BERGER: I don’t have anything number focused today. It’s a noticeable amount of increase in money being spent in order to produce a slate like this versus where we’ve come from.

DEADLINE: Crackle has comedies, dramas, a game show, a variety show, original movies. Are you going to stay diversified or are you focusing mostly on drama, and the rest of your portfolio will be a little bit of everything?

BERGER: We’re going for a diverse slate. The dramas get a lot of attention and they’re a big commitment, and we think will be an important anchor for our customers. But we view ourselves like a network and as a network we feel like we’re covering a lot of different bases, not just with the dramas and the features, but we’ve got the half-hour comedies, we’ve got some unscripted and shows like Comedians. We’ve got a quiz show, which is unique for a streaming service. And that mix is a nice mix we find for our customers rather than being just one thing. It’s more representative of a network that they can go to for a variety of quality programming in different genres.

DEADLINEAnd that will stay going forward?

BERGER: Yeah and that will stay.

DEADLINE: Why did you make the decision to enter Comedians in Cars as a variety show at the Emmys and did you feel it was going to work out?

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Crackle

BERGER: We felt it was the right thing to do. That the show really isn’t short form or special it’s a variety of lengths. Most of them or I think all of them are over the 15 minutes that was designated by the Academy. It’s a premium show and it fits in a premium category. And at the end of the day, as I said, we felt it was just the right thing to do and that it holds up on its own.

DEADLINE: What is the future of the show? Will it be on Crackle for the foreseeable future? And what about the talk that it may become a television series on a traditional network?

BERGER: We’re continuing to move forward with it as a Crackle show. We have a great relationship together and we’re all very collectively happy with the success and growth of the show. Not to speak for Jerry Seinfeld, but he’s doing a very interesting thing in documenting comedy history here and real conversations with people who are at the top of their game, and are experts in their craft that you just haven’t seen before in a very authentic way. And there’s a lot more people to talk to, a lot more room to go with that show and we’re going to keep going as long as we can keep going.

DEADLINE: You also have been doing original movies as one-off, some of them titles from the Sony library, like Joe Dirt. Are you going to be doing more of that? Is it going to be mostly sequels or prequels of existing Sony titles, or you may try again some original concepts like The Throwaways?

BERGER: We’ve done both, with The Throwaways and Extraction, and then the last few, Dead Rising and Joe Dirt 2, have been based on intellectual property. And that really has worked out very well for us. It’s hard, as you can imagine, to break through in the movie space with everything going on today and these are some great brands that really connected with our audience. And a lot of it was not just about taking something that had a brand in the marketplace, but taking something that resonates with our consumers using the data that we had. So, every time we put Joe Dirt on Crackle, it over-indexed, it really outperformed and we felt very confident that our audience would react to that.

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Crackle

Dead Rising, based on the Capcom video game, while that per se was not on Crackle, Crackle does very well on game consoles and over-indexes with gamers. And also, when movies like Resident Evil, Ultraviolet, Underworld and Underworld Evolution are on Crackle, they perform very, very well. So, we felt that would be a good mix. That’s why we did the first Dead Rising and then went on to make Dead Rising Endgame as the second feature. So, I think we’re open to exploring new intellectual property if we feel like it will connect with our audience using the data that we have in some way. But we also like the idea of leveraging existing intellectual property.

DEADLINE: What about any potential follow-ups to the movies that you did, like, another Joe Dirt, another Dead Rising? Anything in the works?

BERGER: All good ideas and very open to all of that.

DEADLINE: What is you original series strategy? How many new shows do you plan to add in the next few years?

BERGER: It’s not a specific number. We took a lot of time to find the shows that we’re finding and we’re being very particular about them. It’s not a volume play per se and we want to meet the expectations of our consumers as we grow. So, that’s how we’re rolling out right now rather than just setting that type of a specific target.

DEADLINE: Is virtual reality something that Crackle is going into any time soon?

BERGER: Yeah, absolutely. And I think this is where that advertising lens is critical as a lot of people are trying to figure out the business models. We’ve got a pretty nice holistic approach to this marketplace. The first is that we’ll be creating pieces of original virtual reality content for each of our originals. We’ve already done that with StartUp in partnership with LG and we’re also going to create some original pieces of virtual reality content in the future. In addition to that we’ll be adding the capabilities to view our content through our applications in a virtual theater where they can access a lot of the content on the service, and that’s great from a consumer perspective, but it is great from an advertiser perspective too, to associate their brand with this very immersive experience that the viewers will be having.

DEADLINE: Going forward where do you see Crackle in the digital space with all the other streaming services? 

BERGER: For us, particularly as an ad-supported player, we’re looking for region scale. And so, one of the things that we did recently was launch on our first MVPD partner, cable partner, Comcast. With Comcast we’re in all 22 million homes and on 22 million set top boxes that they control. And we’re sitting there right side-by-side in the network section with other TV networks, like Comedy Central or CNN, and that sort of proves, I think, that the content speaks for itself. That it’s of the quality it needs to be to sit up there with other existing networks and that it’s valuable to Comcast as well, and to their partners. And that type of distribution that shows that the lines are blurring more than ever before between the traditional television world and the OTT streaming world, I think, is where we’re going. That as a network going forward, ubiquitous reach with consumers.

DEADLINE: Should we expect more deals with traditional carriers like Comcast in the future?

BERGER: I think you can expect more, yes.

DEADLINE: Crackle is a rare ad-supported network in the world of SVOD. Is that here to stay? Will you try to do a subscription-based version?

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BERGER: We are very committed to the ad-supported market. The ad-supported market as you know is very crowded at this point and Nielsen has said nearly half of households are using an ad-supported service. It’ll be nearly 80% of households in the future. There’s a lot of people entering the marketplace and we really love our position in SVOD and free to the consumers. And there’s always ability to have a service like ours with this type of content become part of your personal bundle as more and more people start to go into an á la carte world from the big bundle world.

DEADLINE: Are you optimistic about the future? Where do you see Crackle in five years?

BERGER : Very optimistic of course. We feel like we’re in a really interesting point in the marketplace where traditional TV viewing among younger adults is changing rapidly and migrating. You see 30% growth of premium video ads every quarter; brands are looking and want big screen premium video with young audiences, and they’re having trouble reaching them. We’re in a really solid position as both a studio and a network that has very broad distribution and a growing audience that we can connect with brands, and that we can provide great entertainment experiences. And we think that that’s only going to increase in the years to come.

We manage our own proprietary platform and we think that’s a strategic asset for us as a company and we’ve got really unique advertising solutions that we’re rolling into the marketplace starting with StartUp with something that we announced a few months ago called Break-Free. And these types of ad solutions really enhance the overall content solution, sort of change the perception and the experience for people on the ad side, and over the next five years we believe that Crackle would be a leading entertainment network in this changed landscape.