Crackle said it would shutter its Latin American subscription video service this week after concluding the business wasn’t economically viable. That news followed a decision last June to pull the plug on the free, ad-supported service in Canada.
“The decision to close Crackle Latin America is unrelated to the U.S. Crackle business, which is operated independently as an ad-supported AVOD service,” Keith Le Goy, Sony Pictures Television’s president of worldwide distribution, wrote in a letter to staff that was obtained by Deadline. “We continue to explore potential strategic partnerships for Crackle in the U.S. and will share more information when possible.”
Sony placed an early bet on online video streaming, acquiring the startup Grouper in 2006 — just as YouTube was finding a mass audience. At the time, Grouper was the second largest independent video sharing community behind YouTube. The studio saw the video service was the perfect complement to its various devices.
Sources familiar with the operation say Crackle has struggled with technical problems, a content strategy that didn’t always match the service’s youthful audience (think The Art of More starring Dennis Quaid in a series that explored the underbelly of New York auction houses), and ad practices such as offering “incentives” to get users to watch commercials (the Wall Street Journal reported that Crackle once used a service called Zoombucks as a way to combat mainstream adoption of ad-blocking software).
Still, Crackle has launched such hit original series as comedian Jerry Seinfeld’s Comedians In Cars Getting Coffee (now on Netflix); The Oath, the popular original series that explores the underworld of crime gangs and is executive produced by Curtis “50 Cent” Jackson; and the tech thriller StartUp, which is entering its third season. Such hit shows have helped Crackle achieve all-time highs in terms of viewing minutes per user, and spurred higher video revenue, sources say.
Crackle also enjoys strong brand recognition among consumers, and is positioned in a suddenly hot space in the streaming ecosystem: free, ad-supported streaming.
Media companies are betting that consumers will want to augment their subscription streaming services with free, ad-supported viewing options. Other newcomers, including Pluto TV, Tubi and Amazon’s IMDb Freedrive, seek to capitalize on this opportunity.