Sony Crackle Gets Reboot Via Chicken Soup For The Soul Joint Venture; Eric Berger To Depart After Deal Close

Sony Pictures Television is taking the Crackle assets that had been under strategic review and contributing them to a new joint venture with a smaller but fast-growing streaming player, Chicken Soup for the Soul Entertainment.

The sale of Sonys stake in Crackle will result in a new entity, dubbed Crackle Plus, combining Sony library assets and Crackle originals with the ad-supported VOD networks and subscription streaming platform run by Chicken Soup for the Soul. It will have an estimated 10 million monthly active users at launch, putting it in the same ballpark as free, ad-supported services like PlutoTV, which Viacom bought earlier this year, and Tubi. Comcast is also planning a major AVOD service for 2020 across its Sky and U.S. cable footprints, contending that a subscription glut — and billions in brand dollars looking for screen time — mean AVODs time has come.

Ever since Sony announced its plan to re-evaluate Crackles business last year, speculation had centered on either a sale or some form of partnership. In Chicken Soup, the company has found a partner with an array of existing streaming assets. Part of the new venture will be six owned and operated AVOD networks (Popcornflix, Truli, Popcornflix Kids, Popcornflix Comedy, Frightpix, and Espanolflix) and the SVOD platform Pivotshare, which is white-labeled for hundreds of partners.

Eric Berger, who led Crackle as part of a broader role at Sony Pictures Television, will depart the company upon the close of the transaction.

Shareholders clearly smelled a deal, sending Chicken Soup for the Soul shares up 18% on the Nasdaq. They closed at $9.50, giving Chicken Soup a market capitalization a bit north of $110 million. Sonys shares on the New York Stock exchange dipped 1% to finish at $42.40.

Financial terms were not disclosed. CSSE will control the majority interest in the new venture, with Sony receiving warrants to purchase stock at various price points.

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.

SPTs contributions to the joint venture include Crackles 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 TV series and movies from the Sony Pictures Entertainment library. 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 Crackles original content library will be retained by SPT but will be made available for licensing to the joint venture.

“Crackle is a valuable asset and we feel confident it will thrive and grow in this new environment with CSS Entertainment,” noted Mike Hopkins, chairman of SPT. “We were drawn to CSS Entertainment as our partner in this venture because of its agRead More – Source