Sony Pictures Television and Chicken Soup for the Soul Entertainment have signed a definitive agreement to establish a new streaming video joint venture to be branded Crackle Plus.
Chicken Soup for the Soul Entertainment is a new media company building online video-on-demand networks. SPT and CSS Entertainment will each contribute certain assets to establish Crackle Plus and position the new company as an 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 US 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, 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 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 US.
“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 aggressive, entrepreneurial approach. The CSS Entertainment team have the enthusiasm and strong business acumen to ensure Crackle Plus is poised to maximize the growing opportunities in the AVOD marketplace.”
“This transaction positions CSS Entertainment as a leader in the high-growth AVOD business,” said William J. Rouhana Jr., chairman and chief executive officer of CSS Entertainment.
“Creating a new platform that brings together CSS Entertainment’s VOD assets with SPT’s Crackle brand and AVOD assets, establishes a compelling offering for viewers and advertisers. Consistent with our business plan, we plan to build Crackle Plus aggressively and profitably through organic growth and, potentially, acquisitions.”
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.
