Grouper, the second- largest video-sharing Website behind YouTube, has abandoned the user-generated-video (UGV) business.
Nearly a year after Sony Pictures Entertainment (SPE) spent $65 million to grab Grouper, the service has switched to a deep-pocketed streaming syndicated entertainment network—a move that executives say gave it 25 million unique users in June.
Also gone is the Grouper name. The service will relaunch as Crackle on July 16, although an outside ad campaign touting the rebranding will wait a week to iron out kink.
“We are getting out of the UGV business, which is a pretty radical step for us,” says Josh Felser, founder/co-president of Grouper. “It is not a business for us. The content is rarely exclusive, and it is hard to monetize.”
Advertisers, he adds, don't want their spots running next to large objects falling from roofs, a frequently heard complaint about such UGV sites.
The makeover had been part of the plan even prior to Sony's August 2006 acquisition of Grouper. Sean Carey, senior executive VP of Sony Pictures Television (SPT), and Felser say they saw the UGV business as a short-term phenomenon.
Crackle will produce content in-house but will largely draw on professional-quality amateur video submitted by outsiders and filtered through an experienced 15-person staff.
Original shows in the works include Judgment Day, in which people who judge strangers find out if their assumptions are right, and Scrambler, a rock-video music magazine. Crackle has also ordered a second 10-episode season of Mr. Deity, a popular online sitcom set in heaven.
Four of its dozen branded channels will give a few contest winners a shot at fame, awarding them access to the site, as well as to the creative executives, resources and checkbooks of Sony's animation, Imageworks, movie and TV divisions. The Improv comedy clubs have also signed on, and Felser says there will be many more outside talent sponsors.
Felser was among a group that started Grouper in January 2004 as a pure video-sharing service for friends and family. But the desire to take the site further upscale was tempered by a lack of funding, until the Sony sale.
Over the past six months, under Sony's stewardship, a bells-and-whistles site has been under construction.
Sony will provide Crackle with a mid-seven-figure production budget, allowing it to produce exclusive Web-only content in the $2,000-$28,000–per–episode range, although most will be on the low end. The service caters to short attention spans, with each episode shorter than five minutes.
An embedded media player will enable Crackle to syndicate content to third-party IPTV, social-networking and viral Web distribution sites, including MySpace, Facebook, hi5, AOL, Piczo and WordPress, as well as various Sony devices. Most will involve revenue-sharing.
Felser differentiates Crackle from several sites promising users fame that existed before the Internet bubble burst. He says the previous models never fully explained how they would make that happen, in contrast to Crackle, which has put tangible methods in place.
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