Original URL: http://www.theregister.co.uk/2007/07/21/sony_launches_crackle/

The audience cackles as Sony launches Crackle

It's just Grouper regrouped

By Faultline

Posted in Media, 21st July 2007 08:02 GMT

Comment You may have heard that Sony has renamed the Grouper user generated website that it bought a while back for some $65m, as Crackle, and begun trying to drag its content into the professional zone by putting up minor amounts of content that Sony owns to make the professional level of the site stronger than, say, YouTube.

We knew when Sony bought the site that it put forward the idea that Grouper might benefit from Sony content, but it was never at the time made clear if the site would sell film content, advertise it, offer it as an advertising driven free stream, or use just 30 second clips.

Now that it has been made clear it has become what looks like a half thought out series of TV channels, made up of short chunks of comedy, pre-digested UGC, competitions, and lists of somebody else's favorites. It has competitions for animators, stand-up, and short films, with a chance to pitch the outcomes to Sony studios.

There might be the seed of a very good idea in there. At Faultline we have said that in the future studios will not spend huge amounts of money to bring untried series to TV broadcasting, but instead will rely on the internet proving the popularity of an idea first. But with the production values of this website, that doesn't seem likely to happen.

The entire approach shows how far Sony has it wrong with the front page Mr Deity, a group of short videos designed to demonstrate how crazy the idea of god is. That's really going to endear the site to the freshly Christian fundamentalist America.

But it's worse than that. Crackle has a design that must have cost all of $500, it uses outmoded typefaces, and is yet another attempt by a major content business to re-design something that is slightly cooler than YouTube, but just as chaotic.

The truth is that Crackle is Grouper by another name, run the by Grouper people with a view to harnessing the Sony content they think is cool. For $65m my grandma could have built a more engaging site and this is going to drive the traditional Grouper fans away, wrecking the investment and rapidly disillusioning an audience of what was 25 million monthly unique users.

None of that is much news. What is disastrous is the inability of Sony as an organisation to launch anything effective which harnesses its content, which includes around 8,000 films that have each made headlines on the theatrical release circuit over the last 40 years or so.

The films don't make it into the site. There is a small amount of advertising, no video advertising, and by renaming it Sony has probably done more harm to the purchase than either Google or Fox have done to YouTube and MySpace.

The release describes Crackle as a unique editorial strategy, using the Improv Comedy franchise, Sony Pictures Animation, Sony Pictures Imageworks, Columbia Pictures, Sony Pictures Television, Comedy Lab content and bills it as a launch pad for the best emerging video talent. Because the system will actually fund, promote, and syndicate new video creators, it is at least trying to create an underclass of professionals that make videos for UGC revenue share rather than for inflated Hollywood salaries.

In the end there are three ways to build a video website. Leverage existing traditional content; create entirely new forms of content; or index everyone else's content. Sony is an organisation that should be able to play at doing all three and should be well into the process already.

So far it has opened and now de-emphasised its Connect music service, without ever putting up a fight and promoting it. Or like Apple, being brave enough to make it a closed network, with only its own DRM working on the site.

It says instead it will move all activity such as Connect, including music, music videos, and films to the new PS3 networking site, but given that it has had about five years to create such a network, where is it? The network at present is entirely devoted to games, with hardly a major motion picture in sight.

If it really plans to drive all of this content to new Bravia TV sets, with web streaming and searching facilitated out of the box, then it will have to come up with a far more compelling proposition for online content.

How about a website that gives away all 8,000 Sony films, but which has a DRM that we shall call Sony Only, that works with only Sony Bravia TVs, Vaio PCs, PS3s and PSPs? How can there be anything wrong with that strategy, using content to sell hardware, a trick that has driven Apple's valuation to $120bn while Sony, a far larger company by revenues, sits with a lowly $52bn. Oh yes, Sony is in fact six or so interconnected businesses, and they will never agree to that.

As we said at the time, the Grouper acquisition is about as clearly thought through as the rest of Sony's strategy over the past four years – perhaps there was an idea there, but pretty soon it will have been forgotten in the panic.

The truth is that Sony doesn't have the share value or the cash to buy a market leader like YouTube, and instead has to tie its online efforts to less successful operations, and all the time it thinks that it cannot operate a lock-in, because it is frightened of being locked out of sites like YouTube or iTunes.

Perhaps if Crackle wasn't part of Sony Pictures but was owned by the camera group within its electronics division, it might at least be advertising its cameras on the site and make some sales. Because it doesn't look like it will monetise any content with Crackle.

Copyright © 2007, Faultline

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