Sony's Bet on Sticking With Web Shows
Article by Brooks Barnes for the New York Times series The Sofa Wars about media, cable and technology companies fighting for consumers' screen time, and their money, as viewing habits grow more unpredictable.
At first Hollywood raced to make original Web programming. NBC Universal trumpeted a site called DotComedy; the Walt Disney Company created a digital studio called Stage 9; and Time Warner backed SuperDeluxe, another comedy site.
That was about three years ago. When substantial revenue failed to materialize quickly, the big entertainment companies hit the brakes, preferring to stick with what they knew best: the making and marketing of movies and television for traditional outlets.
There was a notable exception. Sony Pictures Entertainment has continued to pour money into Crackle.com, ordering Web shows that cost up to $1 million each. Why is Sony still betting so big? For one, it thinks it has hung around long enough to learn important lessons about consumer psychology when it comes to the Internet. But Sony also has a potential ace up its sleeve when it comes to funneling Crackle video to TV sets.
Analysts point out that Crackle could become the primary entertainment channel for Sony's PlayStation Network, a fast-growing video service that pumps games and online content into the living room via PlayStation 3 consoles.
Crackle, which has been gasping as a stand-alone Web destination, would be a perfect fit with the PlayStation Network, analysts say. Crackle is aimed at men age 18 to 34 -- the same crowd that devours video games.
Crackle already has a limited presence on the PlayStation Network, but Sony executives confirm that an expansion is in the works.
With 50 million registered accounts worldwide, the network "offers a great deal of scale that is terrific from an advertiser perspective," said Eric Berger, Sony Pictures Television's senior vice president for digital networks.
As they work to make Crackle profitable, Mr. Berger and his boss, Steve Mosko, president of Sony Pictures Television, see an opening for Crackle to attract more ad dollars while other video sites -- namely Hulu.com -- focus more intently on a subscriber model.
That is a reason that Crackle's original programming is costly by Web standards: Sony knows that advertisers want to display their products next to pretty programs.
To succeed with advertising alone is extremely difficult -- just ask Hulu -- so Sony is using its broader distribution system to sell Crackle content on DVD, to cable on-demand services, and, in some cases, to cable networks. The sales make up about 50 percent of Crackle's revenue.
Mike Vorhaus, the managing director of new media for Frank N. Magid Associates, a media consulting firm, used a baseball analogy. "They're having to string together a lot of singles and doubles to make their numbers," he said. "The challenge is to keep your costs low enough to stick around until you reach critical mass."
Indeed, despite rapid growth, Crackle remains a minor player in the crowded online video field. In July, it had about 4.1 million unique viewers who watched an average of 39.4 minutes of video, according to comScore. To compare, CollegeHumor.com, which also aims at young men, in July had 1.5 million unique viewers who watched an average of 10.2 minutes of video.
Sony needs Crackle to pop in part because the conglomerate has a dismal record with digital media sites. It was the primary proponent of Movielink, a failed on-demand service. It missed again with Sony Connect, an online music service intended to compete with Apple's iTunes store.
When Sony bought Crackle, originally called Grouper, for $65 million in 2006, the idea was to make the site an online version of what Sony does not have in the United States: its own channel.
But problems sprouted almost immediately, including an expensive lawsuit and high executive turnover. Crackle has gained traction only recently under the tutelage of Mr. Mosko.
Mr. Vorhaus says that it is easier to get noticed when most of your rivals have left the business. The closest remaining studio competitor to Crackle is TheWB.com, a site operated by Warner Brothers that offers some inexpensive original programming but relies primarily on reruns of "Gilmore Girls" and "Friends."
Most Hollywood studios failed at webisodes because they pulled the plug too quickly on programming that did not appear to catch on after a few installments, says Mike Hudack, chief executive of Blip.tv, a distributor for Web series.
On TV, it is possible to tell whether consumers are responding to a new program within three or four episodes. On the Web, it takes more like 15 or 20, he said.
"A lot of early attempts by traditional studios rang false because they were using TV standards and style but weren't willing to spend," Mr. Hudack said.
Sony was initially guilty of that approach. But Mr. Berger and Mr. Mosko are confident they have learned enough about what consumers like on the Web to start making bigger strides.
One surprise has been the degree to which consumers will watch long-form video online or even on mobile devices.
Crackle introduced movies about a year ago -- the 250 selections include "Snatch" and "The People vs. Larry Flynt" -- and was stunned to find that mobile visitors to the site watched movies an average of 26 minutes; about 20 percent finished the movies.
Another discovery: Stars matter. Initially, studios stocked Web series with the cheapest talent possible, figuring that if young people could accumulate millions of views on YouTube, a no-name actor could certainly do the same. But just as in traditional media, famous people have a way of cutting through the clutter.
So it is no accident that two forthcoming original series on Crackle are brimming with marquee names. "Held Up," about a bored bank teller, was directed by Steve Carr, whose big-screen credits include "Paul Blart: Mall Cop." "Backwash," about three eccentric losers who travel by ice cream truck, features John Stamos, Allison Janney and Jon Hamm.
Sony has also learned that serving up webisodes on a sporadic basis -- as the site Funny or Die does -- fails to build a consistent audience. The flow of original material has to be constant.
"There are some sites that see traffic surges around a piece of content (original Web-based entertainment video)," Chris Silbermann, president of International Creative Management, wrote in an e-mail.
"But long term," he added, "it just doesn't make a huge impact, nor is it very monetize-able. They're more like the funny pages in a newspaper than a sustainable business."
More recommended articles from this series:
In the Living Room, Hooked on Pay TV
By Matt Richtel and Brian Stelter
Despite the proliferation of Internet video, few Americans are actually canceling pay TV and watching shows online.
D.I.Y. TV: How Are You Watching?
By Jenna Wortham
Although still in the minority, some TV viewers are ditching pricey cable subscriptions and cobbling together programming from the Web and other sources. Have you cut the cord? Why or why not? Talk back on TuTube to discuss with other NALIPsters!
Deadline Extended: NLMC Television Writers Program
The NLMC Television Writers Program has extended its submission deadline to September 20. Don't miss the opportunity to apply for this program which has successfully placed over a dozen writers in television networks.
The NLMC Writers Program is not for beginners. It is for those writers who can write at least one half-hour comedy or one-hour dramatic television script in English within a five-week period of time.
The program will take place in Burbank, CA from November 8th to December 10th. Each participant is expected to complete at least one script by the end of the five-week session, which will then be read by network executives. Those writers whose scripts show promise will be interviewed and mentored by the network executives with the idea of placing them on a show.
A stipend of $250 per week will be given to each participant. Flight, housing, and meals will be provided.
To download program application and release forms, please visit the NLMC Television Writers Program website.
Deadline Approaching: PaleyDocFest Pitch Workshop Contest (NYC)
The deadline is approaching for the PaleyDocFest Pitch Contest, which offers a $5,000 grant, sponsored by SnagFilms, for an unfinished or work-in-progress documentary from an emerging filmmaker. The Paley Center for Media is using this contest, now in its seventh year, to choose five finalists who will pitch their unfinished films to a panel of experts and producers in front of an audience. This event, the PaleyDocFest Pitch Workshop, will take place on Saturday, October 16, 2010, in New York as part of the Paley Center's eleventh annual documentary festival.
Late deadline: Sept. 7, 2010 ($30 / $25 for Withoutabox members)
Withoutabox extended deadline: Sept. 14, 2010 ($45 / $30 for Withoutabox members)
For details and submission information please visit the PaleyDocFest Pitch Workshop Contest webpage.
New Special Low Rate for WESTDOC
Economic times are harder, there's no question. We've received dozens of calls and e-mails asking for larger discounts. We thought of ways to accommodate our delegates without sacrificing the quality of the event. With over 110 speakers, 30+ panels, cocktail parties, and much more, it's proven to be a challenge - but we finally arrived at a solution!
If you're interested in attending WESTDOC but need a break, we've got your discount. The "Mit Out Lunch" rate will include the full WESTDOC pass except lunches at the hotel. Without lunch, we can offer you a rate of: $595.00
Use "MOL2010" for our new special low rate, good until September 1st when rates go up.
If you are interested in attending WESTDOC with our Networking Lunches, we are happy to still offer NALIP members our 15% Discount off the regular price using "NALIP2010"
Register now at: www.theWESTDOC.com
WESTDOC 2010 is being held at the Doubletree Suites Santa Monica and is 10 minutes walking distance from the new spectacular Santa Monica Place and The Third Street Promenade where there are dozens of eating establishments.
PitchFest Finalists Announced!: Twelve talented producers were selected as the finalists for PitchFest. Set aside Wednesday for a day you won't soon forget. Great pitches in front of a live audience and the winner decided by the audience! This year we also are awarding cash prizes of $7,500 courtesy of The Gilbert Group At Bank Of America, Merrill Lynch. These New works in progress finalists include: Xmas Without China, Trash Dance, License to Pimp, Nature Nurtures Autism, Surviving Earth, All American Aviators, Cost of Construction, Eye of the Storm, The Home Cooking Show, Indie Game: The Movie, Visionary States and Job Hunters.
Opening Night Film: A special preview screening of the controversial 2010 Sundance Film Festival standout, Catfish kicks off WESTDOC Sunday, September 12th at 6:30pm. WESTDOC participants will see the much-buzzed about documentary before its national release.
Speakers: More than 100 speakers this year! New additions include: Peter Broderick; James Ackerman, Pres. and CEO, Documentary Channel; Ed Hersh, SVP Strategic Planning, ID & Military Channel; Laura Fleury, VP Non-Fiction & Alt Programming, A&E Network; Izzie Pick, SVP Program & Development, BBC Worldwide; Kris Slava, Senior VP, Ovation and many more....
The Sit-Down: 30-Minute overviews of both networks and production companies outlining what they want today and, more importantly, what they're looking for tomorrow. Discovery Studios, ESPN Films, Discovery Channel, Animal Planet, Lonely Planet, TLC, Style, Ovation, TV Land, Spike, I.D. Investigation Discovery, GSN, ABC, SyFy Network, Military Channel, Bravo, Authentic Entertainment, Pilgrim Film & Television, Film Garden, Reveille, LMNO, 3 Ball Productions, Mark Burnett Productions, A. Smith & Co., Bunim-Murray Productions and many more...
Call for Shorts: Framepool Filmmaker Event (LA)
Calling all filmmakers, Framepool Motion Content needs you! We are hosting our first in a series of filmmaker events at LA's hottest new members club soho house.
On September 9th between the hours of 2-6pm we are looking for filmmakers to show their short films (between 30 seconds to 10 minutes long) and provide a brief Q&A session to an invite only film industry audience of around 50 people. Content can cover any subject (within reason).
If you would like your short film to be included, then please submit an email with a description of your film and a link to watch it. We hope to meet you for drinks and great company at this wonderful space.
Valet parking, light bites and refreshments provided all free of charge, plus the opportunity to network with like minded individuals.
Please email us your film submission not later than August 30. Direct your email to: email@example.com