Sony Pictures Television is looking for a strategic partner to grow its streaming video service Crackle, which has struggled for years to compete in the fast-growing online video market.
The Culver City-based studio has hired investment bank Moelis & Co. to explore potential deals to sell a stake in Crackle, according to two people familiar with the matter who were not authorized to comment.
Moelis began reaching out to companies, including other streaming services and entertainment firms, on Monday, the knowledgeable people said.
It is not clear how big of a stake Sony is willing to sell, or what price the Japanese-owned company will seek. Sony is in the early stages of searching for an investor but hopes to complete the process in the next couple of months.
Sony does not want to sell the whole service, the people close to the situation said.
Crackle, which is available for free and makes money from advertising, has been part of Sony since 2006, and is considered an important part of the studio’s digital video strategy. However, the service has been overshadowed by video giants such as Hulu, Netflix and Amazon, which are spending billions of dollars on original movies and shows.
“Crackle is a tremendously valuable asset for us, and ... we feel there is room for greater growth for our [over-the-top] business,” Sony Pictures Television Chairman Mike Hopkins said in a note to staff obtained by The Times. “With the right partner — one that could bring additional content or users or leverage existing assets for advertising and promotion — we feel we can expand Crackle’s audience and significantly increase revenue.”
A Sony Pictures spokesman declined to comment.
The Crackle move is part of a broader effort by Hopkins, the former Hulu boss hired last year by Sony Pictures Entertainment Chief Executive Tony Vinciquerra, to remake the studio’s television business so it can better adapt to the changing entertainment industry.
The studio last month merged its television networks, home entertainment and distribution businesses under one executive, a restructuring that resulted in layoffs. It also created a new direct-to-consumer unit to house Crackle and other streaming holdings, including animation outlets Animax and Funimation. The digital division is run by Sony executive Eric Berger.
Crackle was hit with about a dozen layoffs in May when the service consolidated its ad divisions as part of Sony Pictures’ broader push to streamline. Crackle has about 130 employees, according to the company. The studio does not disclose revenue figures for Crackle.
Sony wants to double or triple Crackle’s traffic annually, and executives have decided that making a deal with another company would be the most efficient way to spur growth, the sources said. Crackle currently draws 5 million monthly unique visits.
Sony Pictures, owned by Tokyo-based electronics giant Sony Corp., is considering multiple options to boost the service’s standing.
The studio, for example, may partner with another advertising-supported streaming service to increase the number of shows produced for Crackle and drive more users to the service. It could also forge a deal with a media and entertainment company with a robust film and TV library, or a telecommunications firm with direct access to millions of mobile phone and broadband users, the people close to the situation said.
The company has been contacted by three or four interested parties in recent months, the people said.
Sony bought Crackle 12 years ago, when it was a video-sharing site called Grouper, for $65 million. The name changed to Crackle in 2007.
Crackle’s original shows include “The Oath,” a crime drama executive produced by rapper Curtis “50 Cent” Jackson, and “SuperMansion,” an offbeat stop-motion animated superhero series by Stoopid Buddy Stoodios (“Robot Chicken”).
Crackle was previously best known as the home of Jerry Seinfeld’s popular webseries “Comedians in Cars Getting Coffee,” which premiered on the service in 2012. However, the show moved to Netflix last year as part of the Los Gatos, Calif., tech and entertainment giant’s larger content deal with the legendary comedian.
4:25 p.m.: This article was updated with additional background on Crackle.
This article was originally published at 1:05 p.m.