José Rivera Font, VP & General Manager, Crackle, spoke exclusively to NexTV News Latam about the new strategy of the streaming platform in Latin America. In November 2016, Crackle changed its OTT offering from a free, ad-supported service to an authenticated service offered by Pay TV operators.
-Why did you decide to change the strategy in the region?
Five years ago, when we launched Crackle in March 2012 this market was very new, only Netflix had launched its service (in September 2011). We did not understand the dynamics of Latin America, this was a project destined to learn, to fill the existed demand of Hollywood Premium contents. However, the penetration of smart devices and broadband was not as advanced as today, and the cost of materials in dollars has changed a lot. With the emergence of the OTT market, users learned about on-demand use. And the operators want and need more rights for their VOD services; this is why we changed the focus, because the OTT SVOD market established as an important and fast growing business and because our partners needed more digital rights.
We offer the service in a simple and flexible way for the operator. We do the licensing of the content, the development of the applications, and we offer the streaming. This is interesting for the operator because it does not have to invest in developing these rights or platforms; we share the profits we generate. The role of the operators is to gain and maintain users and our role is to offer the streaming of the network.
-What is the marketing model?
The operator decides whether to sell Crackle as an independent service to increase its subscriber base or as a complement to other services. Some of the operators want to attract millenials with a standalone product, some others have broadband clients with more than 20 Mbps, for example, and offer Crackle at no additional cost for this users. Other operators will have a hybrid of the two models.
– Have you signed new agreements with Latam operators?
We have already announced partnerships with Totalplay in Mexico and with Oi in Brazil. We have 26 agreements signed that we are going to announce as they are launched. We have dozens of others that we are finishing. It works because they are contents that the operators want and need for their users, who are demanding to have this type of services. In addition, Sony is qualified to offer not only exclusive and licensed regional content, which makes it less expensive, but also the global infrastructure for developing applications. If an operator does not have its own OTT platform but want to be at competitive level with other pay TV services it has Crackle in favor. We are offering them very reasonable costs so they can go to the market with a very positive price and profitability.
With these new agreements we are covering practically all Latin America, we are licensing the contents so that we can offer them throughout Latin America with the exception of the countries that are territories of the U.S (Puerto Rico, US Virgin Islands).
-Have you considered launching Crackle as a standalone service?
We are part of the ecosystem. We have massive distribution of our networks in the region through these operators; we want to exploit these franchises, to benefit both the user and the operator. What is interesting is that the payment method, the knowledge of the market, the marketing channels, the ease that operators have to reach certain audiences, facilitates the business because we want to be complementary to what they are offering, otherwise we would have to do it directly, just as pure OTTs do.
We want to make the pay TV offer stronger because we are in this business, we have a substantial business in the region, and that is why we offer the service exclusively through pay TV operators.
-How do you see the OTT market in Latin America?
The Premium content is now more accessible to more audiences; there is a dynamic that is emerging and is that many users are sharing their passwords, that is why OTT penetration has become easier. Users are testing, experimenting and viralizing the services, and that helps us all. And users are having access to contents in a first window model.
-What is the content strategy?
We have three pillars: one of them is the original content of Crackle, such as the TV series “Preacher”, “The Art of More”, “Start Up” and the animated series “SuperMansion” (with the voice of Bryan Cranston). These are only four examples, we will be launching this year 10 Crackle originals.
We also have hit series of our networks in the region. We will add complete seasons of “NCIS”, “Code Black”, “Scorpion” and “Criminal Minds”, among others.
In addition, we have blockbuster movies from different Hollywood studios. We do not pretend to have a giant library with thousands of titles but a very select one, and offer it at a very attractive value.