Sony Pictures Television just sold “Seinfeld” episodes to Netflix in a whopping five-year, $500 million deal for the global streaming rights.
All this happened after WarnerMedia (with its “Friends” series) and NBCUniversal (with its “The Office” series) announced those shows will be leaving Netflix in 2020 and 2021, respectively.
Now, you might be thinking: Don't TV content owners want to have their own streaming services, including Sony?
You would be correct. And, if you are current with your TV industry news, you know Sony has been operating a modest-size advertising-streaming service since 2007 called Sony Crackle, which was formerly Crackle and formerly Grouper.
Sony Crackle, which changed its name in January 2018, has as its major claim to fame an original little comedy-tinged reality interview show “Comedians in Cars Getting Coffee” with Jerry Seinfeld. Crackle also aired “Seinfeld” reruns.
In U.S. syndication -- from 1995 to 2017 -- it is estimated “Seinfeld” pulled in $4.1 billion in license fees from TV stations and cable TV network TBS. In 2018, the “Comedians in Cars Getting Coffee” series also moved over to Netflix, in a deal worth $100 million.
Why deal “Seinfeld” to Netflix? No surprise there. Sony Crackle isn’t close to the size of a Netflix -- 60 million in the U.S. and 150 million globally, compared to just around 10 million “active users” in the U.S. for Sony Crackle. We can surmise “Seinfeld” can’t bring in what amounts to $100 million a year for five years on Sony Crackle in term of advertising or other revenue.
Scale is everything -- which is why Walt Disney’s Disney+, WarnerMedia’s HBO Max and now NBCUniversal’s Peacock have analysts salivating over big subscriber numbers in a few years after launch, says 30 million to 40 million or more.
In the first quarter, it was publicly disclosed Sony Crackle took in revenue of $11 million. Netflix? Just a mere $4.52 billion.
Still, Sony has been looking at the changing streaming environment -- and in part has focused on the name.
Crackle -- while a cute entertainment moniker -- might not mean much to consumers. But perhaps adding the Sony brand name will change things. It may keep it competitive in the premium streaming video race, along with other new efforts by big entertainment names.
Digging deeper, all this has forced analysts to hotly debate the value of whether TV/movie companies should keep their big TV and movie content or sell it to the highest bidder?
One thing is certain. Unlike the show Jerry and George pitched to a network exec, "Seinfeld" isn’t "a show about nothing.”