A team in Silicon Valley originally created Grouper in 2004 with the intention of providing free online entertainment. Two years later, Sony Pictures saw promise in the idea and acquired the company, renaming it Crackle.
Under Sony’s leadership, Crackle boldly grew its catalog with popular movies and TV shows. Viewers could also enjoy original programs.
This variety, along with no subscription fees, attracted a growing audience. Crackle supported itself through advertisements played during videos.
One viral original was Jerry Seinfeld’s talk show. Fans loved watching the legendary comedian casually chat with other comedians over coffee.
By 2012, Crackle had also spread internationally. Millions enjoyed its library and shows without costly subscriptions.
Meanwhile, competitors like Netflix charged monthly fees; hence, Crackle flourished by making entertainment accessible to all.
During its peak around 2012, Crackle offered something for every taste, including comedies, dramas, and exclusives, giving viewers countless options.
The onset of troubles
However, despite early wins, Crackle found maintaining success difficult. Other ad-supported streaming options like Pluto TV and Tubi drew away viewers. Sony started searching for ways to pass the platform on to new owners.
In 2019, Sony Entertainment sold most of Crackle’s shares to Chicken Soup for the Soul Entertainment (CSS Entertainment), forming a joint venture called Crackle Plus. CSS Entertainment aimed to build ad-supported streaming services through deals like this.
Under CSS Entertainment, Crackle continued but didn’t regain its past popularity.
Sony had kept a small share of the platform until late 2020, when it sold the remaining shares, giving CSS Entertainment sole control.
By this point, Crackle’s audience had significantly shrunk. It struggled to compete against larger, better-funded streaming competitors.
What really happened to Crackle?
By 2023, CSS Entertainment’s financial situation had severely deteriorated.
That year, the firm reported a staggering loss of $636.6 million in its annual report. This massive deficit understandably raised significant concerns about the company’s ability to continue operating.
Despite attempts to branch out, the financial troubles persisted. One such effort was launching an advertising sales division called Crackle Connex to generate more revenue streams.
However, the core streaming business faced ongoing challenges as the costs remained high to run all the platforms and produce new content. Revenue did not keep pace needed to cover expenses.
CSS Entertainment files for bankruptcy
The situation came to a head in June 2024. CSS Entertainment missed payroll obligations, unable to cover employee salaries and wages.
Attempts to obtain emergency financing also proved unsuccessful. With costs continuing to exceed revenue and no other alternatives available, CSS Entertainment had no choice but to seek court-mandated protection.
The entertainment company filed for Chapter 11 bankruptcy on June 29th, hoping this process would provide needed breathing room.
This chapter of bankruptcy offers some temporary relief by allowing the reorganization of obligations while permitting essential business activities to continue on a restricted basis.
The goal is to buy time to work out a viable strategy for repayment or restructuring with stakeholders.
The following month, the U.S. Bankruptcy Court approved converting the filing to Chapter 7. This signaled CSS Entertainment would begin an orderly liquidation of assets, as rehabilitation appeared unfeasible.
This marks the beginning of the end for CSS Entertainment’s various subsidiaries and platforms.
Crackle continues operating, but for how long?
Despite the bankruptcy and uncertainty around its ownership, Crackle’s streaming services have continued without interruption.
As of September 2024, the platform maintains its library of movies and TV shows available for users.
CSS Entertainment’s significant debts mean all its assets must be sold to pay back creditors, and there is little chance of outside investment now.
Further complicating any revival is a class action lawsuit against CSS Entertainment’s CEO.
Employees allege fraudulent payroll deductions and canceled benefits in a “Ponzi scheme.” Such legal issues diminish hopes of financial restructuring to keep operations going.
Unless an acquirer values Crackle specifically enough to maintain it as is, the platform’s continuous operations may only reflect the business winding down, with an unclear future beyond the court-mandated asset sale process.
But for now, fans can continue enjoying the service as discussions play out behind closed doors over its long-term fate.
Only time will tell if Crackle can be rescued or if this iconic streaming platform will ultimately shut down.