Updated PnL Slides

Gulliver SmithersMay 25th 2017

Synopsis

In the last few years as the team rolled the product out on more devices we saw that consumer consumption patterns were shifting.

VOD gained popularity by offering a consumer-driven experience on PCs and mobile but was now coming back to the living room and challenging linear TV directly via streaming devices.

The response was to overhaul the Crackle consumer experience. The underlying hypothesis was that viewers would engage more with an experience which was able to provide the best of both the linear and on-demand worlds.

Some Facts

• Premium AVOD Service

• Part of Sony Pictures TV Networks

• Live since 2007

• Live in 20 countries

• Available in English, Spanish &

Portuguese

• Wide Distribution Footprint

Crackle is a Leading US OTT player

79%

37% 34%

21%

12%

3% 2%

Netflix Hulu AmazonPrime

HBO Go/HBO Now

Crackle None Other

Share of US Millennials Who Use Select Streaming Services

SOURCE: BI Intelligence US Millennials survey, Q3 2015, n=1,500

The only non-Subscription service

The Living Room is our Natural Home

69%CTV Audience

Lots of App Downloads

Mobile 40M

Connected TV* 26M

*does not include Apple TV, Amazon Fire TV

ONLINE

MOBILE

AIRLINESMVPD

GAMING CONSOLES STREAMING CONSOLES SMART TVs

Current Distribution Footprint

Where it Started: The Legacy Version

Hypothesis Behind Always On

• Linear TV is good for serendipity and continuity

• Users don’t want to spend a lot of time looking for things

• The service should immediately engage the user in the content

• Linear scheduling techniques can work for VOD

Product Development Process

We used the process to understand what users needed and how it differed by platform

PC

Development of Always On

PC & Browser

• Search and discovery

• Lean In

• Multitasking

• Personalization/Customize

Mobile & Tablet• Personal Experience• On-the-go• Want to Share• Shorter Sessions

Connected TV• Lean Back• High Quality

AV Experience• Co-viewing• Wanted to relax

Borrowing from Neuroscience

We Build our products and user experiences for the FAST BRAIN

SLOWMEMORY

LOGIC CONTROL

FASTINSTINCTEMOTIONREACTION

User Experience Approach

• Reduce number of decision points

• Avoid asking the user to think about things

• Make it intuitive & easy

• Be respectful of the usersneed state

A Different Scheduling Strategy

Curated Multiplex Channels Provide a consistent viewing experience across platforms

DaypartsOptimize content exploitation by

segmenting the day based on audience habits

Always On Experience Drop audiences into a specific,

engaging moment within a piece of content

Daily Thematic ProgrammingLets audiences know when and

where to find content day to day

Plus Original Programming

Dramas

Movies

Comedies

Wide Range of Movies and TV Series

Drama Comedy Action

AnimeFandomThriller

Used to Create Multiplex Channels

Channels are Explicitly Scheduled

TV Drama 1S2, EP3

TV Drama 1S2, EP4

MovieDrama

TV Drama 2S2, EP1

TrailerShort Clip

MovieComedy

TV Comedy 1S4, Ep4

TV Comedy 2S2, EP6

Drama

Comedy

Users Get the Best of On Demand and Linear

TV Drama 1S2, EP3

TV Drama 1S2, EP4

MovieDrama

TV Drama 2S2, EP1

TV Drama 1S2, EP5

TV Drama 1S2, EP6

Targeted recommendations allow viewers to easily follow a series or just relax and go with the schedule

Drama

“...to recapture the serendipity of stumbling upon something good on TV…” – The Wall Street Journal

Solution: The Crackle ‘Always On’ User Experience

The Always On Experience is Echoed on Mobile

With some good results:

• Total Time Spent in the apps has increased 14%

• Visits with 25% Video Completion have increased by 40%

• Visits with 50% Video Completion have increased by 43%

• Visits with 75% Video Completion have increased by 40%

What do we know for next time?

Lesson 1: It Worked

Streams Ads Watched Minutes

Lesson 2: Users Don’t Always Like Change

User Appreciation

Time

Cool feature release 2

Cool feature release 1

Cool feature release 3

MVP

Etc.

Lesson 3: The Organization Wasn’t Ready

organizations which design systems ... are constrained to produce designs which are copies of the communication structure of these organizations— M. Conway

BuildDesign

Solution

DefineProduct and

RoadmapTest

Delivery ManagementProduct Management

Release to Live

User Experience & Design

A Change Was Required

We Reorganized

Product QA & TestUX & Design

Delivery Management

Oversight

Solution Design

Reach

Retention

Revenue

Software Engineering

We Aren’t Done Yet

This Week on Crackle..

New Advertising Approach

Continued International Expansion

Improved User Experience

Thank You