Crackle parent Chicken Soup for the Soul Entertainment Sells Stock, Invests in Branded Streaming Service
Chicken Soup for the Soul Entertainment, parent company of streamer Crackle, is looking to cash in on its record high stock prices by selling 1.874 million shares at $40 each, to the tune of $75 million. The offering was hinted at previously, but no numbers were attached to the tease. The opportunity will end on July 7.
Proceeds from the stock sale are said to be invested in the development and premiere of Chicken Soup for the Soul’s own branded streaming services later this year.
Chicken Soup for the Soul has had a banner year, its stock prices more than tripling. 2019’s purchase of Crackle from Sony has clearly been a boon to their bottom line, and the company has also acquired longtime film and TV producer Sonar Entertainment, best known for Pierce Brosnan’s “The Son” and “Mr. Mercedes.”
Crackle, already a successful free service under Sony’s ownership, has continued to expand its reach in recent months and thus far looks to be a wise acquisition for Chicken Soup for the Soul Entertainment.
Crackle is a free video streaming service that includes on-demand access to movies and TV Shows.
Most of the content comes from Sony Pictures and its subsidiaries, including Columbia Pictures, TriStar Pictures, Screen Gems, Sony Pictures Classics, and Sony Pictures Worldwide Acquisitions.
Crackle also features “Crackle Original” series such as On the Ropes, Snatch, Going from Broke, Hidden Heroes, and The Oath.
Crackle is available on a wide variety of platforms including connected TVs, mobile devices, set-top boxes, video game consoles, and on the web.
In response to the expected 4% decline in stock prices when a company has a sale, Eric Wold, a B. Riley Securities media analyst said “we view this as a positive strategic move to position the company for additional content pursuits to both increase the attractiveness of the various AVOD services to viewers and to drive gross margins higher.”
Wold affirms that Chicken Soup for the Soul Entertainment “is well-positioned to benefit from attractive underlying AVOD service demand trends and a shift in advertising dollars.”
The company’s upcoming platform will largely serve families and female audiences, according to Wold, and will yield additional revenue in the form of additional advertising opportunities. The intended target audience will put this new streaming service up against Hallmark, who has already put in quite a bit of work presenting a diverse collection of channels as well as a new, free streaming movie channel to appeal to those looking for feel-good entertainment.
The stage appears to be getting set for a battle between providers of family entertainment as the crowd thickens.
Chicken Soup for the Soul, for many, still remains a name that people associate with a book series they might vaguely be familiar with, but the company is growing rapidly in the AVOD market. In the first quarter of 2021, they reported a 75% gain in revenue over the previous year.