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Sony veers away from video sharing

Grouper, the site Sony paid $65 million to acquire last August, is switching names and business models. Say hello to Crackle and good-bye to user-generated video.

YouTube's dominance in video sharing has prompted Sony to take a new approach to the sector.

Grouper, the video-sharing site acquired by Sony last August for $65 million, announced on Monday that it is dropping its name and changing its business plan. Grouper from here on out will be known as Crackle.

"User-generated video is dead to us," declared Josh Felser, Grouper's founder who is now Crackle's president. "We are definitely leaving video sharing and focusing on emerging talent."

In the past, visitors to Grouper could post videos to the site and eventually the most popular clips would appear on the front door. Who says a site has to sit back and wait for entertaining videos? Crackle intends to collaborate with creators to help develop hits. By funding, promoting, and syndicating work from talented videographers, Crackle wants to become the Internet's version of a movie studio, according to Felser.

Crackle appears designed to use Sony's marquee name, bulging coffers and film-making expertise to lure the Web's most skilled movie makers. The thinking is that once the quality of the content rises, so will the number of viewers, Felser said.

This is not new. Plenty of video sites, such as Revver, Google Video and Metacafe, have dangled offers of cash or a share of advertising revenue. At best, the results have been mixed.

What's different about Crackle is that site is s offering budding directors a chance at the big leagues.

According to Felser, Crackle will introduce the best movie makers to Sony Pictures executives, syndicate their work on the PlayStation Portable, Bravia TV sets and other Sony properties, and fund some of the production costs for innovative ideas.

"We can offer the pathway to Hollywood and fame," Felser said.

As for what went wrong with Grouper, Felser said that everybody except YouTube has had to rethink the business model for video sharing.

"The same content is on every site," Felser said. "Equally as important, you can't monetize it. Advertisers don't want to be associated with unpredictable content."