Sony has decided to get rid of Grouper, the user-generated video site akin to YouTube. Instead they’ve revamped and rebranded the site as Crackle, a virtual online movie and television studio. The idea Sony has is to get out of the user-generated video business and create an entertainment network. The videos being created will no longer be amateurish. Professionals, mostly up and coming filmmakers, will produce these videos.

The reason Sony gives for the move is that user-generated content sites do not work as a business model anymore since YouTube has the entire market share. In order to compete in the growing Internet video market Sony feels they need to provide original professional content to users. The plan is to release content that is “officially” backed by Sony and their powerful marketing abilities. So Crackle is going to operate like a television broadcast, complete with advertisements and different channels. According to Sony the advertisements are not run on the Crackle website, but instead appear within the player itself. Anyone who embeds video on a blog – or elsewhere – will retain the ads as part of the video.

Crackle is going to offer different genres of video like “Judgment Day” for reality show programming, or “High Wire” for stand up comedians. There’s a wealth of variety, but what’s not clear is how you get chosen as a Crackle contributor. The filmmakers aren’t the big names you already know; these are still the little known entities out in the world. Sony will reward the best content providers with prizes like pitch opportunities to Sony and Columbia Pictures or even cash ranging from a few hundred to $10,000 for each contest. So in essence Crackle remains a user-generated content site, only with official backing by Sony rather than letting things run wild. Time will tell if the talent scout format is a viable business model for Sony, but at least they’re trying to do something a bit different than YouTube.

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