Looks like the video services war in the U.K. just produced its first casualty: Sony (S SNE) is closing down the U.K. edition its Crackle video service on April 1 (hat tip to Broadband TV News). The company posted a notice about the closure on Crackle’s U.K. homepage that read:
“We’d like to thank all those who have supported and enjoyed Crackle UK. As of April 1, 2014 Crackle’s UK service will no longer be operating.”
Crackle is offering viewers free, ad-supported video content, including full-length movies and TV show episodes. The service also operates in the U.S. as well as Canada, Australia and close to 20 countries across Latin America, and those operations aren’t affected by this closure.
The decision to close up shop in the U.K. seems to be related to the increasingly competitive market in that country. Netflix (S NFLX) entered the U.K. two years ago and hit an estimated 1.5 million subscribers by last summer. Amazon (S AMZN) has been fighting back by more closely aligning its Lovefilm service with its core brand.
Both companies have also tried to outbid each other on content rights for British viewers, undoubtedly raising the costs for Crackle and any other third-party service to compete. And in the case of Crackle, Sony also had to monetize the service through ads, which may be even harder in a comparably small market like the U.K.