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Why TV Companies Need To Become Tech Companies

Three thousand miles separate Silicon Valley from the headquarters of the major TV companies. But it may as well be three million miles, such are the differences in history, business model and outlook between the tech companies behind YouTube and Netflix, on one hand, and TV networks on the other.

One company that doesn't quite fit in either camp is Sony Pictures, the Hollywood unit of the Japanese electronics conglomerate Sony Corp. While it produces and distributes series for mainstream networks—“The Blacklist” for NBC and “Breaking Bad” for AMC, for example—Sony doesn't own any major TV networks of its own in the U.S.

That undoubtedly made it a little easier for Sony to launch Crackle, a free online video service, seven years ago. Over time, the outlet has gradually gotten some traction with movies, TV shows and some originals, such as Jerry Seinfeld’s “Comedians In Cars Getting Coffee.” Sony says Crackle draws 12 million unique visitors in the U.S. a month, still well short of Netflix’s 36 million U.S. subscribers.

Today, mainstream networks are creeping toward the over-the-top world, with HBO and CBS announcing standalone streaming services. Still, according to Crackle’s general manager, Eric Berger, the industry needs to do more. At a recent TV conference in New York, the Sony Pictures Television executive vice president called on TV companies to “become technology companies,” investing in Silicon Valley engineering talent and rethinking everything from marketing to scheduling decisions.

Mr. Berger has overseen Crackle since 2008, and since 2011 the digital operations for the company’s 120 TV networks around the world. Prior to joining Sony in 2006, he was a strategic planning executive with Time Warner. He talked with The Information about changes in television. Edited excerpts below.

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