Sony Pictures Entertainment recently announced that they have purchased a 5% stake in the Italian video on demand platform company, Chili SpA. They are just the latest big name Hollywood entertainment company to invest in the five year old company that looks to be be a major European rival to Apple’s iTunes.
The video streaming industry has been quite lively of late with many Hollywood and entertainment companies looking to diversify their holdings as the entertainment industry, especially the feature film industry, continues to struggle. Hollywood studios have been scrambling in the frightening wake of poor theater attendance and diving box office revenue, severely declining DVD sales and strong competition from such digital distribution forces as Hulu and Netflix. Purchasing on demand electronic television shows and films has been one of the few welcomed breaks in the storm for home entertainment. Spending for 2016 has been up 7.5% over last year to $1.46 billion.
Sony’s 5% stake cost them just over $3 million and it comes right on the heels of earlier investments by Warner Brothers and Paramount Picture’s parent company, Viacom. Also with a minority stake is one of the founders of the video on demand company, Vudu, Tony Miranz. Miranz has since sold Vudu to Walmart back in 2010. Neither Sony Pictures Entertainment or Chili SpA had any public comment regarding the investment. Chili’s current estimated market value is around $60 million and the company is expected to generate around $10 million in revenue for 2016.
Chili, based in Milan, has been around since 2012 and has been one of Europe’s leading VOD players having recently expanded into Poland, the UK, Austria and Germany. The television industry has been making great strides in Italy and it is predicted to do nearly $8 billion in revenue this year according to Bloomberg. That is up 5% over last year and includes both pay TV and advertising revenues.
PHOTO CREDIT: Reuters
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