Sony Will Invest in Chili, Italian Rival to iTunes

Sony has acquired a minority stake in Chili, an Italian video-on-demand platform whose investors include some of the biggest Hollywood film studios, according to Bloomberg. Sony bought about 5 percent in Chili for about 3 million euros, taking a stake in a service that seeks to compete with Apple’s iTunes, said the people, who asked not to named because the deal is private. Chili has an enterprise value of about 65 million euros and is expected to generate sales of about 10 million euros this year, according to one of the people.

Hollywood studios have struggled to adapt to collapsing DVD sales, dwindling box-office attendance and competition from digital distributors like Netflix. Electronic purchases of movies and TV shows have been a bright spot in the U.S. home entertainment industry, with spending up 7.5 percent to $1.46 billion through nine months of 2016, according to the Digital Entertainment Group. A representative for Chili declined to comment. Representatives for Sony Pictures couldn’t immediately be reached to comment outside of regular business hours.

Driven by the success of its offering in Italy, Chili has expanded to the U.K., Poland, Germany and Austria, according to its website. Paramount, Viacom and Warner Bros own about 14 percent of Chili, which was founded in 2012, according to the people. Tony Miranz, the co-founder of video-on-demand company Vudu, also owns a minority stake. Miranz sold Vudu to Wal-Mart in 2010. Italy’s television industry will generate income of about 8 billion euros this year, growing about 5 percent from 2015, according to ITMedia Consulting. That includes advertising sales, Italy’s state license fees to TV Rai and pay-TV revenue.