chili award write up
TRANSCRIPT
2017 European Over-the-Top Video Entrepreneurial
Company of the Year Award
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© Frost & Sullivan 2017 2 “We Accelerate Growth”
Contents
Background and Company Performance ...................................................................................... 3
Industry Challenges ........................................................................................................... 3
Entrepreneurial Innovation and Customer Impact .................................................................. 3
Conclusion ........................................................................................................................ 6
Significance of Entrepreneurial Leadership .................................................................................. 7
Understanding Entrepreneurial Leadership .................................................................................. 7
Key Benchmarking Criteria ................................................................................................. 8
Entrepreneurial Innovation ................................................................................................. 8
Customer Impact .............................................................................................................. 8
Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ...... 9
The Intersection between 360-Degree Research and Best Practices Awards ....................................10
Research Methodology ......................................................................................................10
About Frost & Sullivan .............................................................................................................10
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Background and Company Performance
Industry Challenges
The media and entertainment industry in Europe has been undergoing momentous
technological and structural transformation over the last 5 years, giving the end consumer
unlimited choices in terms of content, price, platforms, and service providers as content
consumption shifts from linear to non-linear. Burgeoning over-the-top (OTT) services, with
more than 400 service providers across Europe, has resulted in a crowded marketplace
where everyone is fighting for the consumer’s time and share of wallet.
Competition has further intensified with the entry of global players including Netflix and
Amazon that have gained instant favor with viewers through aggressive marketing
strategies and popular international content. The popularity of OTT services amongst
viewers has prompted telecom providers, broadcasters, and pay TV operators to enter the
market with their own services; consequently, native OTT service providers, which have
smaller teams and financial power, have to resort to innovative strategies to differentiate
themselves from the big names.
The need for innovative differentiating points has given rise to niche service providers that
target a specific audience segment, such as expats or children, with content distinguished
by genre, language, picture quality, or other factors in order to avoid direct competition
with the big players. However, this is not an easy route to take because of the difficulty in
getting access to premium content, especially new movies.
Piracy is another cause of trouble to service providers in the region since it eats into the
already-thinning subscriber base and revenue. Very few native OTT service providers are
able to directly compete with international names and gain a significant market share.
Entrepreneurial Innovation and Customer Impact
CHILI, a European video-on-demand (VOD) service provider, enables viewers to rent or
purchase content from a vast catalogue of movies from around the world to view on
multiple screens. CHILI monetizes its content through a transactional VOD model, thus
relieving consumers from the obligation of a subscription. Despite competing with popular
names such as iTunes, Netflix, Amazon, and Google Play, CHILI boasts of 1 million
subscribers as of May 2017. Within 2 years of its establishment in 2012, CHILI was the
leader in VOD service in Italy in terms of contents and consumers, and has since
expanded its services to 4 additional countries: United Kingdom, Germany, Poland, and
Austria.
Competitive Differentiation
CHILI’s competitive ecosystem comprises both transactional VOD participants such as
Blinkbox, Rakuten TV, iTunes, and Google Play, and subscription VOD participants such as
Netflix, Amazon, and Now TV. CHILI differentiates itself through a combination of price,
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content, and promotional offers. Content can be purchased for as low as £0.99 per movie
while competitors’ prices start at £1.49—or in the case of a subscription service, £5.99.
CHILI’s promotional offers for purchase or rental of even one movie are unique in the
industry.
CHILI’s content library includes more than 50,000 local and international titles that can
either be bought or rented and streamed or downloaded on all devices: PCs, tablets,
smart TVs, and smartphones. In comparison, Netflix’s content library has approximately
4,500 movies and 2,000 TV shows. CHILI’s content is offered in SD, HD, FHD formats with
subtitles.
Market Gaps
The Italian OTT market has services that are either subscription-based or part of a
bundled package offered by a network provider or pay TV service. The end consumer has
few options to choose from when they want a transactional service that offers one-stop
access to all content in high resolution without shelling out a lot of money.
CHILI has addressed this gap by creating a non-obligatory, no-subscription service with
access to a vast catalogue at a low cost. Its services are not bound to a network provider
or a pay TV service. CHILI provides a holistic experience to the consumer without the
costs of the likes of Netflix, Amazon, or iTunes.
Blue Ocean Strategy
CHILI’s growth is fueled by its mission to become an entertainment hub that provides its
viewers a 360-degree experience. The company constantly tries to innovate and
continuously enhances its portfolio. In line with its mission, the company’s platform was
one of the first in the industry to provide content in full HD when it launched in 2012. In
2015, it launched its content in UHD.
Recently, the company forayed into the business-to-business (B2B) space, providing
technology solutions to deliver video content and real-time streaming. CHILI plans to
continue its aggressive expansion in Europe in the coming years.
CHILI’s ability to provide a holistic experience to the consumer by combining reliability,
scalability, quality, and low prices with its content and product portfolio has enabled the
company to attain and retain the market leadership position in its countries of operation.
Passionate Persistence
The competitive ecosystem and the dynamic nature of the OTT market in Europe
necessitate persistence and constant innovation to increase subscriber base and revenue.
Within 5 years of its establishment, CHILI has become a common name in Italian
households. Instead of basking in its early-mover advantage, CHILI continued to invest in
strategic partnerships and investments to grow its business. The company diversified its
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portfolio to include B2B products such as video platforms, which now contribute to almost
5% of its revenue.
CHILI’s aggressive marketing strategies and promotional offers have a dramatic effect on
its subscriber base: the company gains 20,000 to 25,000 subscribers every month just
through its marketing and promotional activities. It also partners with consumer
electronics manufacturers such as Samsung and LG to provide its app as part of their
smart TV packages.
CHILI continues to improve its services. It launched in August 2017 a redesigned service
with a fresh user interface and superior user experience. Its strategic acquisition of
Cinetrailer, a promotion platform for European movies, leverages its base of 5 million
customers and allows it to explore new markets.
Price/Performance Value
CHILI follows a value-for-money strategy. The price of contents offered on its Platform
ranges from €0.9 to €11 depending on the picture resolution or whether the viewer wants
to buy or rent the content. This is one of the lowest rates available in the market for legal
streaming or download. All titles available through its OTT app or Web site are offered in
SD, HD, HD+, HDR, UHD, and 1080p formats. All are offered through adaptive bit rate
streaming so consumers can have uninterrupted streaming with Internet connection
speeds as low as 1 Mbps.
CHILI is one of the few OTT services that provide viewers access to movies in the first pay
window—that is, fresh releases. Its 360-degree cinema experience with integrated
promotions through partnerships from other industry stakeholders has become a big hit
amongst European video viewers. Through these initiatives and several new ones planned,
CHILI remains the preferred provider for its highly reliable service offerings, value-added
services, and generally superior service.
Brand Equity
Rapid changes in the video entertainment market have given end consumers unlimited
options; OTT service providers find it increasingly difficult to maintain loyalty as customers
switch to another service as soon as a free trial period end. Even the big names find it
hard to retain their consumers. CHILI, however, prevents churn by engaging the customer
before, during and after the interaction cycle.
CHILI offers integrated promotions focused on cinema, including discount coupons,
themed gadgets and premium merchandise. Some viewers also get a chance to visit
movie studios. The company partners with network providers, consumer electronics
manufacturers, fast-moving consumer goods brands, and retail outlets to run integrated
campaigns for its contents, especially new releases.
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Conclusion
The dynamic nature of the video landscape in Europe and the intense competition in the
OTT market necessitate a multipronged strategy to ensure market leadership. At the same
time, constantly changing consumer preferences and evolving market trends necessitate
continuous refinement and expansion of service offerings. CHILI has recognized this need
and strives to not just provide an end-to-end video experience but also a 360-degree
engagement even outside of the movie viewing time. With its reach and size, CHILI shows
enormous growth potential through its partnerships, acquisitions, and aggressive marketing
strategies.
With its strong overall performance, CHILI is recognized with Frost & Sullivan’s 2017
Entrepreneurial Company of the Year Award.
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Significance of Entrepreneurial Leadership
Ultimately, growth in any organization depends upon customers purchasing from a
company and then making the decision to return time and again. In a sense, then,
everything is truly about the customer—and making those customers happy is the
cornerstone of any long-term successful innovation or growth strategy. To achieve these
dual goals (customer engagement and growth), an organization must be best-in-class in
three key areas: understanding demand, nurturing the brand, and differentiating from the
competition.
Understanding Entrepreneurial Leadership
Demand forecasting, branding, and differentiation underpin an entrepreneurial company’s
journey toward forming deep relationships with customers and permanently altering the
market with their actions. These two concepts—Entrepreneurial Innovation and Customer
Impact—are the cornerstones of this Award, as discussed further in the next section.
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Key Benchmarking Criteria
For the Entrepreneurial Company of the Year Award, Frost & Sullivan analysts
independently evaluated two key factors—Entrepreneurial Innovation and Customer
Impact—according to the criteria identified below.
Entrepreneurial Innovation
Criterion 1: Market Disruption
Requirement: Innovative solutions that have genuine potential to disrupt the market,
obsoleting current solutions and shaking up competition
Criterion 2: Competitive Differentiation
Requirement: Deep understanding of both current and emerging competition to create and
communicate strong competitive differentiators in the market
Criterion 3: Market Gaps
Requirement: A clear understanding of customers’ desired outcomes, the products that
currently help them achieve those outcomes, and where key gaps may exist
Criterion 4: Blue Ocean Strategy
Requirement: Strategic focus on creating a leadership position in a potentially
“uncontested” market space, manifested by stiff barriers to entry for competitors
Criterion 5: Passionate Persistence
Requirement: A deep belief in the “rightness” of an idea and a commitment to pursuing it
despite seemingly insurmountable obstacles
Customer Impact
Criterion 1: Price/Performance Value
Requirement: Products or services offer the best value for the price, compared to similar
offerings in the market.
Criterion 2: Customer Purchase Experience
Requirement: Customers feel they are buying the most optimal solution that addresses
both their unique needs and their unique constraints.
Criterion 3: Customer Ownership Experience
Requirement: Customers are proud to own the company’s product or service and have a
positive experience throughout the life of the product or service.
Criterion 4: Customer Service Experience
Requirement: Customer service is accessible, fast, stress-free, and of high quality.
Criterion 5: Brand Equity
Requirement: Customers have a positive view of the brand and exhibit high brand loyalty.
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Best Practices Recognition: 10 Steps to Researching,
Identifying, and Recognizing Best Practices
Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and
assess their fit with select best practice criteria. The reputation and integrity of the
Awards are based on close adherence to this process.
STEP OBJECTIVE KEY ACTIVITIES OUTPUT
1 Monitor, target, and screen
Identify Award recipient candidates from around the globe
• Conduct in-depth industry research
• Identify emerging sectors
• Scan multiple geographies
Pipeline of candidates who potentially meet all best-practice criteria
2 Perform 360-degree research
Perform comprehensive, 360-degree research on all candidates in the pipeline
• Interview thought leaders and industry practitioners
• Assess candidates’ fit with best-practice criteria
• Rank all candidates
Matrix positioning of all candidates’ performance relative to one another
3
Invite thought leadership in best practices
Perform in-depth examination of all candidates
• Confirm best-practice criteria • Examine eligibility of all candidates
• Identify any information gaps
Detailed profiles of all ranked candidates
4
Initiate research director review
Conduct an unbiased evaluation of all candidate profiles
• Brainstorm ranking options • Invite multiple perspectives on candidates’ performance
• Update candidate profiles
Final prioritization of all eligible candidates and companion best-practice positioning paper
5
Assemble panel of industry experts
Present findings to an expert panel of industry thought leaders
• Share findings • Strengthen cases for candidate eligibility
• Prioritize candidates
Refined list of prioritized Award candidates
6
Conduct global industry review
Build consensus on Award candidates’ eligibility
• Hold global team meeting to review all candidates
• Pressure-test fit with criteria • Confirm inclusion of all eligible candidates
Final list of eligible Award candidates, representing success stories worldwide
7 Perform quality check
Develop official Award consideration materials
• Perform final performance benchmarking activities
• Write nominations • Perform quality review
High-quality, accurate, and creative presentation of nominees’ successes
8
Reconnect with panel of industry experts
Finalize the selection of the best-practice Award recipient
• Review analysis with panel • Build consensus • Select recipient
Decision on which company performs best against all best-practice criteria
9 Communicate recognition
Inform Award recipient of Award recognition
• Present Award to the CEO • Inspire the organization for continued success
• Celebrate the recipient’s performance
Announcement of Award and plan for how recipient can use the Award to enhance the brand
10 Take strategic action
Upon licensing, company is able to share Award news with stakeholders and customers
• Coordinate media outreach • Design a marketing plan • Assess Award’s role in future strategic planning
Widespread awareness of recipient’s Award status among investors, media personnel, and employees
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The Intersection between 360-Degree Research and Best
Practices Awards
Research Methodology
Frost & Sullivan’s 360-degree research
methodology represents the analytical
rigor of our research process. It offers a
360-degree-view of industry challenges,
trends, and issues by integrating all 7 of
Frost & Sullivan's research methodologies.
Too often companies make important
growth decisions based on a narrow
understanding of their environment,
leading to errors of both omission and
commission. Successful growth strategies
are founded on a thorough understanding
of market, technical, economic, financial,
customer, best practices, and demographic
analyses. The integration of these research
disciplines into the 360-degree research
methodology provides an evaluation
platform for benchmarking industry
participants and for identifying those performing at best-in-class levels.
About Frost & Sullivan
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