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  • Eros International Plc Reports First Quarter Fiscal Year 2019 Results

    Eros International Plc Reports First Quarter Fiscal Year 2019 Results

    MUMBAI: Eros International Plc (NYSE: EROS) (“Eros” or “the Company”), a leading global Indian film and digital studio, today announced unaudited financial results for the three months ended June 30, 2018.

    Financial Highlights:

    Q1 FY 2019 Highlights

    · Revenue of $60.2 million in Q1 FY2019 compared to $60.8 million in Q1 FY2018.

    · Reported strong Adjusted EBITDA(1) of $19.2 million in Q1 FY2019, compared to $15.8 million in Q1 FY2018, an increase of 21.5 % year-over-year.

    · Adjusted EBITDA margin expanded to 31.9% in Q1 FY2019, compared to 26.0% in Q1 FY2018.

    · Reported net debt of $186.8 million as on June 30, 2018, compared to $189.2 million as on March 31, 2018 and net leverage ratio of 2.28x. The net debt to equity ratio remains conservative at 18.9%.

    (1)   A reconciliation of the non-GAAP financial measures discussed within this release to our GAAP operating results are included at the end of this release. See also “Non-GAAP Financial Measures.”

    Key Business Highlights:

    · As of June 30, 2018, Eros Now worldwide paying subscribers increased by 248.3% year-over-year and 27.8% sequentially to 10.1 million. The Company is reiterating its guidance of 16 million paying subscribers by fiscal year end 2019.  

    · As of June 30, 2018, Eros Now has exceeded 113 million registered users worldwide across APP, WAP and Web.

    · Over the next year, Eros Now is planning to launch a stable of feature films, made-for-digital originals films and over 20 original episodic programs, all of which will be available exclusively on Eros Now to paying subscribers. Three original series, Side Hero, Flip and Smoke, will be launched in the next few weeks. Originals will feature popular names like Rohan Sippy, Kunal Roy Kapoor, Rajat Kapoor, Siddharth Anand and Pavan Kriplani in various capacities.

    · Eros Now announced a partnership with InMobi, a leading global digital marketing platform. The partnership will for the first time enable advertisers to directly monetise on Eros Now’s video platform.

    · Eros Now reinforced its mission of non-stop entertainment, anytime, anywhere with one-of-a-kind brand campaign ‘Bolo Kya Dekhogey.’ The campaign, which rolled out three television commercials, reiterates Eros Now’s leadership position in the movie category, offering its extensive movie library across languages.

    · Eros released 14 films in Q1 FY2019 (one medium budget and 13 small budget films) as  compared to five films in Q1 FY2018 (one high budget, one medium budget and three small budget films). This is in line with Eros’ strategy of developing its own intellectual property and concentrating on content-driven films rather than high budget star-driven films.

    · Bhavesh Joshi  (Hindi), Meri Nimmo (Digital release), Blackmail (Overseas), Haami (Bengali), Goodnight City (Bengali), Alinagarer Golokdhadha (Bengali) and others were the main revenue contributing films during the first quarter.

    · Reliance Industries Ltd (“RIL” or “Reliance”) completed its acquisition of a 5% equity stake in Eros at a price of $15 per share for a total cash consideration of $46.6 million on August 6, 2018.

    · On a pro forma basis including the $46.6 million equity investment from RIL, Eros’ net debt as of June 30, 2018 is $140.2 million and the net leverage ratio is 1.71x.

    · Eros formed a ground-breaking joint venture with V. Vijayendra Prasad, one of India’s top screen-writers and directors. The exclusive collaboration will build a quality content pipeline through joint development of scripts and production and distribution of films and web-series.

    · Eros also partnered with Phars Film, one of the UAE’s largest film distribution and exhibition networks. Eros also intends to partner with Pana Film, one of the largest Turkish film studios for Indo-Turkish co-productions.

    · Eros releases ‘Bajrangi Bhaijaan’ in Turkey across 190 screens after over $45 million in box office collection in China.

    · Eros also has a distribution partnership with Central Partnership in Russia, which may open new markets for Eros releases. These strategic partnerships not only help Eros augment its in-house content production model, but also expand the geographical canvas for content monetization.

    Kishore Lulla, Eros’ Group Executive Chairman and Chief Executive Officer, stated:  

    “We delivered a strong set of results this quarter, underscoring our market leadership, solid business fundamentals and continued growth in our digital platform, Eros Now.  As we continue to develop our digital offering and adapt to the dynamic global media landscape we operate in, I want to reflect on the journey we have taken so far. At our core we are, and always have been, a content company delivering premium Indian filmed entertainment to the masses with unparalleled distribution capacity. Almost 20 years ago, Eros developed the first vertically integrated film studio model in India. We combined premium content production and acquisition abilities with best-in-class international distribution reach. Over the last decade we have witnessed many of the major Hollywood studios make their entries into India. It is a testament to our content offering, brand strength and people that we have been able to maintain and grow our market share in the face of this competition.

    We are also proud to have one the deepest and richest Indian content libraries in the world. Over the last 10 years Eros has been responsible for 30 of the top 100 highest grossing box office films in India. We must not forget that even in the digital age, premium content is still immensely valuable. Our industry relationships spanning over 40 years allow us access to the best talent across the nation. Our library is constantly evolving and replenished every year with new and innovative content that appeals to all consumers.

    We continue to focus on appropriate budget films promising high IRR’s based on our unique portfolio approach. As we increase production across genres and languages, the stories we tell are driven and backed by pre-sale potential with reduced reliance on box office success. The real star of today is the story being told on screen. We are especially excited about our upcoming theatrical slate this year, in addition to our upcoming slate of Eros Now original releases.  Our content partnership with Reliance, new venture with V. Vijayendra Prasad and continued relationship with Aanand Rai are all instrumental to our future and will be keys to our success.”

    Rishika Lulla, Chief Executive Officer, Eros Digital who received the award for ‘Women leadership in Industry’ at the Times National Awards for Marketing Excellence, commented:

    “The continued strength of our digital entertainment offering was once again a significant driving force behind our solid start to Fiscal 2019. With our diversified and unparalleled library we continue to see growing consumer appetite for compelling content. We are excited to have the largest paying and registered users, beating our own target of 2 million every quarter to be at 10.1 million paying subs this quarter. Our new partnership with InMobi will also allow us to start monetising our 113 million plus registered user base while still being an SVOD model. Living up to our core philosophy of innovative and non-intrusive ad formats, we will also be experimenting with new concepts such as allowing brands to engage seamlessly with branded and high quality digital content.

    We truly believe that Eros Now’s extensive content bouquet will satisfy the insatiable appetite of our audiences and further enhance our commitment to be the source of entertainment with penetration in 100 cities across India. This is a significant expansion and with the best talent on board in our industry for movies and originals, we aim to capture an even larger audience with our upcoming star studded ‘Originals’ slate starting with ‘Side Hero’, the first ever Indian original comedy-drama featuring Kunal Roy Kapoor and directed by Rohan Sippy.

    India is undergoing a digital revolution which is further fuelled by Reliance Giga venture and other telcos bringing consumers a seamless connectivity experience, where  Indian OTT players are now leaving no stone unturned to lure the viewers to sign up. Eros Now with its matchless proposition of 52 weeks of 52 premiers across genre and languages is uniquely positioned to execute a wide distribution strategy with a library of over 11,000 films spread across over nine Indian languages. According to our proprietary data, the longest content format is the most engaging where the best movies on Eros Now gets viewed in less than two sessions and an engaged viewer returns at least three times a week, spending a minimum of 40 Minutes, making it safe to say that Eros Now is the best engagement platform.”

    Prem Parameswaran, Group Chief Financial Officer and President of North America, also commented:

    “I am pleased with our first quarter performance, highlighted by strong margin expansion, continued balance sheet strength and solid subscriber additions out of our Eros Now business. We believe the Company is now firing on all cylinders as our Adjusted EBITDA growth and margin expansion is at 21.5% and 587 bps respectively. This coupled with our conservative balance sheet with net debt leverage ratio of 2.28x has us poised for growth in the coming fiscal year. 

    Having reached over 10.1 million paying subscribers in Eros Now through the end of the First Quarter, we are confident in continuing to grow our subscriber base over the next few years, especially given our premium content offering coupled with the large Indian and global market opportunities.”

  • Gaming on Reliance

    Gaming on Reliance

    MUMBAI: There’s a saying: a prophet is respected but in his own country. And that applies quite well to Reliance Games, the mobile gaming division of Reliance Entertainment (Digital). It has successfully been involved in developing games for a slew of Hollywood studios and has been struggling to get Indian film producers to invest in them.

     

    The company recently launched the official mobile game of The Hunger Games: Catching Fire that released in the US on Friday. It is one of the first multi-player games to be developed in India and Reliance is hoping that it will gain traction. Just like its 17 October 2013 release — “Real Steel: World Robot Boxing” – did with seven million downloads in about a month.
    Reliance Entertainment (Digital) CEO Manish Agarwal thinks the company’s gamble in the gaming business has worked well for them

     

    Reliance Entertainment (Digital) CEO Manish Agarwal says that he is amazed with the strong response to Real Steel. “We were expecting 10 million downloads in three to four months’ time but I guess that will happen within 40-50 days,” he says, adding that the expectations from the recent game too are high because it’s different in itself as it can’t be played solo.

     

    “Making just a multi-player game is a bold move for us,” explains Agarwal, who thinks that in India the game might not work well because of the rather low internet speeds, “But it has huge potential to work in countries like Korea, US, UK etc where MOGs are the norm.”

     

    The company signed a deal with Lionsgate, the studio that has produced the movie, to develop the game earlier this year. Agarwal says that getting the deal wasn’t really difficult for Reliance.

     

    “What has been an advantage for us is that we have become very close to many of the Hollywood studios with credible works like Snow White, Total Recall, Real Steel etc in our portfolio. The studios have a comfort level with us. And our game based on the movie After Earth (that was launched earlier this year) became a real advantage for us as the recent game is along the same lines and helped us close the deal with Lionsgate Films,” affirms Agarwal.

     

    The deal was inked on a revenue-sharing basis. Agarwal thinks that a set-up like this works best for both the parties. “Unlike Bollywood that works largely on minimum guarantees, Hollywood is much more mature and the studios there look at gaming as an integral part of the entire process. They don’t take it just as a pre-launch marketing gimmick but look at building it as a franchise, which makes working with them much more exciting,” emphasises Agarwal, who thinks that in India something similar would happen when the gaming market becomes big.

     

    “The Indian movie gaming industry is still very small. And we would only be able to ape Hollywood when the Indian movie guys truly believe that their movies will be played by millions and they see sizeable revenue coming out of it,” he explains.

     

    Currently, Agarwal thinks that since the gaming industry is small, the question of revenue-sharing between the game developers and studios in India is completely out of tune as every producer wants to earn his or her pound of flesh.

     

    “Once the movie guys see profit coming out of it, they will start spending. In Hollywood, they don’t hesitate in spending on games because there’s huge revenue coming out of it from markets like the UK, the US, Australia, Canada, Korea etc.”

     

    Though the company has had both success and failure in the gaming business with something as popular as World Robot Boxing to a complete flop like Dancing With The Stars, Agarwal says that overall it has been an enjoyable journey.

     

    “In a portfolio of business, we need to ensure that we maximise whichever is the hit and cover for the losses or failure and that’s what we are doing. Our gaming business will double this year, it has been really profitable giving us confidence to plan on a higher scale for next year,” says Agarwal.

     

    After producing successful games this year in India, another positive that he has come across is that the company’s Indian team is capable of delivering a world-class product. “That has given us even more confidence to bring many other international projects to India. Today in India we don’t have any competition. We are far ahead of anybody else because the Reliance group has supported us in terms of investments as each of the games is anywhere between half-a-million to a million dollar. It’s a gamble in which we have succeeded,” he concludes.

  • Bangladesh lifts 39-year old ban on Indian films

    Bangladesh lifts 39-year old ban on Indian films

    MUMBAI: In a welcome sign, the Bangladeshi High Court has lifted the 39-year old ban on Indian film exhibition in the country.


    Expressing his happiness at the move of the Bangladeshi High Court, producer Mukesh Bhatt said, “That‘s great news! This move will provide a death knell to the pirates there who make merry by selling the latest Bollywood fare.”


    “We were always of the view that there should be mutual coordination between all SAARC countries (Afghanistan, Bangladesh, Bhutan, India, Pakistan Maldives and Nepal). Bangladesh and India can be of good use to each other by mutual coordination. Who knows, one day we might see a joint Indo-Bangla film being rolled out,” Bhatt added.
     
    After Eid-Ul-Fitr festival that ends on 10 September, cinemas in Bangladesh will start screening Indian films. This will start with the release of three Bengali films – Jour, Badla and Sangram, that are currently awaiting approval from the Bangladesh Censor Board.


    Later, Bollywood‘s biggest hits including Sholay, Dilwale Dulhania Le Jayenge, Dil To Pagal Hai, Kuch Kuch Hota Hai, Kabhi Khushi Kabhie Gham, Dhoom:2, Don, Wanted and 3 Idiots would be exhibited.


    The Bangladesh Cinema Halls Owners Association has welcomed the move by saying that the Court‘s decision was “the best thing to have happened” to the country‘s cinemas. Cinema hall owners have expressed hope that they would be able to start showing new Indian films shortly.

  • Eros Intnl acquires global distribution rights for 3D film

    Eros Intnl acquires global distribution rights for 3D film

    MUMBAI: Eros International has acquired the global distribution rights to India’s first full-length 3D animation film, Friends Forever.

    Friends Forever is the first Indian film to blend animated characters with real life actors and revolves around the cartoon character Zampano, a red and blue haired, pint sized character with magical powers, and his journey with a little girl throughout her childhood.

    Commenting on this Eros International CEO and Chairman Kishore Lulla said, “In the digital era, animation will most definitely be a growing trend. It is refreshing to see an animated film being produced solely in India and drawing on the creativity that popularizes Indian animation films. Friends Forever is a film for the whole family which will capture the imagination of all the young children in India.”

    Produced by Celluloid Dreams Pvt Ltd and directed by Soumitra Ranade, the film stars Ashmit Patel and Hrishithaa Bhatt. Eros International will release Friends Forever worldwide in cinemas this April.