Eros International Plc slips into operating loss in Q4

MUMBAI: Eros International Plc has posted an operating loss of $4.4 million for the quarter ended 31st March as against an operating profit of $20.3 million in the same quarter of the previous fiscal.

Gross profit was down 11.6% at $33.5 million as against $37.9 million in the year ago period. Revenue fell 3.1% to $69.7 million compared to $71.9 million.

For FY19, the company posted a 52.8% decline in net profit at $27.6 million as against $58.5 million. Gross profit was down 9.3% to $114.7 million. Revenue increased 3.4% to $270.1 million.

The company’s digital and ancillary business generated $123.1 million in revenue, which represented over 46% of Eros’ combined revenue, driven by the strong growth in its’ Eros Now platform.

Growth in FY19 was fuelled primarily by Eros’ digital and ancillary business, including Eros Now, which generated total revenue of $123.1 million. The company’s theatrical and television syndication businesses generated $69.5 million and $77.4 million in revenue, respectively, over the same period.

The company has stated that its over the top (OTT) service Eros Now has ended the fiscal 2018-19 with a paid subscriber base of 18.8 million. Eros Now had set a target of achieving 16 million paying subscribers in FY19. However, that target was achieved in just over nine months.

The OTT platform’s registered users grew to 155 million, a 55% increase versus the prior year period. Eros Now’s registered user base of 155 million grew by 13 million users in the last quarter alone, which the company believes shows the large addressable market and consumer base it is able to harness.

The company said that Eros Now has successfully converted a growing portion of its registered user base into paid subscribers over the past year to 12.1% when compared to 7.9% as of March 31, 2018.

At the beginning of this fiscal year, the company had converted an average of 8% of its registered users to paid subscribers. By 31st March, that metric had increased to over 12%.

Several internal metrics measured by Eros also demonstrate its progress in reaching more Eros Now users and creating an increasingly “sticky” subscriber base. Over the past twelve months, Eros Now has seen quarterly growth rates of 27% on video plays and 25% on new unique devices.

To continue the growth momentum, the company has lined up a very strong slate of films and compelling original digital series, which it plans on releasing over the next twelve months that it expects to help drive the growth in its Eros Now business.

China remains a very important market for Eros and the Company has made positive inroads in that market over the past few months. Most notably, in April 2019 Eros released Andhadhun in China, a thriller starring Tabu, Ayushmann Khurrana and Radhika Apte, which collected over $43 million in the Chinese box office in less than four weeks. Andhadhun is now the third highest grossing Indian film to ever be released in China. The Company expects to announce more theatrical releases in China in the near future.

Over the last twelve months, Eros has released 72 films and 11 digital series, one of the company’s most prolific years in terms of output size. Consistent with Eros’ strategy to create compelling premium content within a controlled budget, it had many new releases this quarter, which spanned genres and budgets.

Eros Now also launched Eros Now Quickie earlier this year, an innovative platform for high-quality short-form original content. The company has now launched ten original Quickie episodics including, ‘Date Gone Wrong’ and the fun-series ‘Paisa Fek Tamasha Dekh’ as well as over 26 ‘mini-movie’ premieres. Eros Now is planning to release 14 original Quickies over the course of the next twelve months.

Eros Now has launched 11 new original series over the past twelve months. The launch of Eros’ digital series this year, comprising a broad mix of genres ranging from comedy to horror and crime thriller, has gained critical acclaim around the world. Eros Now won over ten awards for its’ originals ‘Side Hero’ and ‘Smoke’ across various platforms. These series were a first step towards driving ‘binge-watching’ habits on the platform. In addition, the Company’s series ‘Smoke’ was nominated at SXSW under the ‘Title Design’ category.

‘Enaaya’ went live in January 2019 and is a music-based series focused on urban-youth and the first web series in India with a female lead. This was followed by the action series ‘Operation Cobra’ in February. March had two of the most varied content pieces in terms of genre, ‘Metro Park’ – a slice-of-life comedy series based on a middle-class immigrant family based in New Jersey, and ‘Flip’, an anthology delving into the human psyche. Both series have been very well received among the respective audiences – registering some of the highest engagement Eros Now has received to date.

Other key content releases included ‘The Investigation’, a crime thriller and ‘Tum Se Na Ho Payega’ a classic new age love story for a short-form content repertoire. ‘Modi – The Journey of A Common Man’ – a biography on the Indian Prime Minister kicked off its marketing campaign earlier this year and the series launched in the first quarter of Fiscal Year 2020.

Eros also continues its strategy of weekly movie premieres and of launching new short-form assets on the platform. All of these rich and varied series will add to the wide range of exclusive ‘Original’ assets available only on the Eros Now platform. Due to the success in particular of Smoke and Metro Park, the Company is already working on second seasons for both of these series.

As the Company looks ahead to Fiscal Year 2020, it believes it has a strong film slate, which includes Saif Ali Khan starrer ‘Kaptan’, the trilingual remake of ‘Haathi Mere Saathi’ and ‘Kaamiyab’as well as a host of regional releases. In addition, Eros has a series of originals coming up on Eros Now that it expects to release in the coming quarters, including:

  • Flesh by Siddharth Anand (target release Q2 FY20)
  • Brahmm by Gaurav Sharma (target release Q2 FY20)
  • Halahal, a digital film by Zeishan Qadri (target release Q3 FY20)
  • Avatar: The Legend of Vishnu by Anirudh Pathak and Sree Narayan Singh (target release Q4 FY20)
  • Metro Park 2 by Abi Varghese and Ajayan Venugopalan (target release Q4 FY20)
  • Crisis by Gaurav Chawla and Nikhil Advani (target release Q4 FY20)
  • Ponnyein Selvin (target release FY Y21)
  • Smoke 2 by Neel Guha (target release FY Y21)
  • Bhumi by Pavan Kripalani (target release FY Y21)
  • Over the past twelve months, Eros has digitally-premiered a total of 50 movies on Eros Now. This
  • quarter, Eros Now successfully premiered 13 movies across seven Indian languages.

In the three months ended 31st March, the Eros film slate was comprised of 16 films of which 16 were low budget films, as compared to 8 films in the three months ended March 31, 2018, of which one was medium budget and seven low budget films. In addition, Eros Now released seven original series titled Operation Cobra, Meri Khoj Mere Haath, Flip, Ennaya, Metro Park, Tum Se Na Ho Paayega and The Investigation during the three months ended March 31, 2019.

In the three months, the company’s slate of 16 films comprised of one Hindi film, 13 regional films and two Tamil/Telugu as compared to the same period last year where its slate of eight films comprised six Hindi films and two regional films.

In FY 2019, the Eros film slate was comprised of 72 films of which seven were medium budget and 65 were low budget films as compared to 24 films in fiscal 2018, of which one film was high budget, four were medium budget and 19 were low budget. In addition, Eros Now released 11 original series titled Side hero, Smoke, Date Gone Wrong, Paisa Fek Tamasha Dekh, Operation Cobra, Meri Khoj Mere Haath, Flip, Ennaya, Metro Park, Tum Se Na Ho Paayega and The Investigation during fiscal 2019.

In fiscal 2019, the Company’s slate of 72 films comprised of 15 Hindi films, seven Tamil/Telugu film and 50 regional films as compared to the same period last year where its slate of 24 films comprised of 14 Hindi films, one Tamil/Telugu films and nine regional films.

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