TV, Digital distribution and New Media helped AIM listed film company Eros International PLC record a 38.7 percent increase to $156.7 million in turnover for FY09. EBITDA was up 41% from $77.9 million to $ 109.5 milion “with 62% of EBITDA converted to cash” according to the company. Eros returned an EPS of $0.351 to its investors, up 5% from $0.335.
Digital, New Media and Home Entertainment
Video on Demand
Revenues from New Media for Eros grew to $46.2million from $27.7 million in FY08, up 69%. This was largely due to a growth in Video on Demand. Eros has deals with Comcast, Cablevision, as well as IPTV deals, and expanded similar services to other cable networks in USA/Canada and Europe. On YouTube, Eros claims its channel crossed over 100 million video views and drove “strong growth in advertising revenues“. The company has partnerships with MSN, Yahoo and AOL.
Eros suggests that licensing films to DTH operators including Dish, Tata Sky, Reliance Big TV and Airtel gives it an additional window of monetisation prior to the film being broadcast on pay TV channels. This effectively means that the company might delay pay TV releases, in favor of video on demand.
Eros said that 11 music titles released during the year were monetized on Mobile through ringtones and “other revenue streams”. The industry trend has been that mobile music monetization in India has primarily been about Caller Ring Back Tones. The company also struck a deal with aggregator Hungama Mobile, for mobile distribution, which MediaNama had reported on. Distribution to iTunes has also been enabled. Public performance, radio and TV brought in the revenues as well. Eros licensed the track Beedi from the film Omkara to TV Globo as the title track Omkara for a soap opera ‘Caminho das Indias’. The company has licensed a compilation of tracks to EMI Brazil and also struck a sub-publishing deal with EMI for South and Central America.
Eros is also setting up a Music Publishing division to sign up writers, composers and other artists and administer worldwide publishing for a commission. The company is also considering potential music catalogue acquisitions. A joint venture with Universal India was also formed, for artist management.
Eros has seen revenues from distribution of physical DVDs to Walmart and Best Buy rise, though they have been affected by a reduction in the price point. So far, the company has released BluRay 2 titles in the Blue Ray format, and intend to release 25-50 further titles as a combination of new and catalogue in Blu Ray format in the current year.
EyeQube, Eros’ animation studio, worked on 3 projects during the year: Drona, Aladin and Veer, all Eros movies. A majority of the increase in staff from 205 to 315 is being attributed to recruitment at EyeQube.
Theatrical & TV Releases
A delay in the release of Kambakkth Ishq, Love Aaj Kal and Aladin adversely impacted revenues from theatrical revenues, which fell to $46.3 million. The issues with multiplex owners resolved, Eros believes it will benefit from the new terms, which are valid for 2 years, and guarantee a minimum of 50% of revenues for the first week and potentially a further upside of 2.5% in the event that the films cross a certain threshold of business. Revenues from ‘Dubbed Markets’ led to an increase in TV revenues from $33 million in FY08 to $64 million in FY09, up 94%.
Eros is fairly bullish on the coming fiscal and the next, saying that the production costs for its films – Kambakkth Ishq, Love Aaj Kal, Aladin, De Dhana Dhan and Veer are substantally funded. Their Tamil subsidiary Ayangaran will have a release slate of at least 5-6 Tamil films globally. All in all, Eros released 70 films in 2009 out of which 24 were released globally compared to 52 releases last year.