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Eros International’s digital & ancillary revenues up 16.6% YoY to $47.7M in FY14


Eros International has reported digital and ancillary revenues of $47.7 million for the year ended March 31, 2014, registering a 16.6% growth from $40.9 million in the year 2013.

This segment accounted for 20.2% of Eros International’s yearly revenues which was at $235.5 million, registering a 9.4% increase year-on-year (YoY). In comparison, digital and ancillary accounted for 17.4% of Eros International’s revenues in the previous year. The company hasn’t shared revenues separately for the two segments, both of which include components of what might be defined as digital businesses.

Eros’s digital businesses include its online movie streaming service EROS Now, which recently shifted to a freemium model, its YouTube channel which claims to have crossed over 2 billion video views in aggregate, and more significantly, it’s distribution via cable based VoD services called “Bollywood Hits On Demand” with Cox, Rogers, Cablevision and Time Warner,” apart from services in the UK and Middle East. It’s ancillary businesses include its music revenues (digital, from iTunes, Spotify, Napster, Rdio), and physical CD’s, rights to Radio and TV channels and royalties from public performances. They also include revenues from In-flight entertainment.

Earlier this month, Eros International also executed a term sheet to acquire a controlling stake in the mobile value added service provider Techzone (Universal Power Systems Private Limited) for an undisclosed amount.

Theatrical revenue: Theatrical revenues increased to $107.5 million for the quarter, compared to $99 million in the previous fiscal. This is despite a decline in the number of movies released during the fiscal to 69 films, from 77 films in the previous fiscal. The contribution of theatrical revenues to the company’s overall revenues however marginally declined to 45.6% for the year, from 46% in FY13.

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Of the 69 films released during the fiscal, four were high budget films and 21 were medium budget films. In the previous year, it had released six high budget films and 13 medium budget films.

If we consider the language mix, 37 of the 69 movies were Hindi movies during the fiscal while the remaining 32 movies was Tamil and other languages. In the previous, Eros had released 30 Hindi movies and 47 Tamil and other regional movies.

Eros financials

The total revenues increased by 9.4% to $235.5 million for the fiscal year FY14, from $215.3 million in the previous year. The net income increased by 10% to $37.1 million for the fiscal, from $33.7 million in the previous year. The adjusted EBITDA increased by 42.6% to $80.3 million, from $56.3 million in the previous year.

The television syndication revenues was at $80.3 million in the fiscal FY14, up from $75.4 million in the previous year. Eros mentions that the licensing deals for Goliyon Ki Rasleela Ram-leela and R…Rajkumar both benefitted from the contractual box-office linked bonus license fees on top of the minimum guarantee license fees.

For the quarter ended March 31, 2014 (Q4-FY14), the revenues increased by 21.2% to $63.3 million from $52.2 million in the same quarter last year while the net income declined by 7.2% to $6.4 million from $6.9 million in the same quarter last year. However, it’s perhaps not right to do a quarter on quarter comparison for the company, since this is the films business which is significantly dependent on number of film releases.

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On November 13, 2013, Eros completed an IPO on the NYSE, with 5,000,000 shares of common stock, at a price to the public of $11.00 per share, raising $55 million in new capital. Eros is the first Indian media company to be listed on the NYSE.

Regional segmentation of revenues

– North America: Revenue by customer location in North America increased by 10.9% to $14.01 million for FY14 due to increased digital and syndication revenues. However, on a quarterly basis revenues declined by 19.3% to $4.98 million due to change in film mix.

– India: Revenues by customer location in India declined by 13% to $117.7 million from $135.3 million revenues in FY13, primarily due to a $8.8 million reduction in revenue due to exchange rate changes. On a quarterly basis, the revenues increased to $31.03 million, up 15.7% YoY.

– Europe: Revenue declined by 36% to $22.25 million for FY14 due to a decline in production services revenue, partially offset by increased contributions from television sales. On a quarterly basis, the revenues declined to $4.63 million, down 67% YoY.

– Rest Of The World: Revenue from the rest of the world increased by 152.2% to $81.56 million in FY14, due to an increase in catalogue syndication sales with respect to television and digital and ancillary rights, along with a wider release of some of the theatrical films and a change of customer location for revenue related to the India market. On a quarterly basis, the revenues increased to $22.65 million, up 340% YoY.

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