Press
Eros International plc: Trading Update
08/05/2007
Eros International Plc (“Eros”), the vertically integrated company within the Indian media and entertainment sector, which listed on London’s AIM market in July 2006, provides a pre-close trading update for the year ended 31st March 2007, prior to the announcement of its maiden preliminary results on 4th July 2007.
On the occasion of its 30th anniversary, the Company reports a positive trading outlook and is pleased to announce that it is on track to achieve full year performance in line with expectations.
Since admission to AIM, Eros has remained focused on delivering its key strategic objectives of locking up high quality long-term content deals, further enhancing the value of its premium catalogue of 1300 films, expanding its extensive global distribution network with special emphasis on India and new markets. Eros is also taking the lead in new media digital opportunities including Music distribution. These objectives place Eros in a strong position in consolidating the rapidly growing, but fragmented Indian entertainment industry. The industry is expected to grow from revenues of $10 billion today, to over $23 billion by 2011.
Operational Highlights
1. Content:
Eros has entered into a five-year output deal with Bombay Stock Exchange listed production house K Sera Sera to co-produce and exclusively handle global distribution of its forthcoming films. The deal gives Eros a first option on the entire K Sera Sera’s film slate of at least 17 films.
Omkara was Eros’s first co-production for the year with Big Screen Entertainment. The Company then went on to acquire a 64% stake in Big Screen Entertainment. No Smoking, Sunday and Haale Dil are the three projects currently underway. No Smoking, starring John Abraham, is scheduled for release this summer.
Eros has also entered into a three year output deal with Venus, one of India’s oldest and leading production houses, whereby all films from the Venus banner will be co-produced by Eros with Eros exclusively owning the entire copyright for distribution across all formats.
Eros has also entered into an output deal with Sajid Nadiadwala, one of India’s leading producers and signed a four film output deal with Rose Movies, starting with the co-production of Drona starring Abhishek Bachchan and Priyanka Chopra.
Eros has also signed a similar output deal with Anil Kapoor Film Company and the first film to be released will be Gandhi My Father, in August.
Eros has also signed up stars, directors, and music directors including Soham, Anurag Kashyap, E Nivas, AR Rehman, Manish Jha, Samir Karnik and Jeeva.
Eros will also be releasing India’s first true 3D animation film titled Friends Forever featuring animated character Zampano.
In addition Eros has further visibility of more than 50 projects for which it has locked in distribution rights either on a global or international basis that are slated for release during the next two years.
2. Global Distribution:
Theatrical
With 3.1 billion tickets being sold in India every year across 13,000 screens and growth of multiplexes rapidly driving up the average ticket prices, Eros has entered India theatrical distribution, capitalising on its existing international distribution stronghold.
Eros launched its India distribution arm with Omkara, a powerful Indian adaptation of Shakespeare’s Othello, which not only performed at the box office but also got critical acclaim including Best Director at the Cairo Film Festival.
Eros set up its own distribution offices in Mumbai, Delhi and Bangalore where the multiplex chains have maximum penetration. Within a span of six months Eros further consolidated its move into India by releasing Salaam E Ishq, Eklavya, Namastey London and Provoked. These are all big banner, multi star-cast films.
Eros released a total of 30 films this year internationally (five global) out of which 17 were released theatrically.
There are considerable growth opportunities available to Eros from the 50 million South Asians living outside India. They form the primary target audience for the films that Eros distributes in markets such as the UK, US, Canada, Africa, UAE, Australia and Fiji. During the year Eros was successful in distributing films theatrically in Holland and Belgium for the first time in mainstream chains.
Home Entertainment
Eros also continued to take advantage of the growing home entertainment business in India and has further augmented its Hollywood film catalogue with more than 50 further titles. Eros continues to expand its international mainstream distribution of DVDs and has secured deals with Amazon during the year. It is also exploring the potential from the high definition DVD market.
Music
In line with Eros’ vertical integration strategy Eros also established its own Music Label with the film Omkara. It not only allowed Eros to leverage its existing home entertainment distribution infrastructure but also capitalise on the growing demand for digital music by signing distribution deals with iTunes, Real Rhapsody and with Mauj Telecom for mobile rights. Eros successfully launched five more music titles in quick succession. Omkara and Namastey London were particularly successful holding their No 1 position in the Top 10 charts in India for several weeks.
Syndication
Eros continued to exploit the combined power of its new films and existing catalogue by signing some significant syndication deals.
Television: Eros concluded a significant deal for broadcast of a selection of its films on Sony Entertainment Television globally. Eros also signed further deals with B4U, Zee TV and other networks around the world.
International New Markets: The dubbed/subtitled market phenomenon began a few years ago with markets like Indonesia, Malaysia, Germany, Russia and Thailand embracing Bollywood content. Eros has successfully entered further new markets like Egypt, Denmark, Norway, Poland, Portugal, Romania, Sweden and Spain with some early deals.
3. New Media:
Eros continues to pioneer new media initiatives through key strategic distribution deals and digitally repurposing its valuable content library of over 1300 films.
Apart from ongoing deals with RTL Holland, Movielink, Rogers Cable Canada and Homechoice, the following are some of the significant deals signed by the Company.
Comcast – In September 2006, Eros launched North America’s first Bollywood subscription video-on-demand service on the Comcast cable network, representing a significant milestone in its new media strategy. The service has received favourable consumer response since launch and we are working to establish similar offerings with cable and ISP providers in the US, UK and around the world.
Microsoft Online Spotlight – Having announced its strategic technology and marketing alliance with Intel Corporation, Eros went on to launch the service that will allow consumers to access their internet service through Microsoft Media Centre PCs using a remote control just like in a television. Eros is one of the featured channel buttons on the Microsoft Online alongside MTV, BBC, NBC Universal and other large players. The importance of this placement will grow with the increased penetration of Intel ViiV PCs and Microsoft Media Centres in the following years.
OnCommand – Eros has also concluded a deal with OnCommand, a leading provider of hotel in-room interactive entertainment connecting over 300 million guests annually. This agreement enables Eros to license its content to hotel chains in the United States on a Video on Demand basis. Initial uptake has proved promising and we are working with OnCommand to increase the number of titles and availability.
Mauj – Eros also signed a mobile content licensing deal with Mauj Telecom, a fairly new revenues stream for the Company. Wireless uptake in India has been growing at over 80% CAGR over the last 2 years according to PwC Report on the industry.
Outlook
With a thirty-year track record and an experienced management team, Eros is ideally positioned to capitalise on the prolific growth of the Indian entertainment industry. By continuing to consolidate the fragmented content and distribution, Eros is in a unique position that will enable it to leverage its position in both the film and the wider entertainment sectors.
Eros will continue to focus on its strategic priorities including ensuring the steady availability of quality film content for distribution through its global network and initiatives are likely to involve growth enhancing acquisitions or joint ventures. It is anticipated that further new markets with demand for dubbed Bollywood content will be developed. Sector consolidation will also continue with further output deals.
ENQUIRIES:
| Eros | +44 (0)20 8963 8700 |
| Kishore Lulla – Chairman & CEO | |
| Jyoti Deshpande – COO & Commercial Director | |
| Andrew Heffernan – CFO | |
| Brunswick | +44 (0)20 7404 5959 |
| Jonathan Glass | |
| Anisha Patel |
About Eros International plc
Eros International plc is a well established global player in the fast-growing Indian media and entertainment arena. Being vertically integrated means that Eros not only produces and commissions films like studios but it also distributes/exploits films across formats globally via cinemas, home entertainment, television formats and new media.
Established in 1977, Eros International has three decades of market leadership in creating a global platform for Indian cinema. The company operates in over 50 countries with worldwide offices in India, UK, USA, Dubai, Australia, Fiji and Isle of Man. It has built a successful business model around the release of 30-40 new films every year and the exploitation of a film library containing more than 1,300 titles, making it one of the largest content owners in the business.
Global Distribution, Motion Pictures, Music, Home Entertainment, e-Television, New Media and Animation are the main Strategic Business Units of Eros.
Eros enters its 30th year in the business with the Vision of consolidating the fragmented industry, the Strategy of operating a vertically integrated business model and the Motto of Powering Indian Cinema.
For more information visit www.erosplc.com