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India Equity Research Reports, IPO and Stock News
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EROS INTERNATIONAL
Key takeaways
Content models. Eros continues to focus on scaling up its co-production model of content
creation, which offers the best of both worlds to the producer and the studio. The
producer does not need to run around for financing and can focus on creating the good
product. The distributor (Eros) then can focus on marketing and monetizing the content
made available. In effect, co-production model ensures specialization in the value chain
and everyone is doing the job best suited for him.
Acquisition model of content. The company will also continue to focus on opportunistic
buys such as Ready and Murder 2 since the model is quite working capital efficient and
the company anyway de-risks itself by pre-selling parts of the movie (C&S TV, ancillary
rights as well as some bits of domestic theatrical rights). The company will not do many
own productions since this is not its USP.
C&S rights revenues. The pressure on advertising revenues of C&S players is visible but
subscription revenues continue to grow. The company has not seen any decline in
appetite of C&S players for film content. Nonetheless, Eros has pre-sold C&S telecast
rights of >50% of its movie in FY2012E already (notably high-budget projects such as
RA.One) and thus, the impact is contained.
Growth drivers. The company is in the process of finalizing its FY2013E slate (>50% is
already done) and will be releasing the details in some time. Besides increasing in scale
(number of movies), the mix of movies also continues to shift towards more high-budget
movies. Finally, the monetization opportunity in Tier-II/III towns in increasing with
proliferation of multiplexes in these markets (higher ticket prices); the distribution costs
continue to reduce due to digital distribution
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
EROS INTERNATIONAL
Key takeaways
Content models. Eros continues to focus on scaling up its co-production model of content
creation, which offers the best of both worlds to the producer and the studio. The
producer does not need to run around for financing and can focus on creating the good
product. The distributor (Eros) then can focus on marketing and monetizing the content
made available. In effect, co-production model ensures specialization in the value chain
and everyone is doing the job best suited for him.
Acquisition model of content. The company will also continue to focus on opportunistic
buys such as Ready and Murder 2 since the model is quite working capital efficient and
the company anyway de-risks itself by pre-selling parts of the movie (C&S TV, ancillary
rights as well as some bits of domestic theatrical rights). The company will not do many
own productions since this is not its USP.
C&S rights revenues. The pressure on advertising revenues of C&S players is visible but
subscription revenues continue to grow. The company has not seen any decline in
appetite of C&S players for film content. Nonetheless, Eros has pre-sold C&S telecast
rights of >50% of its movie in FY2012E already (notably high-budget projects such as
RA.One) and thus, the impact is contained.
Growth drivers. The company is in the process of finalizing its FY2013E slate (>50% is
already done) and will be releasing the details in some time. Besides increasing in scale
(number of movies), the mix of movies also continues to shift towards more high-budget
movies. Finally, the monetization opportunity in Tier-II/III towns in increasing with
proliferation of multiplexes in these markets (higher ticket prices); the distribution costs
continue to reduce due to digital distribution
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