Scripting Engrossment
Executive Message
Dear fellow owners,
The confl uence of the millennial audience and rapidly advancing technology juggernaut
is creating a tectonic shift in the world of entertainment. The screens are getting
smaller, viewing individualized, critique democratized and content diversifi ed. The
viewing hours and viewer base continue to rise. Entertainment is increasingly becoming
omnipresent and all encompassing.
While theatre and television screens still rule the roost in delivering fi lmed
entertainment, millennial consumers are geared up to swamp the scene now. Typical
millennials – those born between 1981 and 1996 (aged 22 to 37 years in 2018) and
post-millenials – are overly digital, prefer to buy almost everything – from
clothes to food – online, are pretty cool using shared cars and don't fret about
owning a television.
Content as the best bet for healthy RoI, digital viewing as the new normal and
internationalization of audience beyond diaspora for Indian entertainment are the three
undercurrents that we, at Eros, sensed and seized well in time. All our energies and
resources are being devoted in accelerating the pace and scale of our operations in line
with these three factors.
The fi scal year, 2017-18 (FY2018), was a year of rebooting Eros on its path of
enhanced profi tability and sustained growth. It proved to be a landmark year that
witnessed our EBIT and PAT margin expanding by 10.3% and 4.9%, respectively, while we
contained our new releases to a modest 24 from 44 in the previous year. Restraint on
higher budget fi lms was a strategic decision taken due to our stringent green lighting
and budgeting processes and with an objective to have low dependence on box offi ce
collections. We diverted all our focus to high RoI projects, with potentially low-risk
profi le. With the focus on compelling stories produced within prudent budgets across
languages, de-risking investments with sizeable pre-sales and optimizing catalogue and
ancillary revenues, the enhanced profi tability of FY2018 bore testament to the effi cacy
of our business strategy and model.
Honing a pool of in-house creative talent and strategically partnering with fi lm
production entities with a proven content stickiness in India and elsewhere are two
essential elements of our content-driven approach. An Indo-Turkish co-production deal with
Pana Films of Turkey and another co-production deal with Drishyam Films during the year
and the most recent partnership with Baahubali famed iconic writer, V Vijayendra Prasad,
shall prove to be decisive enablers of our content prowess in the coming years. The
selection of Newton, our political comedy-drama fi lm, as India's offi cial entry to
Oscars 2018 and screening of our Tamil drama, Oru Kidayin Karunai Manu, at the 17th
edition of ‘The New York Indian Film Festival' as the offi cial choice are
prestigious validations that inspire us on the path of content centricity.
We released 24 fi lms in FY2018, mostly medium and low-budget ones across genres and
languages. Revenues during the year were driven by the release of sports-based dramas like
Mukkabaaz, Raid (Overseas), Ribbon, Rukh, Kadvi Hawa; super hit comedy Shubh Mangal
Savdhan, Newton, Munna Michael, Sniff, Sarkar 3, Aamhi Doghi (Marathi), Rong Beronger Kori
(Bengali), Oru Kidayin Karunai Manu (Tamil), Tujha Tu Majha Mi (Marathi), Aake (Kannada),
Posto (Bengali), Projapati Biskut (Bengali), Baap Janma (Marathi) and Boss 2 (Bengali).
Our mix of movies from different genres has further strengthened our position as a Company
that offers versatility and uniqueness in content.
Serving engaging and engrossing content is our hallmark. Consolidating the fragmented
Indian fi lmed entertainment market is the fuel that drives this passion. With the
changing market dynamics of the entertainment industry – with OTT markets driving the
entertainment consumption – we are at vantage to leverage our capabilities of quality
content and world-class technology-driven distribution. We have also broken an industry
stereotype by successfully premiering India's fi rst digital release, Meri Nimmo on Eros
Now, our parent company's OTT platform. As we make new strides, we are confi dent that our
fi lm and digital content slate will contribute further to accelerate Eros Now's paid
subscription growth, which in this year itself grew by 276%.
The most signifi cant development of FY2018 came in the form of an industry defi ning
partnership that we inked with Reliance Industries Limited in the fourth quarter of
FY2018. In this strategic content creation and acquisition partnership, Eros and Reliance
would invest a whopping Rs 10 billion to produce and consolidate fi lm and digital across
India. The partnership adds signifi cant strength to our existing content slate while
mitigating investment risks - as we benefi t by leveraging both our distribution networks.
Expressing confi dence in our capabilities and business prospects, Reliance Industries
acquired a 5% equity stake in our parent company, Eros International Plc.
A shining star of our Board and our then Chairman, Mr. Naresh Chandra, left for his
heavenly abode on July 9, 2017. Another esteemed colleague and insightful board member,
Ms. Jyoti
Deshpande resigned from the role of being an executive director to undertake a new role
with Reliance Industries at the beginning of FY2019. She, however, continues to be
steering Eros Group in two capacities; fi rst as a non-executive Director and second as a
key decision maker in our content JV with Reliance Industries. The zeal, creativity,
ardour and conviction of our employees form the bedrock of our current and future success.
A big thanks to you – our valued shareholders, for your unequivocal support and trust
in Eros. I also express my deep gratitude to our Board members for their relentless
guidance and torch-bearing efforts.
We look forward to your support in weaving magic on the screen and good wishes to
continue our entertainment journey…
| Warm Regards, |
| Sunil Arjan Lulla |
| Executive Vice Chairman & Managing Director |