Eros plans buyout of Times Group’s BoxTV
Mumbai: Eros International Media Ltd, a film production and distribution firm, is in initial talks to buy the online subscription video service unit ofTimes BoxTV Media Pte Ltd as it seeks to add content and bolster its own offering in the on-demand Internet streaming space, two people close to the development said.
Eros is in discussions to buy, a service launched by Times BoxTV Media three years ago, they said.
Times Internet Ltd, the digital arm of Times Group, owns Times BoxTV.
“The deal may be done through a share swap where Times Internet may be allotted shares of Eros International. The talks are at preliminary stages,” said the first person cited above, requesting anonymity.
BoxTV’s five million users, and its presence across languages, makes it an attractive asset, he added.
The acquisition, if successful, will give Eros the rights to offer its online subscribers content including movies in Tamil, Telugu, Urdu, Kannada, Malayalam, Bangla, Marathi, Bhojpuri and Odia, besides Hindi and English.
Eros, which offers on-demand entertainment services through Eros Now, is trying to create a local version of Netflix Inc., the world’s largest online subscription video service, as Indians are increasingly watching videos and movies online—on smartphones, tablets and computers.
“Internet streaming and on-demand services are now seeing increasing interest with new launches, and some consolidation is taking place. India is on the cusp of finally joining many parts of the world in the sphere of on-demand entertainment,” said Jehil Thakkar, head of media and entertainment at KPMG India.
Eros Now, launched in 2012, has rights to more than 1,000 movies and over 6,500 music videos available, according to the company website. The service had more than 19 million registered users worldwide in fiscal 2015. According to the firm, this is a 35.7% increase from the 14 million registered users it had in February 2014.
At present, about 15 million of Eros users are from India.
Eros is also in the process of launching a movie channel, generating more content and acquiring technology start-ups.
In an interview in April, Jyoti Deshpande, group chief executive officer and managing director of Mumbai-based Eros International, said the firm is reorganizing and restructuring its business from a pure play-film company to a content company to increase the return on investment, profitability and margins.
On 9 June, Eros Now entered into an exclusive content acquisition deal with Pakistan’s leading on-air and digital content company HUM TV.
Deshpande did not return Mint’s calls seeking comment. A spokesperson for Eros International said that the company would refrain from commenting at the moment. In a text message, a spokesperson for Times Internet said the information is not accurate.
A Ficci-KPMG India report in 2014 said the total Internet user base will reach 494 million by the end of 2018, as against 938 million TV viewers in the same year. “This means the Internet user population will approximately be 53% of the total number of TV viewers in the country in 2018, compared to 27% in 2013,” it added.
“To date, our broadband connectivity—in terms of quality and numbers—was a roadblock to these models being viable. Now that we are on the cusp of critical mass in broadband and with the ecosystem likely to receive a boost post launch of Reliance Jio (Reliance Industries Ltd’s telecom venture), we are seeing industry players beginning the execution of their strategies,” Thakkar said.
Eros is entering south India and newer areas of content creation and distribution using digitization while the company is expecting a steady increase in margins for the current fiscal year against the fiscal year just gone by.
It originally had three revenue streams: theatrical release of movies, TV rights and overseas rights. Now, the company has created the multi-platform content monetization modes including theatrical, TV syndication, music publishing, video-on-demand, ancillary revenues and digital strategies, including selling movies online. Eros already generates 18-20% of its revenue by selling these movies to customers online. The rest comes from theatres and selling to TV channels.
In September 2014, Mint had reported launch of an online streaming media product called Ogle by Pritish Nandy Communications Ltd. TVF Inbox Office, a movie-streaming service, was launched by the Viral Fever Media Labs in January 2015. In the same month, Star India Pvt. Ltd launched a video-streaming service in beta called
Star India’s offers similar services.
“The market is likely to become more fragmented as new companies launch, foreign companies enter the market and existing ones expand. People will ramp up their investment as the broadband ecosystem matures. Consolidation will happen in a couple of years from now, once the dust has settled,” said an analyst who did not want to be identified.
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