“I want Eros to be Preeminent in the US”: Prem Parameswaran"
Jan 27, 2019 - 11:49 am EDT
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Eros International is the preeminent Bollywood content, Indian content company, in the world. We have largest library of films from a theatrical perspective, we have the largest Indian OTT platform-Eros Now, OTT is Over The Top, which is similar to Netflix. We are bigger actually than the Netflix in terms of number of Indian Films and Original Series. So, we are like the Netflix of India except bigger and we are publicly listed on the New York Stock Exchange ticker symbol EROS. I joined the company 2015, Kishore Lulla , the chairman of the company who I originally worked with on listing Eros on the NYSE came to me in December of 2014 regarding joining Eros and building a global digital company. We were at the Montage Hotel at the Beverly Hills and we were both there doing business. We sat down and literally on a napkin he said this is what I want to do, and I want this digital piece, EROS NOW our OTT platform to be a $10 billion dollar market capitalization company. Here’s where the growth is going to come from. Here’s where the subscribers will come from as there are over a billion people in India, billion people on cellphones. I said, can we start with $1 billion, so we joked around but what was interesting was the vision was there, the vision to build a preeminent digital platform was there and all of the groundwork and infrastructure was already laid down, so I thought this was a huge opportunity and he came to me and said he wants somebody with M& A experience and public capital market experience to help drive the company with him and the current management team. I got excited, after 23 years of banking you usually get excited about deals, this was the first time I got excited about the company and I have been approached before to join other public companies but none of them really appealed to me. This appealed to me cause this you have the opportunity to build the next Netflix, the next Facebook, the next Amazon right now and getting in on the ground floor with the infrastructure in place. Two, I get to work with my Indian heritage in Bollywood. So, it was nice to deal with all of the aspects of films. You know in India there are three things, there is religion, there is Cricket and there is Bollywood may be not in that order. You know it was such a big opportunity and I thought this is perfect .
TIP:So 2015 to 2018, what has been the growth trajectory?
The growth trajectory has been tremendous in the sense that we went from a 3000 film library to an 11,000 film library for Eros Now. From basically the time I joined we had less than 10 million registered users and today we have 128 million registered users and over 13 million monthly paying subscribers. Our revenue growth on the top line is roughly 15 % and our EBITDA margins are over 30 %, last quarter we did 39.2% EBITDA margins earnings before interest and taxes depreciation and amortization. Tremendous growth continues as we have premium content on Eros Now including original series like Side Hero and Smoke that have been highly rated by IMDB.
TIP:So, what would be the net worth of the company now?
Our market cap is roughly around on an enterprise value of about $900 million and a market capitalization of about $750 million today. Actually, it fluctuates with the market. If you asked me two weeks ago, we were closer to a billion. We had a little bit of a global sell off in the market in December. So, that happens; that’s ok as we believe in the long term growth of our business and our stock price will be a by product of our success.
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Yes, of course our market cap today as I told you is roughly just over $750 million and yes, the stock price goes up and down , but we have close to $100 million cash on our balance sheet, we are fully financed, and poised for growth. We have a very conservative balance sheet as well. And it’s part of being a CFO is making sure that one: our capital structure is correct and poised for a growth and two: that we have cash on our balance sheet to sustain the growth.
TIP:And from here as you said about the growth until now what are your plans, where do you go from here?
Sure, so we are in the process of doing 40 to 50 films each year as well as over 100 new Originals on Eros Now. This similar to what Netflix does except we have the Studio business as well so more like a combination of Warner and Netflix equals Eros. We also just launched Eros Now Quickie which is short form content that is great for the millennials. Quicke premiered First Dates Gone Wrong this month which was well viewed because this content transcends globally. We also released Smoke which is a drama based on the underworld in Goa , drugs, violence, very similar to Narcose but I think I am a little biased and I think Smoke is better and its in HINGLISH (Hindi & English) with subtitles. So anybody can view it, you don’t have to know the language of Hindi. Anyone around the world can view it. You can just download our app from EROS NOW.COM.
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