Indian film company Eros International, whose Eros Now streaming service is a key growth focus for management, feels optimistic about its outlook despite new streaming competition from Netflix and Amazon, CFO and president of North America Prem Parameswaran said Tuesday.
Speaking at the UBS Global Media and Communications Conference in New York, he said developing original programming for Eros Now is a big push for the company. “The cost of making an original in India for us is roughly $2 million to $3 million, and we can do about 24 episodes,” the exec said in highlighting one competitive advantage over foreign competitors. “Compare that to the cost of making a series here [in the U.S.], it’s probably $40 million to $50 million.”
Asked about Netflix, which launched in India early this year, Parameswaran said, “To us, Netflix is a friend, not a foe. It shows adoption of OTT. They are really more focused on Western content, which we respect.” The Eros CFO highlighted that Indians like local content, mentioning that only 10 percent of the box office in the country “is Western” as “Indians really want Bollywood content,” he said.
Parameswaran added: “Their prices are much higher, about $8 a sub,” compared to Bollywood-focused Eros Now’s 75 cents-$1.50 per month.
Amazon is “a great company” and “we like them,” he said before acknowledging, “but they are also being a tough competitor.” Amazon has said it plans to launch its streaming video service in India in the near future and has been striking content deals with local production firms.
“They have gotten into the market, [and] they have offered to buy digital rights-only from some of the production houses, so not the theatrical distribution,” said Parameswaran. “And that has caused a pricing shift at some of the production houses.”
What does this mean for Eros’ approach? “We have since held steady on our strategy,” he explained. “We are not going to buy just the digital rights to films. If we are going to do a movie, we need to have both theatrical distribution and digital rights.” Looking ahead, he said: “We’ll see how it plays out … this is certainly causing new competition, but at the same time we like our strategy.”
Streaming video is a competitive field in India, Parameswaran told the UBS audience. Eros Now has 1.32 million paying subscribers, the company said last month, adding it expects to end its fiscal year in March with more than 2 million paid users. 21st Century Fox’s Star has had success with its hotstar streaming service. “It’s a great product,” he said. “They focus primarily on sports and cricket … they probably have more registered users than any OTT platform in the country. They are doing extremely well.”
Asked about Disney’s decision this year to shift its focus to driving its Hollywood slate in India and ending Bollywood production “given the challenges with the current economic model for investing in the local film industry,” Parameswaran said Eros has continued to have about 30 percent-plus film market share in India over the past decade despite deep-pocketed Hollywood competition.
“We were still able to sustain our market share,” he said before adding about Disney’s withdrawal from Bollywood films: “It helps us obviously — that’s one less competitor. But we built our business over time.”
