Eros International profits, revenue growth stall in Q1 2020 | Major Businesses | Business
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Despite growing demand for its popular core over-the-top service, Eros International has reported a challenging start to its 2020 fiscal year with an annual and quarterly decline in revenues and flat profits.

eros intl logo 22 Feb 2018For the three months ended 30 June 2019, the entertainment company posted reported revenue of $43.5 million compared with $60.2 million for the same quarter a year ago, down 277% on an annual basis and down 37.6% on that reported for the fourth quarter of the 2019 financial year. Operating profit for the quarter was $1.0 million, compared with $10.4 million at the end of the first quarter of 2019 but a marked turn around on the $4.4 million loss for the fourth quarter. For the first quarter, cost of sales decreased by 54.9% to $16.5 million compared to $36.6 million mainly due to lower amortisation costs.

Despite the mixed bag, the company said that it was pleased to announce what it called a positive set of results and noted that the “hard work and investment” it had made in the Eros Now OTT platform was continuing to pay off. As of June 30, 2019 the platform reached 21.1 million paid monthly subscribers, a 109% increase over the same period in the previous fiscal year and it was planning to achieve at least 50 million paid monthly subscribers within the next three years and have its registered user base reach at least 200 million by the end of the 2020 fiscal year.

Standout title for Eros Now during the quarter was original series Modi – The Journey of a Common Man which was released in four languages (Gujarati, Tamil, Telugu, Kannada) to cater to regional Indian audiences.

Going forward, Eros revealed that its strategy would pivot towards focusing on the direct-to-consumer user base of its Eros Now business through increased marketing, technology advancements, windowing and digital content. It emphasised its recent platform partnership announcement with Microsoft as a key part of this strategy.

“We are on the cusp of completing our transformation from the film studio model into a digital-led OTT business with traditional studio offerings and capabilities,” Eros International said in a statement. “While this will have an impact on near-term revenues, principally to our syndication business in the overseas markets, this will increase the premium nature of our content and ultimately increase ARPUs and loyalty of our customers.”