VFX FY20-21: Eros Now witnesses a 36.2 per cent increase in net new paid subscribers -

FY20-21: Eros Now witnesses a 36.2 per cent increase in net new paid subscribers

Eros Now released an update on forward guidance as well as detailed operating metrics for the fiscal year ended 31 March 2021. They had 39.9 million total paid subscribers and 224 million registered users worldwide. This represents 10.6 million net new paid subscriber additions since 31 March 2020, an annual growth rate of 36.2 per cent. 

Going forward, the company will concentrate its reporting and guidance on Premium Paid subscribers as Eros Now believes it is a more meaningful indicator of the platform’s performance and economic vitality. Based on a recent research report from Omdia, Eros Now is currently the second largest streaming platform in India in terms of subscribers, with an estimated market share of 24 per cent behind market leader Disney+ Hotstar. 

The company has developed and grown through symbiotic partnerships with mobile telecom operators and other third-party distribution partners around the world. While these partnerships will continue to play an important role going forward, Eros Now expects to pivot its distribution model to focus primarily on direct-to-consumer relationships while continuing to strengthen and expand selected key distribution partnerships. 

The company has seen growth in subscribers and consumption amidst the pandemic lockdowns, although there was a correction in the final months of calendar 2020 following the early lockdown surge. Overall engagement statistics on the Eros Now platform have increased in 2021 to date.

Below are several key updates and metrics for the Eros Now business announced as on 26 May 2021:

  1. Subscribers: Going forward, Eros Now will concentrate on reporting the number of Premium Paid subscribers. A Premium Paid subscriber is defined as a consumer who subscribes to the Eros Now product for at least one month (30 days), either directly or indirectly through a bundled package with a distribution partner. As of 31 March 2021, Eros Now had 19.0 million Premium Paid subscribers. The other 20.9 million paid subscribers, who purchase content a la carte or with sachet pricing (including single downloads or subscriptions lasting a day or a week), are defined as Base Paid subscribers.
  1. Average Revenue per User (ARPU): Many users start their journey on Eros Now with short-form content or a la carte transactions for specific content, and then move on to more traditional subscription plans. The depth and availability of mass-market content is a tool to introduce consumers to the Eros Now product. As consumer engagement and consumption increases, Eros Now expects to focus on migrating these subscribers into higher ARPU plans of longer duration. Consistent with Eros Now’s strategy to concentrate on direct-to-consumer relationships, the ARPU metric for Premium Paid subscribers will be an important indicator of the company’s progress. In fiscal 2021, the annual ARPU (net to Eros Now after deducting commissions, partnership fees, etc.) of Premium Paid subscribers was as follows: 
  • All Premium Paid Subscribers – Global:  $0.52
  • Premium Paid Subscribers – India: $0.30
  • Premium Paid Subscribers – International:  $10.01
  1. Watch Hours: Total watch hours for Eros Now in fiscal 2021 was 28.1 million hours. Watch hours relating to the top 25 titles on Eros Now was 10.3 million hours. This means that 63 per cent of total watch hours was generated by catalogue or non-tentpole films, including regional language movie titles, which is a testament to the salience and affinity of catalogue content with Eros Now subscribers. 

    The total watch hours related to the original Eros Now series during fiscal 2021 was 2.6 million hours, which represents nine per cent of the total Eros Now watch hours.  
  1. Consumer Profiles: Below are selected data points of the global Eros Now consumer profile in fiscal 2021. The data points are representative averages and there may be variances based on content launches, addition of new geographies and new subscriber additions to the platform.
  • Gender:  75 per cent male / 25 per cent female
  • Geography: Two-thirds of Eros Now viewers are from India and the rest are from outside of India (United States is the second largest market with 10 per cent contribution)
  • Age: 18-34 constitutes 80 per cent of the viewer base. The 25-34 age group demonstrated the largest growth during fiscal 2021.
  • Tier two and Tier three cities in India (medium-to-small sized cities) now represent 50 per cent of overall Indian viewers.
  1. Evolution of the Indian OTT Consumer: Eros Now believes that a large proportion of the new online video subscriptions will be maintained as a result of a more permanent change in consumer behaviour and cord-cutting. cord-cutting. Other factors driving online video growth include affordable subscription packages, such as mobile-only, annual, and bundled plans offered by service providers. Majority of Eros Now viewers are in the younger demographic, less fluent in English and prefer to consume entertainment in Hindi or their native languages. The company’s original series consumption is meaningful in India. The country accounted for 80 per cent of watch hours for original series, of which 50 per cent came from consumers in Tier two and Tier three cities. 
  1. Screen Engagement: Eros Now has multiple television distribution partnerships, including Amazon Fire TV, Tata Sky Binge, Jio Giga-Fiber and Apple TV – among others.  A significant amount of Eros Now consumption is through smart TVs.  For example, 50 per cent of watch hours for Metro Park season two, which debuted in January 2021, were on smart TVs versus a single-digit percentage of watch hours at the close of fiscal 2020.

    To maximize reach, Eros Now currently has global collaborations and partnerships with market-leading telecommunications operators, OEMs and digital distribution entities such as Amazon, Apple, Virgin Media and Roku, which allow Eros Now to be available to global audiences. Eros Now currently has over 120 distribution partners and growing, with a meaningful number of partners signed up during the past 12 months alone. In addition, Eros Now has a unique and strategic relationship with Microsoft to further develop and create backend video technology on Azure. This collaboration will help Eros Now develop a new intuitive online video platform to ensure seamless delivery of content across varied consumer cohorts.

By 31 December, Eros Now is targeting an annual Premium Paid subscriber ARPU globally in the range of $1.20 to $1.30. The company expects the ARPU growth will be driven by the pivot in strategy to focus more on direct-to-consumer relationships and by leveraging the bundling opportunities with distribution partners. Eros Now believes these factors will help grow ARPU and reduce churn. Importantly, the ARPU figures reported above do not include other Eros Now revenue streams from the current incumbent deals on transactional video on demand (TVOD), advertising, YouTube and other forms of monetization of Eros Now.

The company also plans to release a total of 46 original series and movie premieres across eight Indian languages during fiscal 2021. To date, Eros Now has released 25 titles with the rest to follow during fiscal 2021. In addition, Eros Now plans to introduce more genres of content to reinforce its leadership position in the Indian OTT market.