Last Friday, Eros International — the studio behind films such as the Salman Khan-led Bajrangi Bhaijaan and the Ranveer Singh, Deepika Padukone-starrer Bajirao Mastani — announced that it was merging with Hollywood studio STX Entertainment, best known for the Mila Kunis-starrer Bad Moms, and the Jennifer Lopez-led Hustlers.
They sound like two very different companies. The combined outfit — now known as Eros STX — will continue that approach, Eros International CEO Pradeep Dwivedi told Gadgets 360. The plan is to make some movies only for India, and some only for the US. But going forward, they will also collaborate on Indo-American projects, which might mean a mix of actors, directors, composers, or VFX tech.
Citing the Ramayana and Mahabharata, Dwivedi said there’s an opportunity for them to be retold in a global context, in a serialised storytelling fashion, in a shared universe manner like the Marvel Cinematic Universe.
“They have traditionally been told in a very socio-cultural religious context of India,” Dwivedi said. “But the stories are about brotherhood, about families, about aspirations, about ambition, and about jealousy. And you take all of these stories, put it into the global context, use the best of science fiction and visual effects, and create stories set in other universes literally. To make content with the franchise equivalent of [Marvel].”
Dwivedi also sees the Eros STX merger as the gateway to a larger presence in China, the biggest theatrical market — once the pandemic subsides, anyway — in the world. He’s not referring to the distribution of Bollywood films in China, which Eros and others have had success with in the past — Bajrangi Bhaijaan made nearly a third of its box office there — but rather, making Chinese movies. And Dwivedi is quick to point out what he thinks is different about them.
“What we’re talking about is not the Hong Kong kind of movies, but real mainland China stories that are wonderful, that need to be told in a global context, and need to be produced from a global perspective. And that’s exactly what we’re intending to do. […] We believe that China is a big market opportunity for creative expression and creative content.”
The Eros STX merger is also good news for its streaming service Eros Now, which has over 26.2 million paid subscribers globally, though it refuses to disclose direct subscription numbers. Eros Now CEO Ali Hussein thinks it will help the service become more relevant in the Middle East and Southeast Asia, since STX is more popular globally.
It also follows the March reveal of Eros Now Prime, a new tier solely geared towards English-language content, which signals a bigger Hollywood focus in general. Expected to roll out within the next few months — Q1 2020 — Eros Now Prime announced a partnership with NBCUniversal, which will bring shows such as Suits and its spin-off Pearson, the revival of Will and Grace, the reboot of Magnum P.I., the Anupam Kher-starring New Amsterdam, and the period drama Belgravia.
“Traditionally, Eros Now was more catered to kind of the tier-II, tier-III markets where essentially, we were looking at distribution through middle India at large,” Hussein said. “There is a certain kind of propensity to disposable income and a certain amount of ARPU [average revenue per user] that you will be able to derive out to these markets.
“With Eros Now Prime, we’ve got two larger plays: one is that a lot of the English content, in terms of distribution, was restricted because television channels won’t get the respective frequencies to be a lot more mass market. So we’re looking at allowing for technology and language to play a large role here. Looking at things like subtitling, dynamic dubs, to [ensure] the English content can float through other parts of the country.”
The second reason for launching Eros Now Prime is to offset the original problem of low ARPUs in serving middle India — cater more to the English-speaking audience which has more money to spend. This won’t happen immediately, as Eros Now Prime will be introduced at a starting price point of Rs. 49 a month. For HD, you’ve to pay Rs. 99 a month.
But as it increases partners beyond NBCUniversal, Hussein said, Eros Now will look at a separate price point for Eros Now Prime, around Christmas 2020 or early 2021. After that, subscribers will have the option to pick what they want in à la carte fashion, or opt for the entire bundle.
Its parent company — Eros STX — can use all the help it can get.
Eros’ financials have been called into question multiple times in the last five years, with investment and credit ratings firm shorting its stock or downgrading its rating. Dwivedi termed the reports “unsubstantiated” and pointed to the 2017 US Supreme Court case they won, and the fact that Eros STX has signed a $350 million line of credit from investment firm J.P. Morgan. Still, Eros’ stock has gone from $36 in 2015 to $2.64 this week on the New York Stock Exchange.
Dwivedi added: “While I don’t normally subscribe to the stock market — we, fundamentally as a company, believe in doing the right work by way of content marketing, realisation, revenues, and doing great content for great audience — obviously it has been a challenging period in the last few years. We believe that with this [STX] partnership, some of those issues will get taken care of.”
STX has also had its own share of financial worries. It once planned an IPO (initial public offering) on the stock exchange in Hong Kong, before abandoning that idea due to an underperforming box office, and a trade war between the US and China.
“The two companies put together are much stronger. It is clearly an example of one plus one is equal to three,” Dwivedi said.