BATCH 2016-18

A REPORT
ON THE STRATEGIC
ANALYSIS OF
EROS INTERNATIONAL
LIMITED
Submitted
In the Partial Fulfilment of POST
GRADUATION DIPLOMA IN
MANAGEMENT
Submitted To:
Prof. Dr. Shekhar Chaudhari
PROPOSED BY:
PRERNA SHARMA (16015)
SIDDHANTHA CHATTERJEE (16025)
SOUVANIK BATABYAL (16026)
SUBHANGI SHARMA (16027)
SUDIP BASAK CHOWDHURY (16028)
SUBMISSION DATE
20TH MARCH, 2017.
ACKNOWLEDGEMENT

This project consumed huge amount of work, research and dedication. Still, implementation
would not have been possible if we did not have a support of my Faculty, family and our college
management team and also all non-technical staffs. Therefore we would like to extend our
sincere gratitude to all of them.
First of all I am thankful to Director Prof. Dr. Shekhar Chaudhuri for his dedication of giving
lecture at a stretch 3 hours and for providing all necessary guidance and knowledgeable care
concerning projects implementation and valuable case studies from Harvard Business Review.
I am also grateful to my parents for affording such huge expenses which they are lending for
my study, Principal Dr. Tamal Dutta Chaudhuri and the whole team of management of Calcutta
business School for provision of expertise, and technical support in the implementation.
Without their superior knowledge and experience, the Project would like in quality of
outcomes, and thus their support has been essential.
We would like to express our sincere thanks towards faculty who gave his time and knowledge
in the implementation of this project.
Nevertheless, we express our gratitude toward our families and friends for their kind co-
operation and encouragement which help me in completion of this project.

Date:- 20/03/17
 CONTENTS

Sl. No. Particulars Page No.

1 Executive Summary 1
2 Introduction 2
3 History 4
4 Organizational Structure 7
5 Market Analysis 8
6 Human Resource 12
7 SWOT, Porters 5 Force Model 14
8 Competition Faced 16
9 Strategies Taken By Eros 17
10 Gap Analysis 22
11 Financial Analysis 23
12 Prediction 28
13 Conclusion 29
14 Bibliography 30
EXECUTIVE SUMMARY

This report consists of all the strategic moves Eros International Limited has taken in all these
years. Eros International is a pioneer and innovator in Indian film entertainment. Over the past
39 years, the Eros Group has acquired, co-produced and distributed some of the most
recognized and successful Indian films across theatrical, television and other formats. We have
an extensive and growing movie library comprising of over 2,000 films, including recent and
classic titles that span different genres, budgets and languages, and have built a dynamic
business model by combining the release of new films every year with the exploitation of our
film library. We have globally released Indian language films which have been amongst the
top box office grossing films in India. Our considerable distribution capabilities enable us to
target most of the 1.3 billion population in India, a market that is demonstrating significant
economic growth, a prosperous film industry, one of the largest television markets in the world,
and burgeoning popularity of broadband and mobile platforms among consumers. Our strategy
is driven by the scale and variety of our content and the global exploitation of that content
through diverse channels.
INTRODUCTION

Eros International Media Ltd is an Indian motion picture production and distribution company,
based in Mumbai. Founded by Arjan Lulla in 1977 it is considered as one of the leading
production and distribution company in India. Currently, his sons Kishore Lulla and Sunil Lulla
are handling the company. Eros co-produces, acquires and distributes Indian language films in
multiple formats worldwide, including theatrical, television syndication and digital platforms.
The group distribution network includes over 50 countries, with films dubbed in over 25
languages and offices in India, UK, United States, Dubai, Australia, Fiji and the Isle of Man.
Eros has over 2,300 films in its library, plus an additional 700 films for which the group hold
digital rights only.
In 2006, Eros International Plc, the holding company of the Eros Group, became the first Indian
media company to list on the Alternative Investment Market (AIM) of the London Stock
Exchange. Subsequently, the company delisted from AIM in November 2013 to list on the New
York Stock Exchange (NYSE:EROS). In 2010, Eros listed its Indian subsidiary Eros
International Media Limited on the Bombay Stock Exchange (BSE) and National Stock
Exchange (NSE) in India.
Eros International Media Ltd., part of the Eros International Group, operates in the Indian film
entertainment industry which co-produce, acquire and distribute Indian language films in
multiple formats worldwide, which includes theatrical, television syndication & digital
platforms. The company has its registered office located in Maharashtra. This Company
entered into an agreement with Mr. Arjan Lulla and Mr. Sunil Lulla, the partners of Jupiter
Enterprises, dated March 30, 1999, for assignment and transfer of the business of the
partnership firm together with all the assets and liabilities of the partnership firm and the benefit
of all contracts, assignments and licences and all obligations of the partnership firm on the basis
of the balance sheet of the firm as on March 31, 1999. The agreement was effective from April
1, 1999. For more information on the number of Equity Shares acquired by each of Mr. Arjan
Lulla and Mr. Sunil Lulla, There was no independent valuation of Jupiter Enterprises prior to
its acquisition by our Company. However, on the basis of the books of accounts of Jupiter
Enterprises as on March 31, 1999, the net worth of the firm was Rs. 526.00 lakhs.
The name of our Company changed to Eros Multimedia Private Limited on July 25, 2000. Our
name was changed to Eros International Media Private Limited on November 20, 2008. Our
Company was converted to a public limited company by a shareholders resolution dated
September 16, 2009, following which our name changed to Eros International Media Limited,
on November 18, 2009.
Eros International is a leading global company in the Indian film entertainment industry, which
co-produces, acquires and distributes Indian language films in multiple formats worldwide. We
are one of the oldest companies in the Indian film industry to focus on international markets
and we believe we are pioneers in our business. Our success is built on the relationships we
have cultivated over the past 39 years with leading talent, production companies, exhibitors
and other key participants in our industry. Leveraging these relationships, we have aggregated
rights to over 3,000 films in our library, including recent and classic titles that span different
genres, budgets and languages. Eros Now, our over-the-top entertainment platform, has rights
to over 5,000 films across Hindi and regional languages from Eross internal library as well as
third party aggregated content which we beEros International is a pioneer and innovator in
Indian film entertainment. Over the past 39 years, the Company has acquired, co-produced and
distributed some of the most recognized and successful Indian films across cinema, television
and digital new media. We have an extensive and growing movie library comprising of over
3,000 films and have built a dynamic business model by combining the release of new films
every year with the exploitation of our film library. We have globally released Hindi language
films which have been amongst the top box office grossing films in India. Our considerable
distribution capabilities enable us to target a majority of the 1.3 billion population in India, a
market that is demonstrating significant economic growth, a prosperous film industry, one of
the largest television markets in the world, and burgeoning popularity of broadband and mobile
platforms among consumers. The number of wireless internet users in India are likely to cross
790 million by 2020 with more than 60% of users accessing the internet through their mobile
phones. Our strategy is driven by the scale and variety of our content and the global exploitation
of that content through diverse channels.

Vision
To position EROS GROUP as an integrated infrastructure development enterprise in Delhi
and National Capital Region with highest quality of construction, ethics, business standards
and value creation for our esteemed customers.

Our vision is to emerge as a leading entertainment house that balances diverse platforms in a
dynamically changing media environment.

Mission
Being in service since 1940, quality has been our main priority. Our experience gave
recognition as the best realty company in India.
HISTORY
Mr. Arjan Lulla started the business in 1977. A partnership firm under the name Jupiter
Enterprises was formed on April 1, 1981. The original members of Jupiter Enterprises were
Mr. Arjan Lulla, Mr. Kishore Lulla and Ms. Bhagibhai Lulla. Our Company was incorporated
on August 19, 1994 under the Companies Act as a private limited company, with the name
Rishima International Private Limited. By an agreement dated March 30, 1999, by and
among Mr. Sunil Lulla, Mr. Arjan Lulla and our Company, our Company acquired the entire
business, including the assets and liabilities of Jupiter Enterprises, with effect from April 1,
1999.

Our Company entered into an agreement with Mr. Arjan Lulla and Mr. Sunil Lulla, the
partners of Jupiter Enterprises, dated March 30, 1999, for assignment and transfer of the
business of the partnership firm together with all the assets and liabilities of the partnership
firm and the benefit of all contracts, assignments and licences and all obligations of the
partnership firm on the basis of the balance sheet of the firm as on March 31, 1999. The
agreement was effective from April 1, 1999. For more information on the number of Equity
Shares acsquired by each of Mr. Arjan Lulla and Mr. Sunil Lulla, There was no independent
valuation of Jupiter Enterprises prior to its acquisition by our Company. However, on the
basis of the books of accounts of Jupiter Enterprises as on March 31, 1999, the net worth of
the firm was Rs. 526.00 lakhs.

The name of our Company changed to Eros Multimedia Private Limited on July 25, 2000.
Our name was changed to Eros International Media Private Limited on November 20, 2008.
Our Company was converted to a public limited company by a shareholders resolution dated
September 16, 2009, following which our name changed to Eros International Media
Limited, on November 18 ,2009.

Major events

Year Event

1994- Incorporation of our Company and our Subsidiary Eros International Films
1999- Acquired business and assets of Jupiter Enterprises Commenced selling home
entertainment, for instance VCDs and DVDs
2005- Release of our first co-produced film, Waqt
2006- First India theatrical release and music distribution of the film Omkara Launch of the
Eros Music label
2007- Set up VFX operations under our Subsidiary EyeQube Entered into a shareholders
agreement for acquisition of 64.0% in Big Screen Entertainment
2008- Entry into Tamil film industry pursuant to the assignment of the Ayngaran SHA to
Copsale, by Eros plc Incorporation of our Subsidiary Eros Music Publishing for signing
lyricists and composers Joint Venture Agreement with Universal Music India for talent
management India theatrical distribution expansion through offices in Mumbai and Delhi
First release on Blu-Ray high-definition disc format, Heyy Babyy, followed by Om Shanti
Om
2009- India theatrical distribution expansion through offices in Punjab and exclusive
arrangement for WestBengal Execution of Settlement Agreements with various film
exhibitors Conversion to a public limited company
2010 -Execution of Relationship Agreement
2011-Ricky Ghai appointed as Chief Executive Officer of EROS Digital".
-"Eros International & Red Chillies announce brand tie-ups worth Rs. 52 crores for Ra.One".
-"Eros International's ROCKSTAR records a hugely successful opening weekend collection
of Rs. 64 crore gross worldwide".
2012 -"Eros International & John Abraham announce the release of Vicky Donor first Book
and trailer".
-It has launched online entertainment service, Eros Now to offer digitized Bollywood film
content.
-"Eros International acquires international rights of TEZZ".
-"Eros International alings with Vinod Chopra Films for Ferrari ki Sawaari Film to release
worldwide on June 15, 2012".
-" Eros International announces the Launch of its online music channel: Eros Now Music on
You Tube".
-" Eros International announces satellite television licensing deal with COLORS' Viacom18".
-Eros International ties up with HBO Asia to launch 2 movie channels.
2013 - Eros International and Endemol India announce a strategic alliance to co-produce 3
films and television content.
- Eros International & Multi Screen Media Private Limited (Sony Entertainment) come
together in a landmark co-production deal
- HBO Asia and Eros International Media Limited today announced the launch of HBO
DEFINED and HBO HITS in India with two of the leading DTH operators, Dish TV and
Airtel Digital TV.
- Eros International & AR Rahmans YM Movies to produce Hindi Film
2014- Eros International Media Ltd ("Eros"), a leading global company in the Indian film
entertainment industry announced today that it has signed a Term Sheet to acquire a
controlling stake in Universal Power Systems Private Limited, trading by the name Techzone,
a leading Mobile Value Added Services ("MVAS") provider for telecom operators based in
India for an undisclosed sum.
- Eros International Media Limited (Eros), a leading global film company in the India film
entertainment industry and Viacom18 Motion Pictures, a division of Viacom 18 Media Pvt.
Ltd, a joint venture operation in India between Viacom Inc. and the Network18 Group,
announced today an international distribution agreement.
- Eros International Media Limited (Eros International), a leading global company in the
Indian film entertainment industry has acquired the worldwide rights of the hugely
anticipated Tamil multi-entertainer Lingaa, starring superstar Rajinikanth and directed by
K.S. Ravikumar.
- Eros International partners with Salman Khan Films for the global distribution rights of
Kabir Khan's Bajrangi Bhaijaan & Nikhil Advani's Hero.

- Eros International acquires overseas rights of Dil Dhadakne Do & Bangistan.

2015 -Eros International M - Eros International announces two new Tamil projects Perai
Thedia Natkal & Enkitta Mothathe -Eros International M - Eros International Films Win Big
at the Prestigious Sony Guild Awards 2015.
ORGANIZATIONAL STRUCTURE
MARKET ANALYSIS

The pre-release marketing of a film is an integral part of our theatrical distribution strategy.
Our marketing team creates marketing campaigns tailored to market and movie, utilizing print,
brand tie-ups, music pre-releases, television, print and outdoor advertising, social media
marketing on Facebook and Twitter and online advertising to generate momentum for the
release of a film. We generally begin print media public relations as soon as a film commences
shooting, with full marketing efforts commencing two to three months in advance of a films
release date, starting with a theatrical trailer for the film promoted as part of another film
currently playing in theatres. In addition, usually between six to eight weeks before the initial
Indian theatrical release date, we separately release clips from the films featuring musical
numbers. Those clips and the accompanying music tracks are separately available for purchase
and add to consumer awareness and anticipation of the upcoming film release. We also
maintain a Facebook page, which supplies background detail, chat opportunities and photos of
upcoming films as well as links to our YouTube content.
We also use promotional agreements and integrated television marketing to subsidize
marketing costs and expand our marketing reach. We partner with leading consumer companies
in India which support our marketing campaigns in exchange for including their brands in
promotional billboards, print ads and other marketing materials for our new film releases. Our
marketing teams also work with our film stars to coordinate promotional appearances on
popular television programming, timed to coincide with the marketing period for upcoming
theatrical releases.
Our marketing efforts are primarily managed by employees located in offices across India or
in one of our international offices in Dubai, Singapore, the United States, the United Kingdom,
Australia and Fiji. Occasionally, sub-distributors manage marketing efforts in regions that do
not have a dedicated Eros or Ayngaran marketing team, using the creative aspects developed
by us for our marketing campaigns. Managing marketing locally permits us to more easily
identify appropriate local advertising channels and results in more effective and efficient
marketing.

Social media is about connecting with the people in your niche: customers, potential customers,
people who are interested in what you do, or who share similar interests and circles or hubs
with you. Its about building relationships and networking, not selling, although that does come
as a result.

Get Out of the Store: People have always gathered to talk about business, life and community
events. Social media is about doing that online. Establishing a presence on the Internet even if
you have a physical store, is critical. Eros entertainment created an interactive,
regularly updated site or blog by providing informal information through these website which
benefitted them.

Growing their Network

They expanded their network of contacts and potential clients as Eros entertainment did and
used to convince all influential friends or business associates to introduce about their product
to other people they think should meet to expand our business. All the plans and future goals
are decided tell and inform about why your business is special and ask for their advice.

Maintain Relationships with Clients

A successful company is because of reliance commitment to (building and sustaining)

relationships with clients and prospects. While its important to keep up traditional
communication and PR they should also be extending their relationships through online forums
website, blogs, and social networks which EROS entertainment did to overcome their
drawbacks. Hence Eros is now leading than reliance is some parameters.

Leverage Linked-In
EROS International has joined as many Linked-In groups as they can that are related to what
they want to show about their company profile to the people by their broadcasting techniques
and posting videos on linked-in for advertising basis. Like through blog or e-newsletter, post
an announcement to your Linked-In groups with a link whenever at the time of release a new
issue or blog posting.

Content Marketing Strategies

Eros International has used content is any articles, information, video, info graphics or stuff
people can read, watch or look at that tells them something they didnt know already about
your product or service. They consistently amaze and thrill viewers with new content and new
information or entertainment about their product or services.

Web Branding Strategies

Big studios find low-budget movies which acts as an attractive proposition.

The success of low-budget films has also prompted big studios and a typical Bollywood action-
comedy, where Akshay Kumar is in the lead. This helps them cut business risk. Eros says its
future strategy would be to avoid co-production.

Keywords
statistically, most of the internet users live in abroad, making exposure on the web critical, as
Eros Entertainment internationally they incurred a huge benefit out of it whereas. After all
website works as an online brochure as well as a 24 hours a day sales person for your services
and products, so they made it work efficiently.
Be On YouTube
Seriously consider starring in Eros Entertainment own YouTube Series. They advertise or
market their services and dramatize it through a simple, homemade YouTube movie.

Theatrical Distribution
Indian Theatrical Distribution. The Indian theatrical market is comprised of both multiplex and
single screen theatres which are 100% digitally equipped. In India, the cost of distributing a
digital film print is lower than the cost of distributing a digital film print in the United States.
Utilization of digital film media also provides additional protection against unauthorized
copying, which enables us to capture incremental revenue that we believe are at risk of loss
through content piracy. India is divided into 14 geographical regions known as Film Circuits
or Film Territories in the Indian Film Trade. We distribute our content in all of the circuits
either through our internal distribution offices (Mumbai, Delhi, East Punjab, Mysore, Kerala,
West Bengal and Bihar) or through sub-distributors in remaining circuits. The Film Circuits
where we have direct offices comprise of a market share of up to 75% of the India theatrical
revenue. Our primarily internal distribution network allows us greater control, transparency
and flexibility over the core regions in which we distribute our films, and allows us to retain a
greater portion of revenues per picture as a result of direct exploitation instead of using sub-
distributors, which requires the payment of additional fees, sub distributor margins or revenue
shares.
We entered into agreements with certain key multiplex operators to share net box office
collections for our theatrical releases with the exhibitor for a predetermined fee of 50% of net
box office collections for the first week, after which the split decreases over time. We primarily
enter into agreements on a film-by-film and exhibitor-by-exhibitor basis; however, we also
have annual agreements with some of the top national multiplex chains. To date, our
agreements have been on terms that are no less favourable than the terms of the prior settlement
agreements; however, we cannot guarantee such terms can always be obtained.
The largest number of screens in India that we book for a particular film are booked for the
first week of theatrical release, because as a substantial portion of box office revenues are
collected in the first week of a films theatrical exhibition. Our agreements with pan India
multiplex operators is such that 100% of the entire first week of Eros share of revenues from
all our films from such multiplexes is paid to us within 10 days of the release. In single screens
we either obtain non-refundable minimum guarantees / refundable advances and a revenue
sharing arrangement above the minimum guarantee and with certain smaller multiplex chains
we obtain refundable advances and a revenue sharing arrangement. Pursuant to the
Cinematograph Act, Indian films must be certified for adult viewing or general viewing by the
Central Board of Film Certification, or CBFC, which looks at factors such as the interest of
sovereignty, integrity and security of India, friendly relations with foreign states, public order
and morality. Obtaining a desired certification may require us to modify the title, content,
characters, storylines, themes or concepts of a given film.
Digital Distribution
In addition to our theatrical and television distribution networks, we have a global network for
the digital distribution of our content, which consists of full length films, music, music videos,
clips and other video content. Through our digital distribution channel we mainly monetize
music assets and distribute movies and other content primarily in IPTV, VOD (including
SVOD and DTH) and online internet channels. Our film content is distributed in original
language, subtitled into local languages or dubbed, in each case as driven by consumer or
regional market preferences. With our large library of content and slate of new releases, we
have sought to capitalize on changes in consumer demand through early adoption of new
formats and services, which we believe enables us to generate a larger portion of our revenue
through digital distribution than the film entertainment industry average in India.
With a significant portion of the Indian and international population rapidly moving toward
digital technology, we are increasing our focus on providing on demand services, although the
platforms and strategies differ by region. Outside of India, there is a proliferation of cable,
satellite and internet services that we supply. In addition, with the proliferation of internet users,
we are increasing our online distribution presence as well. These platforms enable us to
continue to monetize a film in our library long after its theatrical release period has ended. In
addition, the speed, ease of availability and prices of digital film distribution diminish
incentives for unauthorized copying and content piracy.
HUMAN RESOURCES

People work with people. And human resources (HR) assures quality when it comes to staffing.
You entrust this vital role to entice top talent to work for you, on boarding them correctly, keep
them happy, address their concerns, and develop their potential.

Virtually every part of the customers experience with a technology company involves a human
interaction, either directly or indirectly. So hiring right matters!

The automation and consistency of the human resource component is, therefore, a critical,
foundational piece to success.

Unlike most assets, which depreciate, an employee has the potential to increase in value. The
quality and consistency of an employees output is directly linked to HR, making best practices
in this area an essential and worthy investment.

HR STRATEGIES OF RELIANCE

1. SCHEMES OF ADLABS FILM LIMITED AND RELIANCE

This Scheme of Arrangement (the Scheme) is presented under Sections 391 to 394 and other
applicable provisions of the Companies Act, 1956 for the Demerger of Radio business of
Adlabs Films Limited into Reliance Broadcast Limited with benefitted the overall organisation.
The Scheme is divided into the following parts:

1. PART A which deals with demerger of Radio Business;

2. PART B which deals with the Accounting Treatment and General Terms;

3. PART C which deals with other Terms and Conditions for the employees.

2. EMPLOYESS STOCK SCHEME OPTION

An employee stock option (ESO) is a stock option granted to specified employees of a company.
ESOs offer the options holder the right to buy a certain amount of company shares at a
predetermined price for a specific period of time. An employee stock option is slightly different
from an exchange-traded option, because it is not traded between investors on an exchange.

3. SALARY ADVANTAGE

Reliance Salary Advantage is an offering aimed at Salaried Employees working

in an organization. This facility is designed keeping in mind people who generally
have surplus money in their bank accounts. These funds are not diligently
invested and the employees may end up losing out an opportunity to make their
hard earned money grow.
Salary Advantage has a potential to manage money in a way that it yields market
linked debt returns. Fundamentally, this facility has underlying as Liquid Fund
account investment account (Mutual Fund) which provides similar withdrawal
access to funds like any other Bank account.

All payments made from employer i.e. Salary, Reimbursements, Incentives,

Bonus etc under Systematic Investment Plans or lump sum / one-time
subscription will be a part of salary advantage facility.

This facility allows the individual investors to draw advantage by :-

Transferring their surplus funds to Reliance Money Manager Fund/

Reliance Liquid Fund Treasury Plan that have the potential to earn market
linked debt returns everyday.
Allocate investible funds into host of other open ended schemes (that may
have potential to deliver reasonable returns over a long term period) to
meet long term financial goals.

Key Features associated with Any time money card :

Free access to over 1.8 million ATMs with Over 30 million merchant
establishments
Daily Returns - Daily Liquidity
Relatively Less Volatile

Employee Benefits:
Smart Reimbursement Account: Invest your periodic reimbursements /
incentives pay-out to this market linked account rather than regular current
account or saving account.
Alternate Salary Account: Employee may receive a Full / Defined portion
of monthly salary in this account and enjoy market linked debt returns,
while they continue to enjoy withdrawal facility like any other Bank
account.
Opportunity of Saving Tax: Employees can avail tax deduction U/S 80C
on investing funds in such eligible schemes and also gets the potential
upside of investing in the equity markets
SWOT Analysis
STRENGHTS
Extensive content library
of over 1900 films, plus
another 700 films for
which they digital rights
only built up over three
decades. The group
distribution network of
over 50 countries
OPPORTUNITIES
Cross branding initiatives for
increasing revenues. Due to
availability of huge infra for
post-production they can use
it for projects outside the
production house. Merger or
acquisition of exhibition to
add the final component of
film production house.

THREATS
WEAKNESSES Competition for foreign
Conflict of interest players in both domestic
between the big stars due and foreign markets.
to involvement of many Change in tastes of film
stars. Non availability of viewing in the domestic
exhibition centres. markets. Film piracy.

Porter Five Force Model

Threat of entry:- High
Film production is a very capital intensive and a regulated business. Any prospective
production house needs to obtain broadcaster to uplink their movie or any production. Various
regulations such as limit on FII and FDI investment, number of directors, minimum share
capital needs to be complied with. A satellite also has to be leased and an up-linking hub
(teleport) also needs to be arranged.
Highly qualified and creative people are required. In India, media and mass communication
institutes and colleges offering courses for the television broadcasting sector are limited in
number and so there is a shortage of talent. Besides this expensive broadcasting equipment and
studios are required. Any new channel that is launched needs to build brand awareness among
prospective viewers so huge marketing and advertisement expenditure is incurred. In addition
to the high capex required the direct operating costs are also very high. It is estimated that with
rising content, employee and marketing costs, the direct operating costs of a Hindi general
entertainment channel are in the range of Rs 3.5 to Rs 4 bn per annum. Thus the barriers to
entry is high.
Bargaining Power of Suppliers:- High.
The suppliers in his case are the content providers. So those who can provide a lower budget
for same content will get the offer to produce a film. So in this case main supplier is the
vendors. Vendor shall mean a vendor or supplier, and all of its subsidiaries and affiliates,
including all Employees employed or engaged by any of the foregoing, who produces
films/distribution activities, and/or services for use by Eros International.

Bargaining Power of Customers:- High.

The buyers in this case are the advertisers. If the broadcaster's channels enjoy high
viewership ratings, then its bargaining power is high. Advertisers would clamor to advertise
their products on such channels. The channel enjoys high ad rates and even the broadcaster's
debtor days are low. However, if the channel is losing market share, then its bargaining
power is low. As we noticed that Eros International is making many different cultural films as
well as different regional films so scope of getting advertisement is very high.

Threat of Substitutes:- High.

As this company deals with high, medium budget films so switching cost is very high. Since
the brand value is high so the upcoming actor and actress may feel insecure to leave the
production house.

COMPETITION FACED IN INDIAN MARKET

 Indian film industry is growing rapidly and for that huge competition increased for
talent, contents and release date.
Due to the growth in Indian film industry, it attracted many foreign industry
participants, such as Viacom Inc., The Walt Disney Company, 21st Century Fox and
Sony Pictures.
Those foreign participants have greater financial resources and they have additional
funds on production of new films, access to movie screens and try to enter into
exclusive content agreements with key talent in the Indian film industry.
Most of the competitors are the part of the large diversified corporate groups, where
EROS derive all the revenues from entertainment business only.

Competitive Strength:-
Established, worldwide, multi-channel distribution network with entry proposed
in China. Internationally their distribution network extends to over 50 countries such
as United States, United Kingdom, and China etc. China day by day becoming an
important market and EROS expects very soon they will release all those Bollywood
movies under their banner in China by dubbing in local language.
Diversified revenue stream and pre-sale strategies mitigate risk and promote cash
flow generation.
They generated revenues through theatrical distribution, television syndication, digital
distribution including EROS now.
Strong and experienced management team:- EROS has very strong management
team with majority of their directors and executive directors having been involved in
films, radio or entertainment industry for 20 or more years.
EROS International diversified their revenue streams in theatrical distribution,
television syndication and digital distribution and ancillary products and services
including EROS now.
EROS International further seek to reduce risk to their business by building a diverse
film slate with a mix of films by budget, region and genre that reduce their reliance on
hit films.

Risks involve in our business:-

Defamation.
Invasion of privacy.
Negligence.
Copyright and trademark infringement.
Other claimed based on the nature and the content of the material distributed.
STRATEGIES TAKEN BY EROS INTERNATIONAL

Revenue

284,175.00 274,428.00
235,470.00
215,346.00
Revenue

206,474.00

2012 2013 2014 2015 2016

Year

PAT

49,330.00
43,580.00
PAT

37,144.00
33,665.00

13,288.00

2012 2013 2014 2015 2016

Year

Year 2012-13
EROS International recently signed a licencing agreement Viacom 18 media pvt. ltd.
The licencing deal was for broadcasting the companys forthcoming releases and
catalogue film exclusively on colors channel.
EROS now are dedicated on demand entertainment portals accessible via internet
enable devices represent the groups overall digital brand with all digital content branded
across the group website, You Tube and Twitter Pages and Company entertainment
application.
Year 2013-14
EROS International had announced collaboration with HBO Asia to launch two new
channels HBO defined and HBO Hits and those went live on Dish TV and Airtel Dish
platform.
EROS now, their digital entertainment service is increasingly focused on offering
quality content including Indian films, music and original shows and delivering
consumers friendly products on android and IOS platform across mobile, tablets, cable
and internet because numbers of wireless users in India are increasing day by day and
within next couple of years 4G subscribers will be 40% of wireless internet subscribers.

Year 2014-15
EROS International acquired a controlling stake in Techzone, a leading mobile vaule
added service provider. This acquisition was done with EROS International focus on
building its new media content distribution strategy to attract more numbers of
customers.
EROS International partnered with Hathway Cable to strengthen its online
entertainment platform EROS Now, so that EROS can offer full length movies and
music videos. The streaming service will enable Hathway Broadband customers to
watch high quality movies in EROS Now platform through multiple devices like TVs,
PCs, laptops.
EROS International partnered with RailTel Corporation of India to provide EROS Now
broadband streaming services to railway passengers.

Year 2015-16
Co-produce, acquire and distribute high quality control to augment their film library
including a unique dedicated franchise studio model, Trinty Pictures.
i. EROS International continue to leverage the long standing relationship with creative
talent, production house and other key industry participants.
ii. EROS International give more focus on investing in future slates comprised of a diverse
portfolio mix ranging from high budget global theatrical release to lower budget movies
with targeted audience.

iii. Trinity Pictures is the new division of EROS International, which set up in 2015 with
the focus only on franchise feature films. It used in merchandising, digital and more.

Marketing Analysis of EROS International?

 Marketing Team of the EROS international do marketing campaigns by utilizing print,
brand tie up, music releases, social media ads, marketing through Facebook.
They starting with theatrical tailors for the film promotion before two to three months
back.
Those accompanying music tracks and clips are separately available for purchase and
add to consumer awareness and anticipating for the upcoming film release.
They partner with leading consumers companies in India to support their marketing
campaign with the help of print ads and other marketing materials for their new film
release.

To promote EROS now, they are using OTT platform for online
entertainment across digital platforms.
i. EROS now, their digital entertainment service is increasingly focused on offering
quality content including Indian films, music and original shows and delivering
consumers friendly products on android and IOS platform across mobile, tablets, cable
and internet because numbers of wireless users in India are increasing day by day and
within next couple of years 4G subscribers will be 40% of wireless internet subscribers.
ii. EROS now service is integrated with Bharti Airtel and Idea, Indias leading telecom
operators and also made deal with Micromax to pre-bundle EROS Now in smart phone
to be sold in India.
iii. They are targeting to convert at least one million users into paid subscribers by the end
of fiscal year 2017.

Capitalize on positive industry trend in Indian market

The pace of growing smartphone penetration is growing day by day in Indian market and at the
same time wireless subscribers is increasing in India. EROS is taking advantage of this of this
opportunities and try to monetize their library and distribute new films through existing and
emerging platform.

Further extend the distribution of our content outside of India to new

audience
i. EROS International currently distribute their contents to consumers in more than 50
countries. Now they are focusing markets like USA, UK, Middle East, Europe where
there is significant demand for subtitled and dubbed Indian theme entertainment.
ii. In China Bollywood films demand is growing, so EROS collaborates with China Film
Corp, Shanghai Film Group Co. Ltd. and Fudan University Press Co. Ltd. to co-
produce and distribute Indian films in Chinese market.
iii. They have also enter in arrangement in with local distributers in Taiwan, Japan, South
Korea to distribute dubbed or subtitled EROS films through theatrical release ,
television broadcast or DVD release.

Expanding their regional content offerings

i. Beside Hindi they are work on films in other regional languages such as Marathi,
Malayalam, Punjabi, Tamil, Telugu and Bengali.
ii. They are intend to exploit re-make rights to some of our popular Hindi movies into non-
Hindi language content targeted toward these regional audiences.

Risks involve in our business:-

Defamation.
Invasion of privacy.
Negligence.
Copyright and trademark infringement.
Other claimed based on the nature and the content of the material distributed.
Changing consumer tastes
The success of our business depends on our ability to consistently create and distribute
filmed entertainment that meets the changing preferences of the broad consumer market
both within India and internationally. The popularity and economic success of our films
depends on many factors including general public tastes, the actors and other key talent
involved, the promotion and marketing of the film, the quality and acceptance of other
competing programmes released into, or channels existing in, the marketplace at or near
the same time, the availability of alternative forms of entertainment and leisure time
activities, general economic conditions, the genre and specific subject matter of the
film, its critical acclaim, the breadth and format of its initial release and other tangible
and intangible factors all of which can change, are factors that we cannot predict with
certainty and which may be beyond our control..

Fail to source film content through acquisitions, co-productions or own

productions
Our ability to successfully complete own productions, to enter into co-productions and
to acquire content depends on our ability to maintain existing relationships, and form
new ones, with creative talent and other industry participants. In particular, the pool of
creative talent in India is limited and, as a result, there is significant competition to
secure the services of actors, directors and producers, among others. This, in turn, can
cause the cost of contracting such creative talent, and hence the cost of film content, to
increase as market participants offer higher fees to creative talent to secure their
services.
 Slowdown in DTH/Digital rollout:-
The uptake of pay digital services by subscribers has been a very encouraging sign for
all broadcasters. Internationally most broadcasters derive a greater share of their
revenues from the subscription revenues whereas in India the under-declaration in the
analogue cable system has led to broadcasters being more dependent on advertising
revenues, which tend to be cyclical in nature and more affected by the macro economic
factors. The industry expects pay digital services to grow at a rapid pace in the next two
years and ZEE is likely to benefit heavily from this rapid growth. A slowdown in
growth of digital services may lead to incremental profit margins being impacted

GAP ANALYSIS
While most production houses subcontract format conversions, transfers and subtitle spotting
requirements, YRF is equipped to handle most of these in-house. In this scenario EROS
international is lacking behind the YRF production.

Comparison of EROS International with Nifty Media

It is found from the above mentioned picture that EROS International share prices has
increased from Jan 2012 to July 2015. But after that its share price has decreased from the year
July 2015 onwards. The reasons for that are mentioned below:-

The aggregate revenue from television decreased by 28.8 % to $72.1 million in year
2016 from S101.2 million in 2015 due to lower sales in territories outside of India
because of improvement of days sales outstanding.
Administrative cost also increased in respect of previous years because EROS now
acquired Techzone.
Gross Profit decreased by 20.8% in comparison with previous year 2015 due to lower
revenue from high margin catalogue sales and higher cost of sales, mainly due to
increase of amortization charge.
Net Income decreased by 73% compared to previous year due to lower gross profit and
higher administrative cost.
Other loses also increased by 345.5% or $8.1million in fiscal 2015 to $10.5 million due
to derivative loss as a result of change in USD interest rate expectation.

FINANCIAL ANALYSIS
 CALCULATED DATA
Eros International

2012 2013 2014 2015 2016

Return on Capital Employed 0.09 0.08 0.07 0.07 0.04

Return On Equity 0.10 0.07 0.06 0.07 0.02

Return on Assets 0.080209827 0.068910684 0.066066527 0.068594812 0.030197194

Gross Margin 0.43 0.377736294 0.435456746 0.451827219 0.370457825

Operating Margin 0.297558046 0.255570106 0.254202234 0.277476907 0.137176236
Net Margin 0.211067737 0.156329813 0.157744086 0.173590217 0.048420715

Zee Entertainment
2012 2013 2014 2015 2016
Return on Capital Employed 0.243617 0.282052802 0.269514 0.291653 0.543079
Return On Equity 0.245 0.283911954 0.296111 0.26424 0.016415
Return on Assets 0.208353 0.238511651 0.231327 0.241109 0.375764
Gross Margin 0.565176 0.601348331 0.598153 0.630546 0.586878
Operating Margin 0.314544 0.354551549 0.360407 0.369454 0.299851
Net Margin 0.314544 0.354551549 0.360407 0.331791 0.299851

PVR
2012 2013 2014 2015 2016

Return on Capital Employed 0.08 0.01 0.07 0.06 0.06

Return On Equity 0.13 0.03 0.14 0.09 0.10

Return on Assets 0.06 0 0.0469 0.0476 0.0495

Gross Margin 0.19 0.13 0.16 0.16 0.17

Operating Margin 0.13 0.06 0.1 0.09 0.1
Net Margin 0.06 0.0098 0.0455 0.0819 0.06
 Sun TV

2012 2013 2014 2015 2016

Return on Capital Employed 0.25 0.22 0.22 0.23 0.26
Return On Equity 0.25 0.22 0.23 0.24 0.26
Return on Assets 0.23 0.21 0.21 0.21 0.24
Gross Margin 0.75 0.76 0.70 0.77 0.84
Operating Margin 0.55 0.50 0.49 0.54 0.59
Net Margin 0.36 0.33 0.34 0.38 0.40

ANALYSIS

Return on Capital Employed

0.60
0.50
0.40
Axis Title

EROS International
0.30
Zee Entertainment
0.20
PVR
0.10
Sun Tv Network
-
2012 2013 2014 2015 2016
Yeras

Return on Equity
0.35
0.30
0.25
Axis Title

0.20 Eros International

0.15 Zee Entertainment
0.10 PVR
0.05
Sun Tv Network
-
2012 2013 2014 2015 2016
Axis Title
 Return on Assets
0.4
0.35
0.3
0.25
Axis Title

EROS International
0.2
Zee Entertainment
0.15
PVR
0.1
Sun Tv Network
0.05
0
2012 2013 2014 2015 2016
Axis Title

Gross Margin
0.90

0.80

0.70

0.60
Axis Title

0.50 EROS International

0.40 Zee Entertainment

0.30 PVR
Sun Tv Network
0.20

0.10

-
2012 2013 2014 2015 2016
Axis Title
 Operating Margin
0.7

0.6

0.5
Axis Title

0.4 EROS International

0.3 Zee Entertainment

PVR
0.2
Sun Tv Network
0.1

0
2012 2013 2014 2015 2016
Axis Title

Net Margin
0.45
0.4
0.35
0.3
Axis Title

0.25 EROS International

0.2 Zee Entertainment
0.15 PVR
0.1 Sun Tv Network
0.05
0
2012 2013 2014 2015 2016
Axis Title

Financial Analysis of EROS International

The aggregate revenue from television decreased by 28.8 % to $72.1 million in year
2016 from S101.2 million in 2015 due to lower sales in territories outside of India
because of improvement of days sales outstanding.
Administrative cost also increased in respect of previous years because EROS now
acquired Techzone.
 Gross Profit decreased by 20.8% in comparison with previous year 2015 due to lower
revenue from high margin catalogue sales and higher cost of sales, mainly due to
increase of amortization charge.
Net Income decreased by 73% compared to previous year due to lower gross profit and
higher administrative cost.
Other loses also increased by 345.5% or $8.1million in fiscal 2015 to $10.5 million due
to derivative loss as a result of change in USD interest rate expectation.
Prediction

To achieve and sustain profitability for EROS now business they have to take
numerous steps. Those are listed below:-
They have to successfully distribute their services across multiple mobile, internet, and
cable platform worldwide.
They have to maintain, upgrade and develop their service offering according to the
market demand.
Convert free registered users into paid subscribers and retain them.
Minimize the technical glitches and disruption.
Their ability to attract and retain customers.
Any changes in the general economic conditions specific to the internet and the movie
industry, they have to adopt it and do modification in their business model accordingly.
Ability to secure distribution across various platform including telecom operator and
original equipment manufacturers.
 CONCLUSION

1. The primary goal of this report is to identify strategies of Eros Entertainment to take the initiatives that
make up the Agenda for a New Millennium in order to foster a long term sustainability of the industry of
broadcasting and to gain better competitiveness in the near future.
2. To that end, Eros planned to calls for an increase in the number of tenure of all the employees, including
leadership positions; the analysis and reallocation of workload responsibilities; the assurance of fair
treatment; equal access to resources; and the implementation of existing policies and the initiation of new
policies and procedures.
3. The challenges faced by them will not be realized without institutional accountability to ensure that they
are carried out. By this project report we have analysed Eros Entertainment will inevitably evolve to a
larger extent which will improve the work on entertainment industry.
4. The goals of the Project can only be realized through continuously analysing both international as well as
broadcasting network in India
5. Moreover, this Project can be deemed a success only if the industry administration, working conditions
moves forward to address the range of recommendations outlined in the report.
BIBLIOGRAPHY

The following sites and books have been referred for making this entire project:
Annual reports of the companies
Wikipedia of the companies
Various pdf files as per availability
http://www.erosintl.com/financial-reports/