MUMBAI, India--(BUSINESS WIRE)--Eros Now, a leading over-the-top (OTT) South Asian entertainment platform owned by Eros STX Global Corporation (NYSE: ESGC) (“ErosSTX” or “the Company”), a global entertainment company, announced details of its amended partnership with Mzaalo, a gamified video streaming service owned by Xfinite Global Plc (“Xfinite”). The partnership further establishes Eros Now’s footprint in advertising video on-demand (AVOD), a still-developing segment of the India streaming market that has significant growth potential, while allowing Eros Now to continue building its core subscription video on-demand (SVOD) service. This agreement, given Xfinite’s innovative business model, also provides ErosSTX with positive optionality on the potential growth in digital assets and blockchain technology.
Commenting on the announcement, Ali Hussein, CEO of Eros Now, says: “One of our strategic imperatives is to fully monetize the Eros Now platform. A key aspect of our strategy is to expand into ad-supported streaming and this partnership with Mzaalo does just that. We have an opportunity to monetize the more the 224 million Eros Now registered users who are fans of our content offering but are also price conscious. Mzaalo joins our already-substantial ecosystem of Eros Now distribution partners, including Bharti Airtel, BSNL, Tata Sky, Apple, Amazon and Roku – just to highlight a few. The Mzaalo agreement is purposefully structured to provide ErosSTX with an appropriate mix of fixed and guaranteed cash payments and variable revenue participation as Mzaalo scales. We are excited about the growth opportunity this partnership represents.”
ErosSTX is licensing the majority of the existing Eros Now content library to Xfinite on an exclusive basis for global AVOD monetization. The content excluded from this licensing agreement includes content licensed from third-parties with sub-licensing restrictions, and English-language content, including STX content. This agreement does not preclude Eros Now from launching its planned English-language service, Eros Now Prime, or from licensing content to other SVOD services. The Company believes this AVOD initiative will allow Eros Now to efficiently monetise a large and engaged userbase. The AVOD platform will play a key role in Eros Now’s future content strategy and facilitate new release windows, which will give consumers more choices and flexibility. Eros Now currently plans to offer premium original titles and movies in the first window to Eros Now paying subscribers.
Under the amended and restated agreement with Mzaalo, ErosSTX is entitled to a minimum guaranteed cash payment of $42 million over the remaining four-year license term, ending December 2024. ErosSTX has already received $18 million in minimum guaranteed payments under the original contract that started in 2018. Additionally, ErosSTX will receive a 50% share of any Mzaalo revenue generated above the minimum guarantee. Lastly, ErosSTX will receive 400 million XET Digital Tokens in exchange for access to Eros Now’s database of registered users, which totalled 224 million as of March 31, 2021.
Xfinite is an entertainment platform built around their XET token that utilizes blockchain infrastructure. Mzaalo, Xfinite’s first entertainment application, provides consumers with free access to premium content including films, original series, short form content from Eros Now and other media platforms, as well as a range of interactive features. Mzaalo consumers can earn rewards for their engagement that can be spent across fan tokens, merchandise, games and charitable giving through over 500 brand partners.
The opportunity of “tokenizing” attention and engagement allows consumers and content creators to be rewarded for their increased ecosystem participation and celebrities are given new ways to engage with their audiences, as well as monetise their brands. On Mzaalo, consumers are treated equitably as partners in the relationship, and brands and influencers have the potential to vastly increase their marketing ROI through hyper-targeted and measurable user engagement. The ErosSTX partnership with Mzaalo is the first of its kind in the global streaming space.
Mr. Kishore Lulla, the Company’s Executive Co-Chairman and a member of the Board, is a beneficiary of Eros Investments Limited, of which Xfinite Global Plc is a subsidiary. Mr. Swaneet Singh, Xfinite’s CEO, is married to Mrs. Rishika Lulla Singh, the Company’s Co-President, member of the Board and Mr. Kishore Lulla’s daughter. As a result of the related party nature of this arrangement, the Company’s Independent Committee, under the Company’s Investor Rights Agreement, approved the terms of the amended and restated license agreement.
About Eros STX Global Corporation:
Eros STX Global Corporation, (“ErosSTX”) (NYSE: ESGC) is a global entertainment company that acquires, co-produces and distributes films, digital content & music across multiple formats such as theatrical, television and OTT digital media streaming to consumers around the world. Eros International Plc changed its name to Eros STX Global Corporation pursuant to the July 2020 merger with STX Entertainment, merging two international media and entertainment groups. The combination of one of the largest Indian OTT players and premier studio with one of Hollywood’s fastest-growing independent media companies has created an entertainment powerhouse with a presence in over 150 countries. ErosSTX delivers star-driven premium feature film and episodic content across a multitude of platforms at the intersection of the world's most dynamic and fastest-growing global markets, including US, India, Middle East, Asia and China. The company also owns the rapidly growing OTT platform Eros Now which has rights to over 12,000 films across Hindi and regional languages and had 19 million premium paid subscribers as of March 31, 2021. For further information, please visit ErosSTX.com.
About Eros Now:
Eros Now, a division of Eros STX Global Corporation, is the world’s leading Indian OTT platform with 19 million premium paid subscribers and 224 million registered users from over 150 countries across the world. It offers one of the largest digital movie libraries, with over 12,000 titles, as well as premium original episodic series and music videos. Eros Now also has a deep library of short-form content, totalling over 4,400 short-form videos, and includes trailers and exclusive interviews. Eros Now was named “Best OTT Platform of the Year 2019” at the British Asian Media Awards. The platform also won awards for original content and marketing at the SCREENXX 2020. To access Eros Now please go to: www.erosnow.com or download the application.
Special Note Regarding Forward Looking Statements:
Information provided in this communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbors created thereby. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “approximately,” “anticipate,” “believe,” “estimate,” “continue,” “could,” “expect,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will”, “trending” and similar expressions. Those statements include, among other things, the discussions of the Company’s business strategy and expectations concerning its and the Company’s market position and future operations. All such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we are expecting, including, without limitation: our ability to successfully and cost-effectively source film content; the Company’s ability to achieve the desired growth rate of Eros Now; our ability to maintain or raise sufficient capital; delays, cost overruns, cancellation or abandonment of the completion or release of the Company’s films; our ability to predict the popularity of its films, or changing consumer tastes; our ability to maintain existing rights, and to acquire new rights, to film content; our ability to successfully defend any future class action lawsuits we are a party to in the U.S.; anonymous letters to regulators or business associates or anonymous allegations on social media regarding the Company’s business practices, accounting practices and/or officers and directors; our ability to recoup the full amount of box office revenues to which it is entitled due to underreporting of box office receipts by theater operators; our dependence on our relationships with theater operators and other industry participants to exploit the Company’s film content; our ability to mitigate risks relating to distribution and collection in international markets; our ability to compete with other forms of entertainment; our ability to combat piracy and to protect our intellectual property; our ability to maintain an effective system of internal control over financial reporting; contingent liabilities that may materialize, our exposure to liabilities on account of unfavorable judgments/decisions in relation to legal proceedings involving the Company or its subsidiaries and certain of its directors and officers; our ability to successfully respond to technological changes; our ability to satisfy debt obligations, fund working capital and pay dividends; the monetary and fiscal policies of countries around the world, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices; our ability to address the risks associated with acquisition opportunities; risks that the ongoing novel coronavirus pandemic and its spread, and related public health measures, may have material adverse effects on our business, financial position, results of operations and/or cash flows; challenges, disruptions and costs of the Merger and related transactions, integrating the Eros and STX businesses and achieving anticipated synergies, and the risk that such synergies will take longer to realize than expected or may not be realized in whole or in part; the amount of any costs, fees, expenses, impairments and charges related to the Merger and related transactions; completion of the contemplated refinancing transactions; and uncertainty as to the long-term value of the Company’s ordinary shares.
The forward-looking statements contained in this communication are based on historical performance and management’s current plans, estimates and expectations in light of information currently available and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize or should any of the Company’s assumptions prove to be incorrect, the Company’s actual results may vary in material respects from what the Company may have expressed or implied by these forward-looking statements. The Company cautions that you should not place undue reliance on any of its forward-looking statements. Any forward-looking statement made by the Company in this communication speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.