Eros International Media Limited has decided to temporarily dismiss its plan to foray into the television industry, a move it announced earlier to set up a movie and music channel at an investment of $50 million. As a part of this proposal, Eros was planning to acquire B4U channel.
The plan was dropped due to an opposition from Knight Assets & Co., a three percent stakeholder of the company. According to Knight, the company could now concentrate on increasing its customer acquisitions for the digital platform ErosNow. The argument was backed by an investor presentation that revealed ErosNow’s soft launch has got 14 million users and this could reach up to 80 million in three years.
The expectation on ErosNow is large among the investors due to the rising mobile penetration in the country. Eros owns a huge library of more than 3000 titles across multiple Indian languages along with their music rights. “There’s significant and sustainable long-term uplift in shareholder value to be achieved through strategic focus on ErosNow platform and we would advocate a reprioritization of the company’s financial planning,” Knight Assets & Co responded to a national daily.
“We believe a unique opportunity exists for Eros to establish first-leader advantage as the Indian video on demand platform of choice and accumulate several hundred million subscribers,” Knight Assets added.
The company has stalled its television plan at least for a year ‘if at all’, according to Kishore Khulla, Group Executive Chairman, Eros International. Instead, the company plans to accelerate customer acquisition for its Netflix-style subscription driven digital platform ErosNow.
India’s online video audience is growing at 27 percent every month. With the arrival of 4G, the figure is anticipated to grow further.