It has been a year since citizens of the world were asked to shelter in place to keep family, friends, and neighbors safe. With everyone staying home, the entertainment industry has had to adapt and evolve. People who would normally go out for dinner and a movie on a Friday night have whipped up new recipes at home and hit play on the latest Amazon Prime or Netflix original movie. This brought many broadcasters face to face with the “existential threat” of streaming.
Big Tech is on watch with Australia's new media bill . Introduced to parliament in December 2020, the new bill "will pass into law fairly soon" and require digital platforms to pay for news. This means that companies like Google and Facebook will have "to pay local media outlets and publishers to link their content," according to CNBC.
According to PWC's M&E outlook for 2018-2023, the U.S. entertainment marketplace is expected to reach more than $825 billion. The report includes revenues from a wide range of sources, including global content creators (Disney, Warner Bros., Starz, CBS, AMC, etc.), multichannel video programming distributors (Comcast, AT&T, Verizon, etc.), digital stores (Apple iTunes, Amazon Prime, Google Play, etc.), and streaming platforms (Netflix, Amazon Prime, YouTube, etc.). In total, these segments represent approximately one third of global revenue in this category. This also considers increasing adoption of various access options, like AVOD, DTC subscription-channels, and SVOD. Given the paradigm shift away from traditional programming forms and access methods, it's hard not to wonder if there is such a thing as "nontraditional" anymore.
STX Entertainment is merging with Eros International, India’s largest film studio, after a “trying year,” according to
Variety
, and will henceforth be known as the Eros STX Global Corporation. In 2019 viewers saw some midbudget films from STX, including “Hustlers” and “Ugly Dolls.” The merger with Eros International will bring both studios into a higher financial bracket, currently slated around $300 million for future revenue.
What This Means
Merger specifics include a “stock-for-stock” and publicly traded, independent content. Eros STX Global is currently set to remain on the New York Stock Exchange, according to
Yahoo Finance
and will maintain offices in Mumbai and Burbank. The newly consolidated company will also have a new distribution presence in the United States, India and China.
As new content is created, existing partnerships with NBCUniversal, Google, Apple, YouTube, Amazon and Microsoft will expand. Eros STX Global Corporation 2020 slate consists of 40 feature films and over 100 hours of original episodic content.
Company Expansion
New team members are excited. Robert Simonds, the new Co-Chairman and chief executive officer, spoke with
Variety
about the now vast resources the companies have brought to the table.
“Together we will have the relationships, management expertise and resources to create new content and grow rapidly in the largest and most attractive global markets,” said Simonds. “On Day One, we will have the ability to tap into our significant combined libraries and draw upon our deep relationships with A-list actors, directors and producers across the globe to create even more compelling content for millions of consumers.”
As a combined entity, the company is excited about creating new opportunities in China. Although STX has had limited success in China, Eros aims to bridge that gap. Eros has a good track record in distributing successful Indian films in China. Eros India CEO Pradeep Dwivedi
explains
that “Asian sensibilities of movies are very different from American sensibilities. There is a certain understanding of the cultural ethos of China that we believe we can work with much better compared to STX.”
Content Expansion
Taking a cue from the ongoing success of super-hero films, the company is also keen on building franchises based on
stories from Indian mythology
, eliminating the socio-religious aspects and adapting them for universal appeal much like the DC and Marvel models.
While STX’s recent film releases have garnered some attention, this union with Eros will serve to strengthen their viewership. Eros Now, a popular streaming platform, brings in roughly 188 million registered users around the globe. This association will increase that market share.
The existing Eros Now platform deals with Indian content, it plans to soon launch a
standalone English-language subscription
based offering. In March, Eros announced that it had
signed NBCUniversal
to join this tier. STX content will follow.
Eros also has a new technology deal with Microsoft. As part of the tie-up, Microsoft will build an online video platform for Eros using Azure technology, which will offer
interactive voice search
features in multiple Indian regional languages. It will also create an AI-powered platform that will enable high-speed subtitling and translations of Hollywood content. This will be available to customers
in price-sensitive mass markets
like middle India, Africa, Latin America and migrant workers in the Middle East.
Eros STX Global Corporation plans to complete the merger by the end of second quarter, 2020.
According to PriceWaterhouseCoopers's (PwC) Media and Entertainment (M&E) outlook for 2018-2023, the U.S. industry, which represents one-third of the global M&E industry, is expected to reach more than $825 billion by 2023. This includes revenues from global content creators (Disney, Fox, Warner Bros., Starz, CBS, AMC, etc.), linear broadcast via multichannel video programming distributors (Comcast, AT&T, Verizon, Sky, Virgin, etc.), digital stores (Apple iTunes, Amazon Prime, Google Play, etc.), and digital streaming platforms (Netflix, Amazon Prime, YouTube, etc.).
"We are running into the global arena faster than anybody," Jeff Hirsch, Starz COO declared at a June 2019 conference. He was referring to the fact that the Starz digital platform will soon serve over 50 territories throughout the world. Starz is not alone in focusing on global growth; Roku reported, in its recent fourth quarter earnings release, an expansion into Brazil, one of the largest digital markets in Latin America, as well as a diversification strategy away from its heavy U.S. focus. As content owners and platforms grow geographically, so too is the depth of consumer distribution touchpoints—take for example Acorn-TV, the largest purveyor of British themed programming in the U.S. Acorn is now available over Apple TV Channels, Roku Channels, Amazon Channels, Android TV, Chromecast, Comcast/Xfinity, and via Vizio Smart TV.
A trend in platform naming involves appending "Plus" or "+" to the brand name. Amazon announced last week, for example, that it was rebranding its recently acquired "Epix" streaming channel as "MGM+." This is consistent with a trend that began a few years ago as major brands have adopted the "Plus" naming strategy.
