MUMBAI: Film and entertainment company Eros International is looking to add at least $250 million to its topline over the next three-five years on the back of recently concluded deals with three Chinese state-owned film and entertainment companies, according to a top company executive.
The memoranda of understanding were signed by Eros managing director Sunil Lulla at the recently concluded India-China Business Forum in Shanghai, which was part of Prime Minster Narendra Modi’s China visit.
As part of the agreement, the three Chinese entities — China Film Group Corporation (CFGC), Shanghai Film Group Corporation (SFG) and Fudan University Press — and Eros will promote, co-produce and distribute Sino-Indian films across all platforms in both countries, Eros International Group chief executive and managing director Jyoti Deshpande said, adding that Eros is also in talks with Chinese companies like Tencent and Alibaba to curate and launch its digital platform, ErosNow, in China.
“In the next two to three years, we are looking to replicate this model in South Korea, Japan, South America, effectively all those non-English speaking markets that consume Hollywood content also in localised versions,” Deshpande said. China has the second-largest movie market in the world after the US with a 2014 turnover of $4.8 billion and projected growth rate of 34%. Last year, the country produced over 600 films, largely local.Since 2010, the number of theatre screens in China has quadrupled to 23,600. In five years China is expected to surpass the US as the largest box office, according to the Motion Pictures Associworld ation of America. In comparison, India’s widest release till date has been across just 5,000 screens.
“Our China tie-up is a milestone. We will be collaborating with our Chinese partners on three specific fronts. One where we will co-produce bi-lingual Sino-Hindi films shot in both countries with cast and crew from both countries that expands our combined market size to 2.5 billion people,” said Deshpande.
“China is a $5-billion film market second to just the US. These films will have the potential to gross more than $200 million in just these two markets, with the rest of the world being additional margin. At a budget of $18-40 million, of which Eros contributes 30% and shares intellectual property (IP), this is a very exciting proposition for us at Eros.”
According to Deshpande, the second front of co-operation is releasing at least 10 films each year from Eros’ library of 2,000-plus films, which they will localise for the Chinese market, and similarly the Chinese companies will localise for the Indian market. To begin with, Eros will dub and release Junglee Pictures and Excel Entertainment’s upcoming Dil Dhadakne Do, directed by Zoya Akhtar. The first film from the Eros library to be remade or localised will be Sridevi-starrer English Vinglish.
As for the first co-production — which is titled Da Tang Xuan Zang (Monk Xuan Zang) and stars China’s popular actor Huang Xiaoming, and which Eros has already announced with CFGC, China’s largest and most influential state-run film enterprise—it opens up avenues for Eros for local content creation in China. Although Deshpande was not willing to confirm, market sources said Amitabh Bachchan and Ranveer Singh could be part of the Indian star cast in the debut Sino-Indian venture.
Under the co-production treaty, a film designated as a co-production will not be considered a foreign film and, therefore, will avoid any associated restrictions. “We believe the first three initiatives will sensitise the Chinese market to Indian films and culture and that will make the ErosNow proposition even more attractive,” Deshpande said.
Eros International made a transition from AIM to NYSE in 2013, becoming the first Indian media company to list on the exchange. For the nine month to December 2014, the company reported a revenue of $195 million.
For their Chinese counterparts like Ren Zhonglun, president of the Shanghai Film Group Corporation, whose film Dragon Blade this year collected $121 million, this strategic partnership fits into the general background of the collaboration between two countries. For Zhonglun, it is also the fruit of collaborative effort on resource sharing by film makers from two countries.