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Eros STX Sees Itself as a $1 Billion Business in 2022

By Rich Duprey – Aug 18, 2020 at 1:08PM

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The Indian media and entertainment company plans to build on its leadership position.

Eros STX Global (ESGC) says Bollywood is booming, which will help it realize 50% growth in monthly paying subscribers to its Eros Now over-the-top (OTT) streaming platform and generate $1 billion annually in revenue by the end of 2022.

It just completed its merger between Eros International, an Indian media and entertainment company, and STX Filmworks, a vertically integrated global media producer and marketer. Co-chairman and CEO Robert Simonds says Eros STX is poised to create a "truly global digital entertainment enterprise." 

An Indian woman with henna on her hands and a yellow scarf partially covering her face.

Image source: Getty Images.

Exponential growth on the horizon

Simonds says the company remains "one of the top players in the digital OTT streaming space in what has quickly become one of the fastest growing markets in the world." Eros Now is the largest mobile video operator in the market among 25- to 39-year-olds, with a 59% share in Tier II and Tier III cities, according to Counterpoint Research.

Having one of the largest libraries of local and regional content -- a library that would be prohibitively expensive for a competitor to replicate -- plus the STX content now available to it, as well as what it is producing with and Netflix, makes Eros STX's growth trajectory stratospheric.

Simonds notes the coronavirus pandemic delayed the release of some movies, including the Gerard Butler vehicle Greenland, but it has also boosted subscriptions and consumer engagement on the Eros Now platform.

As a result, Eros STX issued guidance for calendar year 2022 that foresees monthly paid subscribers growing to 50 million from the current 33.8 million, and generating revenue of $1 billion, assuming the world returns to normal by the end of the year. Long-term earnings before interest, taxes, depreciation, and amortization margins for the media company are also forecast to be in the range of 20% to 25%.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Netflix and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.

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