Mumbai: Eros Now, a leading over-the-top (OTT) South Asian entertainment platform owned by Eros STX Global Corporation, 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 establishesEros 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 ErosSTXwith 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. 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 Xfiniteon 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 innovative windowing options 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 Mzaalorevenue 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 224.0 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.
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 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.