Wednesday, July 30, 2008

Eros Inks Digital Content Deal With Hungama


MediaNama has learned from reliable sources that AIM listed Eros‘ digital content will now be with Hungama Mobile. This comes as a bit of a surprise, since in 2007, Eros had inked a four year deal with Mauj, based on a minimum guarantee - in most cases, content deals are renegotiated every year, and there’s a first right of refusal built in.
We’d received a tip-off regarding this in the morning, and Mauj CEO Manoj Dawane had told MediaNama that they still have a four year deal with Eros, and there are many types of deals - catalog deals and others (new movies, specific films, specific content types). However, according to our sources, content post the movie “Drona” will be with Hungama. We have contacted Dawane for further clarification on the changes. It’s a year and a half since they struck that deal with Eros.
Eros had digital revenues of $27.7 million last fiscal, though there’s no information on how much of it was from Mauj. This minimum guarantee game is a risky one, since if a film flops, the content doesn’t sell. By the looks of it - Bollywood hasn’t had a great year. Note that Hungama, the other significant player in this space, pays a fairly large minimum guarantee to T-Series, the largest music content aggregator. In fact, last month, T-Series acquired rights to UTV films for about Rs. 30 crore, despite UTV having their own music label - UTV Music, and this content would also have become a part of Hungamas catalog. That gives Hungama a fairly significant presence in this space, with T-Series, UTV and Eros content, which does appear to mitigate risks in terms of the success of a movie, but more partnerships would mean more minimum guarantees, and higher risk. Mauj has done deals with RGV Films in the past as well, so it’s not that they were only dependent on Eros alone.



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