“We are beating Netflix in India. We spent more money on content in India than Netflix does in India. And we have already 13 million monthly paying subscribers as of Sep 30. I don’t believe Netflix even has 1 million in India today. So that shows we are pre-eminent.”

Prem Parameswaran is an institution in himself. A financial wizard, Prem achieved phenomenal success as investment banker. In his 23 -year career in Investment Banking, Prem became one of the top Media and Telecom bankers on Wall Street. He advised clients and many Fortune 10 companies on mergers and acquisitions, as well as both public and private equity and debt financings.

In 2015, after a long and successful career as an investment banker in the Global Media and Telecom sector Prem Parameswaran joined Eros as the Group Chief Financial Officer (CFO) and President of Eros International’s North America Operations.  A new feather was added to his crown when on December 20, 2018 Eros announced that Prem has been appointed to the Company’s Board of Directors.

Established in 1977, Eros is a respected global brand name in the Indian cinema world, which focuses on distributing films and other content through various mediums. Its relatively new OTT (Over-the-Top Service) platform, Eros Now, has over 128 million registered users globally with over 13 million monthly subscribers as of September 30, 2018. People term Eros Now as the “Netflix” of India, which owns rights for about 11, 000 films from Bollywood and regional languages of India spanning several decades. No other company in the world has such a rich and vast Indian content to offer to its viewers globally.

Obviously, Mr. Parameswaran is a subject of interest for the media and anybody attempting to analyze what contributes to success of a person or an institution.  The Indian Panorama Chief Editor Prof. Indrajit S Saluja caught up with Mr. Parameswaran two days before the end of 2018 to interview him at his residence in Purchase, New York.

 Here are excerpts from the interview.

TIP: I am told you were born in USA.

Yes, I was born on October 4^th,1968 in New York. My parents, who were both immigrants who came to US as students in pursuit of the American dream, were the first Indian family to move to Scarsdale in 1970.There were no other Indians in Scarsdale at this time. Scarsdale was predominantly a Jewish Community at that time.  Today, Scarsdale has approximately 20% Asians and is one of the most affluent areas in all of New York.  It also has one of the best school systems in the country and that is sole reason why my dad wanted the family to move to Scarsdale to give me the best education.

TIP:And you went to which College and University?

First, I went to Scarsdale public school system and graduated from Scarsdale High School. Then I went     to Columbia University and then I went to also Columbia Business School. So I have a BA from Columbia University and MBA Finance Honors from Columbia Business School.

TIP:Do you also have a Ph.D.?

No, I don’t. I thought about it and even now I think about it, to perhaps do a Ph.D. in Finance after my business career, but you know family and work come first.  So, I haven’t thought about it recently ,but as you grow older one thinks perhaps why not. I enjoy teaching just like when I was working, I would like to go back to Columbia Business School and sometimes teach a case study in the one of the Advanced Corporate  Finance classes  about a deal or a transaction and how it works and how you value companies. So it is always nice to be able to teach business school students how to apply theory to practice because in Finance there is a lot of theory but in practice you have to think about other variables in valuations. For example, you see valuations of companies like Amazon or Facebook, Netflix or even us at different value levels and different multiples and as a result you have to apply different kind of theories whether it is a discounted cash analysis or an applied public value multiple analysis or a comparable transaction analysis and any of these methods could yield different results.  Teaching how to apply these valuation methods with respect to both public and private companies is an art not a science.

TIP:So is it because of your deep understanding of finance and the practices involved that the companies trusted you with taking your advice on mergers and acquisitions which you specialized in?

After college and business school, I worked in Investment banking. I started my career in 1991 with Salomon Brothers which was one of the pre-eminent Wall Street Investment banking firms and from there I went to the prestigious Goldman Sachs and I spent many years with them as a Vice President; and from Goldman Sachs to Deutsche Bank in 2003 where I eventually became a Managing Director and Head of Americas for media, telecom investment banking.  I worked on mergers and acquisitions as well as public and private financings for large multinational companies.

TIP: I think for that you were given an award also?

Yes, there were some awards over time. It is always nice to receive something for your accomplishments. There was Deal of the Year, Businessman of the Year, there was a whole bunch of different and nice awards and that was from advising different clients but eventually I finished my investment banking career at Jefferies where I was the Global Head of Media, Telecom investment banking. After an investment banking career  of  over 23 years of my career , I had executed over 300 transactions and those transactions for some of the world’s best companies including AT&T, Comcast, T-Mobile, Reliance, The Boston Red Sox, Windstream, Level 3 and Eros International to name a few.

In fact the company now that I work for, Eros International is a company that I helped take public in November 2013. We also did a follow on equity offering for that company.  So,  over the course of a 23 -year career you can do a lot of deals , I really enjoyed doing those deals , I enjoyed working with very talented smart people who would challenge you every day. The people we hire whether it was Salomon or a Goldman  or a Deutsche are the top of the top -you have to be a top student, top GMAT, top SAT and then once you are working you are working 80 to 100 hours a week. These people are really committed, and you have to enjoy what you are doing . If you are not enjoying what you are doing , working 80 to 100 hours of a week is tedious and you are not going to do it well. I loved it and especially the fast pace nature of the business.  I worked very hard and that’s how you succeed, and I think I really have enjoyed a great career in investment banking and now I am enjoying the best career as a CFO.

TIP: By the way, you said  hard work,  but having a vision to create something or to take a company to a higher level that is a different thing. You may be very hard working but if  you have lack of vision you may not be able to achieve as much as you want to. So,  you have a vision, what kind of a vision you had when you moved over the present company you are working for?

Eros International is the preeminent Bollywood content, Indian content company, in the world. We have largest library of films from a theatrical perspective, we have the largest Indian OTT platform-Eros Now,  OTT is Over The Top, which is similar to Netflix. We are bigger actually than the Netflix in terms of number of Indian Films and Original Series.   So, we are like the Netflix of India except bigger and we are publicly listed on the New York Stock Exchange ticker symbol EROS. I joined the company 2015, Kishore Lulla , the chairman of the company who I originally worked with on listing Eros on the NYSE came to me in December of 2014 regarding joining Eros and building a global digital company.   We were at the Montage Hotel at the Beverly Hills and we were both there doing business. We sat down and literally on a napkin he said this is what I want to do, and I want this digital piece, EROS NOW our OTT platform to be a $10 billion dollar market capitalization company. Here’s where the growth is going to come from. Here’s where the subscribers will come from as there are over a billion people in India, billion people on cellphones. I said, can we start with $1 billion, so we joked around but what was interesting was the vision was there, the vision to build a preeminent digital platform was there and all of the groundwork and infrastructure was already laid down, so I thought this was a huge opportunity and he came to me and said he wants somebody with M& A experience and public capital market experience to help drive the company with him and the current management team.  I got excited, after 23 years of banking you usually get excited about deals, this was the first time I got excited about the company and I have been approached before to join other public companies but none of them really appealed to me. This appealed to me cause this you have the opportunity to build the next Netflix, the next Facebook, the next Amazon right now and getting in on the ground floor with the infrastructure in place. Two, I get to work with my Indian heritage in Bollywood. So, it was nice to deal with all of the aspects of films. You know in India there are three things, there is religion, there is Cricket and there is Bollywood may be not in that order. You know it was such a big opportunity and I thought this is perfect .

TIP:So 2015 to 2018, what has been the growth trajectory?

The growth trajectory has been tremendous in the sense that we went from a 3000 film library to an 11,000 film library for Eros Now.  From basically the time I joined we had less than 10 million registered users and today we have 128 million registered users and over 13 million monthly paying subscribers.  Our revenue growth on the top line is roughly 15 % and our EBITDA margins are over 30 %, last quarter we did 39.2% EBITDA margins earnings before interest and taxes depreciation and amortization. Tremendous growth continues as we have premium content on Eros Now including original series like Side Hero and Smoke that have been highly rated by IMDB.

TIP:So, what would be the net worth of the company now?

Our market cap is roughly around on an enterprise value of about $900 million and a  market capitalization of about $750 million today. Actually, it fluctuates with the market. If you asked me two weeks ago, we were closer to a billion. We had a little bit of a global sell off in the market in December. So, that happens; that’s ok as we believe in the long term growth of our business and our stock price will be a by product of our success.

TIP: But then it will bounce back, too?

I am not worried about the small blips in the stock market here and there. Right now our stock price is 9.50, we believe this could be $100 stock if we continue to operate and execute on our business strategy with premium content.

TIP:So, the flop doesn’t bother you?

No, given our business fundamentals are strong, I believe we will achieve new heights.

TIP: So, ultimately it does affect your net worth or what would you call it your net capital or whatever you may like to call it?

Yes, of course our market cap today as I told you is roughly just over $750 million and yes, the stock price goes up and down , but we have close to  $100 million cash on our balance sheet, we are fully financed, and poised for growth. We have a very conservative balance sheet as well. And it’s  part of being a CFO is making sure that one: our capital structure is correct and poised for a growth and two: that we have cash on our balance sheet to sustain the growth.

TIP:And from here as you said about the growth until now what are your plans, where do you go from here?

Sure, so we are in the process of doing 40 to 50 films each year as well as over 100 new Originals on Eros Now. This similar to what Netflix does except we have the Studio business as well so more like a combination of Warner and Netflix equals Eros. We also just launched Eros Now Quickie which is short form content that is great for the millennials. Quicke premiered  First Dates Gone Wrong this month  which was well viewed because this content transcends globally. We also released Smoke which is a drama based on the underworld in Goa , drugs, violence, very similar to Narcose but I think I am a little biased and I think Smoke is better and its in HINGLISH (Hindi & English) with subtitles. So anybody can view it, you don’t have to know the language of Hindi. Anyone around the world can view it. You can just download our app from EROS NOW.COM.

TIP:So, this is one way where you want to head on at the moment but is there anything revolutionary, exceptional and doesn’t exist anywhere else, but you can think of introducing to promote your business?

Yeah what’s interesting about us is that we have been on the cutting edge of Bollywood cinema and Indian content since 1977. The company was formed in 1977 in an International distribution house by Arjan Lulla, God Rest his Soul , he just passed away. Kishore Lulla, the chairman , his son has built it up to make it a global phenomenon, a global company. Again, similar to Netflix except better from an Indian content perspective there is no one that even comes close. So much so that Reliance industries, Mukesh Ambani’s company bought a 5% stake in our company at $15 a share this past February 2018. Ironically our stock is at $9.50 but it is good that the 19^thrichest man in the world bought 5 % stake in our company at $15 a share. It shows you that he believes in the growth potential of our company. He is a smart businessman and knows the principals of value investing.

TIP: Did Ambanis have anything to do with you probably when they bought some theatres here?

No, that was Anil Ambani, his brother not Mukesh. Anil had invested in DreamWorks and unfortunately, I don’t think that turned out well for him because I think he bought it at the top. Ours is a different story because Mukesh Ambani is populating his telecom company and his data offering with content and he knows that we can be one of the preeminent content providers not only in India but globally.   .

TIP:What challenges do you face from may be your competitors or from the other advancing technology?

Netflix has gone into India.  Amazon has gone into India. Then you have others like Voot and Hotstar but having said that we look at ourselves in a different light because the EROS brand is so strong in India and globally amongst the Indians.   We have the deepest  and the richest library than any of our competitors.  Of the last 10 years and the last 110 highest box office grossing films, over 36 of them are ours which I think is a strong testament to our  preeminent content.  EROS NOW or OTT App which is being driven by Rishika Lulla is phenomenal. We are beating Netflix in India. We spent more money on content in India than Netflix does in India. And we have already 13 million monthly paying subscribers as of Sep 30. I don’t believe Netflix even has 1 million in India today. So that shows we are pre-eminent.

“…you are looking at Indians now who have conquered Wall Street, you see Indian CEOs on Wall Street. There are Indian CEOs at some of the top companies in the world like Google, Microsoft, Pepsi, Mastercard and Adobe and they all exemplify the strength of Indians. In addition, most people are not threatened by Indians, we are smart, but we are good people with a lot of intellectual horsepower.”

TIP:EROS is focusing solely on Indian content?

Today we are into India content and that may change too. But the price point is also different. Our price point is lower, we want to get people in and we want to get them hooked because we love our content and we think that people will love the creative content that we have whether it is Smoke or Side Hero, Bajirao Mastani or a Bajrangi Bhaijaan, and they will get hooked.  As our business grows and viewers get a hooked we can start thinking about different pricing scenarios.

TIP:So while you are ahead of the rest in the Indian market be it Netflix or Amazon, so one is that you have a very strong subscriber base and then your price point , and then your library and content. So you don’t see any competitor near you now?

Well we have the best library of over 11,000 films and theatrically we have many new productions. There is always competition but just like here the competition that you see is Disney, Fox, Warner and MGM, you see competition but of you bring a brand and having good content.  Premium content wins. I know it sound cliché,  if you put out good content, you will win. We truly believe that, so that’s what we lead with, First is the best content, and we have the best infrastructure whether through our theatrical distribution or through EROS NOW our digital platform  which we think is the best in the world for Indian content.

TIP: And how about the scenario in the US?

In US you have 4.3 million Indians that’s not including the 3^rdand 4^thgeneration. You have another almost 1 million in Canada. So there is a big opportunity. Here I want to drive this our business and market penetration. I want EROS NOW to be preeminent in the United States and North America. And in order for that to happen again it leads with premium content. If we give the best content, then people want to watch it. So EROS NOW is priced at $7.99 a month in US. Indians in the United States are the highest ethnic group by income than any ethnic group in the country. We have the highest per capita income than any ethnic group including Chinese, or other Asians which is again very strong so $7.99 is not very expensive for an Indian to get the best Indian content offering. How do we get subscribers – we are focused on our tearing strategy of marketing. One is through theatrical distribution to the theaters.  The goal is to use social media correctly as  we are a digital company so we want to use Instagram, we want to use Twitter , we want to use Facebook, we want to digitally advertise our EROS NOW product because the millennial average age is 27 and here also people are becoming more and more digitally oriented including my parents, my 88 year old dad is now learning how to text and tweet. So you have to adapt. So the old school of putting up posters is not how you get the eye balls so for example. Whether it is Priyanka Chopra: she has over 50 million Instagram followers , Donald Trump has 75 million social media followers , we know that we need to get eye balls to view our content. We could do partnerships with some of these folks like a Priyanka Chopra for example. And then we get right there 50 million eye balls. So there are opportunities that we see from a visionary perspective that we think there are going to be new things , new techniques and how to get more subscribers into our system,

TIP:You will be able to attract the subscribers as you say because of the content?

Yes.

“So you have to believe in yourself, you have to believe in your employees, you have to have goals and that’s what you strive to achieve. We will do it with integrity because that is the most important thing. Finally it is important to spend time with your family because that’s what gives you soul, that’s the infrastructure that you need to achieve anything outside.”

TIP:So content is the most important thing?

Yes content is the most important thing because if you have good content then people always want to watch it . Be it Indian, American or other , if it is good content people are going to watch it. If it’s a good play you are going to watch it like Hamilton on Broadway was one of the top plays and everyone wanted to watch it and they could raise their ticket prices . Springsteen on Broadway was sold out for a year. You  could not get a ticket; the second-hand market was charging you had

$1500 to $4000 for a ticket. So that shows you just that if the content is great people will want it.

 TIP: You said merge Hollywood with Bollywood Merge in what sense?

Slumdog Millionaire was a good test so that did well, but it didn’t do well originally at the box office until it won an Academy award. Million Dollar arm which was done by Disney and that was film about 2 cricketers that were trying to find if they could pitch in major league baseball in the US. That didn’t do too well. So again you have got to find the right mix between Hollywood and Bollywood- western content and Indian content that makes sense because culturally it’s a difference. In India only 8-10 % of the box office today is western that’s Hollywood. 88 to 90 % is pure Indian regional content.  Indians are in globally, with healthy and tasty Indian food, Yoga and Bollywood dance studios, so we want to capture viewers globally.

TIP: What I look at when I look at the movies made in India or here, I find here in Hollywood there are very few movies which have Indian content/ story as theme or background , In India the stories which are being made on some American or Canadian or British background , they deal mostly with Indians abroad like you know people living in UK but of Indian origin , Indians living in US, Indians living in Canada. So they are doing really well. So I see your point there that this merger does exist somewhere at some point. And the movies have been doing well.

Yes 100%. You know Aziz Ansari, the Indian comedian did a show for Netflix called Master of None. Very good show and I commend Netflix for the good job done on it and I commend him he did a good job on it. I saw him the other day doing his show in the Atlantic City and he did a great job.  I can see that we can do those what they are doing but perhaps even better. And it’s a show about an Indian American who has come here, immigrant parents and he wants to become an actor and it is almost like Seinfeld and I think more of that can pertain because India is very popular in US now and I have said this many times Indians are in , when we look at EROS or EROS NOW Indians are in whether its Yoga , whether its Indian Food , whether its Bollywood dance which they have studios all over the country now, and there are competitions all over the country whether it’s even Zumba which is again a take off of Bollywood dance, in all of these things we see Indian culture and Indians also I know we are the most affluent ethnic group here one, Two you are looking at Indians now who have conquered Wall Street, you see Indian CEOs on Wall Street. you There are Indian CEOs at some of the top companies in the world like Google, Microsoft, Pepsi, Mastercard and Adobe and they all exemplify the strength of Indians. In addition, most people are not threatened by Indians, we are smart, but we are good people with a lot of intellectual horsepower

TIP:What kind of values are we talking about, the work culture or something more?

So when we talk about values, one is that it is shown by Lead by example. One, it comes from hard work. Two,  it comes from treating everyone with respect. We have close to 500 employees and we treat everyone whether it is the tiffin person in Mumbai to my Executive  Assistant to high end professionals, sales & marketing with the same level of respect as that is important. Three , Integrity. I believe everyone needs to have integrity in this company and ethics are important. I will tolerate mistakes, but I won’t tolerate anyone who does not have integrity. That’s where we draw the line. And then finally Team work, it’s important to be a team player and a lot of companies use that as a cliché, but we mean it. In our company its stressed everyone has a goal, and everyone has to do their bit . But I can’t emphasize enough integrity. To me that’s the most important. It takes many years to build a company and to build a reputation and it can take 15 seconds to blow it all up.

TIP: So you were born here so how come you connect so well with the Indian movies, Bollywood or regional movies without being there or living in that country?

So that’s a great question. I grew up here in US. I did not grow up watching Bollywood films or regional or Indian movies. In fact, my, when we first  moved to the affluent community of Scarsdale, NY , my Mom and Dad would only speak  English in the house. No Malayalam, no Tamil no Hindi , Only English.  They wanted me to assimilate and grow up like a true American. You know I was the only Indian American in grammar school in the first few years. I never felt discriminated even though the color of my skin was brown . At times I would look around and say how come I am brown, and they are white, but I never felt discrimination. Two you learn the American Ideals , good and bad . But that was something my parents wanted for me, to grow up as a true American.    Now, I joined an Indian company and one of the things growing up I missed was the culture. So there was always Indian culture in the house but at the same time I didn’t watch the traditional Bollywood films. I wanted to go see Star Wars. Those are the things I might have  missed growing up, but I am glad that I now get to know and understand more of my Indian heritage. I watch all of our top films and Originals. Most of them are excellent. Bajirao Mastani was one of the greatest films that was produced.  . I loved it. Bajrangi as well.  So while I did not grow up watching Indian movies, today I really enjoy them and love all of our Originals that I usually binge watch as well.

TIP: And how about the language barrier?

Again there are subtitles for everything. If you are in South India and you speak Malayalam, you may not necessarily speak Hindi but subtitles and dubbing solve this problem. We are over  135 countries.

TIP: So I am looking at summing up from you that at the end of the day you may be an accomplished and a brilliant student , you may be an accomplished sportsperson, you may be a successful professional in your career but what counts most is the goodness in you. Being good transcends everything else. Is there anything that you would like to tell our readers. You may conclude with a message.

I think when I think about life in general, I think about all these things. For kids, you want to teach them hard work and good values, strong infrastructure , same with work, EROS International and EROS NOW we want to build the company to new heights. I would like to help Eros to grow to over $10 billion market capitalization company. Today, we are a $750 million market capitalization company, listed on the New York Stock Exchange ticker symbol EROS and we have big growth ahead.  I am very excited.   I mean there is a big opportunity and I believe we will do it. So you have to believe in yourself, you have to believe in your employees, you have to have goals and that’s what you strive to achieve. We will do it with integrity because that is the most important thing. Finally it is important to spend time with your family because that’s what gives you soul, that’s the infrastructure that you need to achieve anything outside. I want to be known as a great father sometimes that means disciplining my kids. They may not like it now but later on they will appreciate it. That also means teaching them the right values so that they treat others with respect, be good to  people and work hard. Finally when this all comes together, whether family or business success, it really all comes down to being a good person. If you are good to others and work hard, God will do the rest. Thank you for your time and God Bless Eros and God Bless America.