Entertainment One specialises in the development, acquisition, production, financing, distribution and sales of entertainment content. Its rights library is valued at US$2.0bn and is exploited across all media formats.
eOne’s FY18 results showed strong (21%) growth in underlying EBITDA. The Family & Brands division is benefiting from the higher margins from advertising and streaming video on demand (AVOD and SVOD), with underlying EBITDA up 28%. Film, TV & Music’s performance reflects the completion of the transition in film and the shift in mix toward TV, with an improvement in underlying EBITDA margin from 11.6% to 14.6%. The group has confirmed that Chief Content Officer Mark Gordon is staying with the group. It has also issued new senior secured loan notes for £425m due 2026, to redeem the previous £355m SLN 2022, saving an annualised interest cost of £8m (not yet incorporated into our forecasts).
SVOD is rapidly gaining share, growing at a reported 20% CAGR. Competition between platforms is driving the requirement for premium content and, despite the proliferation of non-linear distribution channels, there is still a tendency for the audiences to gravitate towards particular hits. This is driving a trend to high production values, with the real underlying competition to grab and maintain audience attention. eOne’s platform-agnostic stance allows it to take good advantage of the market vacillations.