MUMBAI: Eros Group, the largest movie producer in India, is in talks with Apple Inc, the world's most valuable public company, to sell its entire content library of films and music for around $1 billion multiple sources aware of the ongoing negotiations. A deal may also include their digital OTT platform, Eros Now, billed as the Netflix of Bollywood.Parallel discussions with rival media and technology majors Amazon and Netflix have also gathered momentum as the Kishore Lulla led company is planning to embark on a mega restructuring exercise that is likely to result in a reverse merger of its NYSE listed parent Eros International Plc into its locally listed subsidiary Eros International Media by the end of this financial year to create a single listed firm. The move is seen as an attempt to soothe investor nerves that has rattled since 2005 repeatedly over allegations of corporate misgovernance, non-transparent related party transactions, financial malpractices and fraud. The company has always denied any irregularities.Eros' Indian listed entity is the subsidiary of Eros PLC which owns approximately 73 per cent in Eros India. Eros PLC manages the overseas distribution of the films and houses Eros Now while Eros India is the main operating entity, primarily responsible for content creation.If successful, Eros India's library of over 3000+ Indian films (Bollywood and regional blockbusters), the largest in the country of which over 50 per cent the company has long term rights, would give any potential suitor unbeatable access to premier entertainment content as the war over music and video streaming intensifies between stand alone service providers, media and entertainment conglomerates, telcos and digital OTT companies.Eros Now, its digital arm that is currently housed under the US parent, also has rights to over 10,000 films, out of which around 5,000 films are owned in perpetuity, across Hindi and regional languages from Eros’s internal library, as well as third party, aggregated content. It has close to 2.9 million paid subscribers and over 100 million registered subscribers as of June 30, 2017.Eros and Apple Inc's Spokesperson declined to comment on speculation. Mails send to Amazon and Netflix on Saturday did not receive a response till going to press on Sunday."Discussions are on to monetise the library. An announcement is likely soon," said an official directly involved. Another official while confirming the discussions were ongoing said it may take some time for it to fructify.Founded in 1977, Eros co-produces, acquires and distributes Indian language films in multiple formats worldwide. Eros expects to maintain more than half of the rights it presently own through at least December 31, 2025. In a recent investor call, Jyoti Deshpande, Group CEO and MD, Eros International had said that the company has decided to move away from large-scale acquisitions and focus on co-productions, a move which industry experts say fuelled more from the cash crunch situation and recent big-ticket failures."For a foreign player like Netflix, Apple or Amazon also the deal makes sense as they will get a big bump in terms of Quality movie content that will help in getting more subscribers and it will make the Indian OTT market more competitive. If Apple decides to go down this path, it will make Apple TV a strong player in the OTT space," said Girish Menon, partner and head - media and entertainment at KPMG in India."The company is under liquidity pressure. It had to pull the plug on its bond earlier this year when allegations resurfaced. Only in FY16, the company generated some free cash flows and the promoters have recently been selling shares in US to reduce debt. So divesting its catalogue or consolidating corporate structure into a single entity is becoming a necessity given the multi level holdings, various subsidiaries in different regions," said a film industry veteran who also did not wish to be named.As of March 31, 2017, Eros had $271.5 million of borrowings outstanding of which $180.7 million is repayable within one year.With lion's share of its revenues and operations in the Indian entity, analysts believe a reverse merger (parent merging in the subsidiary) will have major upside as the entire content ownership would vest with a single set of shareholders. In the current structure, the India listed entity doesn't get the overseas upside and may participate only partially in "Eros Now" whereas a merger will also address concerns of minority investors on transfer pricing between the parent and the Indian entity.In the past, Eros has been in talks Fullerton and Amazon to sell a stake in ErosNow at a $800 million valuation and had engaged investment bank Moelis & Co to identify a strategic partner.“For Eros, the biggest strength is its content library. We are always in talks with multiple players to syndicate content and monetise the library,” said a senior executive in Eros on condition of anonymity."Presence of foreign players will also drive up the content cost and hence increase the value of the existing library. Eros India is by far the leader in film content and is best placed to benefit from content monetization perspective. The best part is Eros India's library continues to growth at healthy pace (company produces ~60 films per year) and typically has 2-3 films in the top 10 grosser every year. BARC ratings for rural India indicate that rural India could also be an avenue to further monetise its catalogue. Catalogue monetization -- even a part sale -- would realize the true underlying potential of the company," said Govind Agarwal and Omkar Hadkar, analysts Antique Stock BrokingThe Indian OTT space has seen major in the last 18 months. After Netflix’ entry, Amazon started acquiring film titles aggressively. While Netflix has signed deals with Shahrukh Khan’s Red Chillies Entertainment and Aamir Khan, Amazon Prime Video , launched last year, has invested heavily in exclusive movies and TV shows and stand-up comedy content. It has signed long-term output deals with major production houses – Yash Raj Films, Excel Entertainment, Dharma Productions, Vishesh Films and TSeries and latest deal with Salman Khan for all his existing and future films.Amazon, which has earmarked Rs 2000 crore investment for video streaming service in India alone, is also is in talks with music labels to acquire content for Amazon Music, which is expected to launch in India next year. It has already signed deal with TSeries, which owns the majority market share in the music space. Eros Music is also one of the leading players after TSeries, Sony Music and Saregama.Analysts say, because of its aggressive pricing and added benefit of free-shipping, Amazon Prime has seen a strong subscriber growth in India. With the launch of Prime Video at no added cost (Prime subscription is available for Rs 499 for 1 year), the subscriber numbers have doubled in the last six months. The actual numbers are not disclosed.As per industry estimates, after Hotstar, Jio TV and Voot, Amazon Prime Video has maximum active users among the video streaming services. It is far ahead of Netflix, which has minimum subscription plan of Rs 500 a month. However, most of the catchup TV content on Hotstar is free (ad-supported). Only the premium content is behind the paywall for a monthly subscription of Rs 199. Jio TV and Voot, on the other hand are free for users.Apple Music too have been buying international content like Apple's Carpool Karaoke Show. Apple Music has also released albums in the United States, including Chance the Rapper's album Coloring Book, directly through its music streaming service and without any record label being involved. In India, the company charges Rs 120 a month for individual membership services after a three-month free trial, and has notched up to 400,000 subscribers. In comparison Gaana.com, Gaana.com, a division of Times Internet, the digital arm of The Times Group that publishes The Economic Times has about 28 million monthly active users.In India however, Apple isn’t growing much feel industry watchers, because there are many competing offerings that stream music for free and charge only for removing ads or downloading music. Local competitors like Saavn started out as a library for iTunes, then branched into streaming by itself. Today it has around 20 million users, around 16 million paid users. Since the crux of the service is to provide Indian music, the 20 million in question are largely of Indian origin. However, the company was planning to invest about Rs 50 crore on music-related content for users in India, curating localised playlists with a special emphasis on films, fashion and music, said an official in the know.However, Apple traditionally has also shied away for large M&As compared to Silicon Valley peers Facebook, Google and even while Microsoft Corp, instead of buying mostly small startups for new tech and talent, thereby hampering strategy shifts feel tech watchers.Instead its CEO Tim Cook has so far focused on growing Apple’s services businesses, including Apple Music, the App Store and iCloud. Its biggest deal in its 41-year history was the $3 billion purchase Beats Electronics-- maker of millennial headphones, speakers and hip hop label in 2014. Wall Street analysts have therefore been hankering for a mega buyout, especially in online video streaming even as Apple has started distributing videos through its music service and pooling other's videos in its mobile TV app, but it has no service comparable to Netflix or Amazon Prime.In recent years though, the maker of iPhone has been linked to takeovers of Netflix, McLaren Technology Group and even Time Warner. Earlier this year, Sanford C. Bernstein analyst Toni Sacconaghi said Apple needs at least one big acquisition in online video.To reach its $50 billion target, the company must find an extra $13 billion in services revenue over the next four years -- beyond what it can generate itself. Other potential blockbuster Apple acquisition targets include Walt Disney Co. and electric carmaker Tesla Inc, Baird analyst William Power wrote in a note to clients this year.(Additional reporting Shaswati Shankar in Bangalore & Deepali Gupta in Mumbai)