Global Economics

Hollywood Meets Bollywood as India's Movies Go Global


Western studios are working to cash in on India's box-office potential, as demonstrated by the success of Slumdog Millionaire

Director Danny Boyle's Slumdog Millionaire, the rags-to-riches story of an Indian boy who makes it big on a game show, is favored to take home many Oscars at the Academy Awards on Feb. 22. It's already a winner in India, where it has broken new ground as the most successful example yet of the local film industry teaming up with Western partners. The movie is based on Q&A, a book by Indian diplomat Vikas Swarup, was directed and produced by British professionals, filmed in India with a Bollywood cast and music score, and distributed by a Hollywood company, News Corp.'s (NWS) Fox Searchlight.

Win or lose at the Oscars, Slumdog's success at the box office (it's brought in more than $80 million) will give a major boost to efforts by Western studios to get a foothold in the Indian film industry, which is the world's most prolific with 1,000 films a year. Over the last two years, major studios from Sony Pictures and Disney (DIS) to Warner Brothers, and Paramount have been wooing the movie-mad Indian audience by teaming up with local directors and production houses, filming locally, and acquiring finished movies. For Hollywood, India is an important growth market: Indian box-office revenues are likely to double to $4 billion by 2012, according to a 2008 entertainment industry report by the Federation of Indian Chambers of Commerce & Industry and PricewaterhouseCoopers. That compares to a $9 billion market in the U.S., according to Walt Disney India.

Bollywood is equally keen to go global and reach out to a global audience and the affluent Indian diaspora. It has made several attempts so far: Indian producers have set up offices in the U.S. to oversee distribution, while some entrepreneurs have been pursuing their Hollywood dreams aggressively. On Feb. 6, tycoon Anil Ambani's Reliance Big Entertainment said it had signed separate development deals with the production companies of actress Julia Roberts and director Brett Ratner. Reliance last year announced similar deals with the production companies of Brad Pitt, George Clooney, Tom Hanks, Nicolas Cage, and Jim Carrey. When DreamWorks SKG wanted to separate from Paramount last June, Steven Spielberg and David Geffen turned to Reliance, which is expected to part-finance the $1.2 billion debt-equity deal for DreamWorks. On Feb. 9, DreamWorks announced an agreement with Disney, which will distribute movies the studio produces with Reliance.

Hollywood Partners for India's UTV

Hollywood has been making some moves in the reverse direction. The Motion Picture Association of America on Feb. 16 opened its first office in India. Michael Ellis, president and managing director, Asia-Pacific, for the Motion Picture Assn., says that though it's "wonderful to be part of the Bollywood passion," his office will focus on strengthening the enforcement of intellectual-property rights in India. Bollywood lost $1 billion in revenue in 2008 due to piracy alone.

One beneficiary of Hollywood's growing interest in India is Mumbai-based producer UTV. In 2007, UTV and Fox co-produced Indian-American director Mira Nair's The Namesake. UTV was also co-producer of Indian-born director M. Night Shyamalan's The Happening, which opened last year and has pulled in more than $160 million globally. Will Smith's Overbrook Entertainment is co-producing an animation and live-action Hollywood movie with UTV for Western audiences. Disney owns 57% of UTV, having spent an undisclosed sum to buy the stake over the last two years.

Figuring out a way to translate Bollywood for Western audiences isn't easy, of course. Part of the reason is because Bollywood's parochial formulas, which work wonders locally, do not resonate with Western audiences. "The cultural insights are tough and rare to find," says Jaideep Sahni, Bollywood screenwriter-lyricist and creative producer. Slumdog seems to have bridged the cultural gap: It has all the ingredients of a Bollywood potboiler—poverty, survival, love, and triumph—with limited songs, satisfying both Western and Indian audiences. It also treads on familiar territory: the underbelly of Mumbai, India's most energetic and dazzling city of immigrants.

U.S. Studios Yet to Score Indian Hit

Many of the Hollywood studios, however, have struggled to find the right formula ever since they began to look at making films in India. Sony's love story Saawariya, released in November 2007, was the first movie made by the studio in India. Produced for an estimated $9 million, it barely broke even in its short run. Disney's Roadside Romeo, co-produced with Bollywood's Yash Raj Films and released last October, had just a three-week run. While the picture's impressive animation meant it was well-positioned in India, a country with a large population of children, critics found the dialogue too adult for children to comprehend. "I'm not sure who Roadside Romeo is created for. Its humor is not very child-friendly," said Anupama Chopra, film critic on Indian news channel NDTV.

Disney says the picture did well. "The box-office numbers floating around are $4 million," says Mahesh Samat, chief executive of Walt Disney India; however, that's below the $6 million level that many in the industry have as a threshold for success. Disney's forthcoming productions include two live-action films, including a Tamil-language martial-arts movie featuring local star Kamal Hasan. "The movie business is not a single-film business," says Samat. "We are here to stay."

Meanwhile, Warner Brothers has tested the waters with the martial-arts genre. The studio released a $9 million kung-fu comedy, Chandni Chowk to China, with Bollywood's top-billed star Akshay Kumar, last month. Warner's country head Blaise Fernandes says the film was a success, making $9 million in the first week alone. However, some analysts are skeptical. "Chandni Chowk is the most overrated film to hit India in recent times," says Mumbai-based independent film trade analyst Amod Mehra, who calls it "one of the biggest flops in Bollywood."

Hollywood executives explain that India is a tough place to make a film because there are no proper studios, while identifying vendors and traveling to their companies is time-consuming. "The scale of operations is so fragmented here that it became mind-boggling," says former Sony Pictures India executive Uday Singh, referring to the making of Saawariya. Sony has acquired a string of Hindi-language movies for release. They include Straight, the quirky tale of a 40-year-old virgin confused about his sexuality, and Tere Saath, a story about teen pregnancy in urban India.


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