India, Hollywood's newest star
Reliance-DreamWorks deal just the latest icing on the cakeRelated: Q&A: Gunjan Bagla
NEW DELHI -- A recent flurry of deals between two diverse film cultures looks like the beginning of a beautiful friendship, heralding not just the arrival of Hollywood studios in Bollywood but also Indian majors heading West.
The cross-pollination isn't expected to stop anytime soon. With U.S. majors salivating over India's entertainment-industry boom and India looking to adapt Hollywood's studio model to capitalize on the crush, companies are rushing to partner up.
Hollywood's first major Indian close encounter came in December, when Sony became the first studio to produce a Bollywood feature, "Saawariya."
That was followed quickly by announcements from Disney, which will bow its first co-production here, "Roadside Romeo," on Oct. 24 with veteran Bollywood banner Yash Raj Films. Later, Disney announced a slate of four live-action features via its own Walt Disney Pictures India banner, which will produce the martial arts title "The 19th Step" and kids caper film "Zokkomon."
Warner Bros., meanwhile, greenlighted its first Bollywood feature, "Chandni Chowk to China" (earlier titled "Made In China"), co-produced with veteran film-maker Ramesh Sippy. It bows in January.
Warners also inked a multipicture co-production deal with South India-based Ocher Studios, reflecting Hollywood's interest in not just Hindi cinema (Bollywood) but the vibrant regional-language film industry as well.
Fox Star Studios India is the latest major to land here via a multiple-picture deal with Bollywood producer Vipul Amrutlal Shah.
Indian players also are displaying global ambitions, like Mumbai-based group UTV, whose film unit UTV Motion Pictures has inked international co-production deals with such Hollywood players as Will Smith's Overbrook Entertainment and Fox, with which it equally produced M. Night Shyamalan's $57 million "The Happening."
One of India's biggest conglomerates, Reliance ADAG, first announced its Hollywood ambitions for group company Reliance Big Entertainment this year at the Festival de Cannes via a $1 billion pact with the production banners of such A-list talent as Tom Hanks, George Clooney and Brad Pitt, among others.
Of course, that was topped with Reliance concluding a deal to fund DreamWorks' exit from Paramount for $550 million.
New Delhi-based PricewaterhouseCoopers India entertainment analyst Smita Jha said that Reliance is "probably facing the same risks as previous foreign players have had in Hollywood.
"But Reliance's entry comes at a great time, when Indian corporations are acquiring international assets as they are available at low costs since the Indian economy is booming compared to the U.S. It's a healthy time for Indian corporations to raise financing for their overseas ambitions, which explains why Reliance could take this step."
Hollywood's growing interest here is mostly explained by the sheer market potential in addition to the government allowing 100% foreign investment in the film industry. According to a recent report by PwC in association with industry body the Federation of Indian Chambers of Commerce and Industry), the film industry touched $2.4 billion in 2007, 14% more than in 2006; it's projected to touch $4.4 billion by 2012 at a compound annual growth rate of 13%.
Overall, the Indian entertainment industry is projected to reach $28.92 billion by 2012, reflecting an 18% cumulative growth.
The report also sees a shift to a Hollywood-style studio model, which "is further de-risking the business," it said.
Mumbai-based Fox Star Studios India managing director Vijay Singh is clear in his mandate to establish the studio model in India because "traditionally, producers here have been working in a fragmented way, especially in areas like distribution, which is run by independent players. We offer a one-stop shop across the board, from creative inputs to marketing."
Although a Hollywood model is seen as a positive step, the entrepreneurial spirit of Indian producers will still thrive, said "Chandni Chowk to China" producer Rohan Sippy, whose father Ramesh directed one of Indian cinema's most successful films, 1975's "Sholay."
"Creatively, I really don't think "Sholay" would have been done in any different way even today if it was produced by a major studio," the younger Sippy said. "But yes, what the studios also offer are strong marketing and access to wider markets."
Beyond film production, other areas including theatrical and postproduction also are seeing major developments.
This year, Reliance Big Entertainment's theatrical and film services unit Adlabs Cinemas, which runs India's largest multiplex chain with more than 175 screens, acquired 180 cinemas in the U.S. largely serving the South Asian population. RBE then bought California-based film-restoration specialist DTS Digital Images (Lowry Digital Images) for about $7.5 million.
"We really see these acquisitions as part of our efforts to scale our strong domestic base by going global," Adlabs Cinemas CEO Anil Arjun said.
On the other hand, Burbank-based Warner Bros. Motion Picture Imaging and Chennai, South India-based film services company Prasad Corp. recently announced a strategic alliance that brings their combined skills and strengths in digital postproduction and film restoration to clients in Hollywood, India and around the world.