Star of India seduces H'wood
Ties with Bollywood grow as biz model changes, local economy boomsA 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 growing interest here mostly is 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 New Delhi-based PricewaterhouseCoopers India in association with industry body the Federation of Indian Chambers of Commerce and Industry, the Indian film industry touched $2.4 billion in 2007, 14% more than in 2006; it's projected to reach $4.4 billion by 2012 at a compound annual growth rate of 13%.
Overall, the Indian entertainment industry is projected to be a $28.9 billion business by 2012, reflecting an 18% cumulative growth.
Reliance Big Entertainment's latest forays into Hollywood, including its $550 million deal for a 50% stake in the new DreamWorks, have come at a time of contrasting economies that benefits the overseas player, PwC entertainment analyst Smita Jha said.
"Indian corporations are acquiring international assets as they are available at low costs since the Indian economy is booming compared to the U.S.," he said. "It's a healthy time for Indian corporations to raise financing for their overseas ambitions, which explains why Reliance could take this step."
The PwC 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 also are seeing major developments.
This year, RBE'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. 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, Warner Bros. Motion Picture Imaging and Chennai, 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. (partialdiff)