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NEW DELHI — In the highly fragmented, ego-driven world of Bollywood, it’s not every day you see producers take a united front.
Take Shah Rukh Khan and Aamir Khan. Last summer, the two local superstars were at each other’s throats, keeping Mumbai gossip columns busy as they traded personal barbs in print. Aamir Khan went so far as to use his blog to announce he had named his dog after his rival.
So it was all the more impressive when the pair took the stage together at a United Producers Forum press conference in April, a show of solidarity as producers went on strike against multiplex owners after revenue-sharing talks fell apart.
At the end of the day, star squabbles and one-upmanship simply paled in the face of a recession that has sobered the more breathless growth projections of recent years.
In 2008, the Indian film industry registered revenue of about $2.27 billion, a growth of 13.4% from the year prior, according to the latest report from the Federation of Indian Chambers of Commerce and Industry and consultants KPMG India. But the report cautions that future growth will be at a compound annual growth rate of 9.1% and touch $3.5 billion by 2013. This contrasts with FICCI’s 2008 report, which predicted that the film industry would grow at a rate of 13% and hit $4.4 billion by 2012.
“There is definitely going to be a de-growth this year of 2%-5%,” says Rajesh Jain, an executive director at Mumbai-based KPMG India.
The consensus is that content will remain king despite the recession, as evidenced by the success of two major December hits: Shah Rukh Khan’s “Rab Ne Bana Di Jodi” and Aamir Khan’s “Ghajini.”
But ancillary revenue streams have taken a hit, “especially television, music and home video as buyers struggle with cash flows problems,” Studio18 senior vp international operations Hemant Bhardwaj says.
“Beyond just the slowdown, the spiraling cost of film production and fewer hit films compared to the past will mean (fewer) releases this year,” adds KPMG’s Jain, who points out that raising funds is getting more difficult given the overall liquidity crunch.
And thanks to the strike, the year’s theatrical calendar has been shortened as well.
“We won’t have much time to market films given the backlog of releases piling up, which could impact overall collections,” says Mumbai-based UTV Motion Pictures CEO Siddharth Roy Kapur, who adds that UTVMP’s ’09 production slate of about 15 titles remains “on track.”
In addition to the local woes, the recession is trimming back Bollywood’s global ambitions, perhaps best exemplified by last year’s announcement that Reliance Big Entertainment would fund DreamWorks’ exit from Paramount for about $550 million as part of the joint venture’s overall $1.4 billion investment plan.
In early April, Indian business paper Mint quoted an executive from RBE parent Reliance-ADAG, who said that the joint venture would be trimmed to $700 million, a halving of the $1.4 billion originally planned.
“Since the world itself is going through a financial crisis, DreamWorks has decided to pare its contribution to $350 million. Correspondingly, Reliance-ADAG will also bring in only that much equity to the venture,” the executive said.
RBE executives are expected to be in the spotlight at Cannes this year all the same, due in no small part to last year’s separate announcement of $1 billion production plan to fund projects with top Hollywood banners owned by such stars as Brad Pitt, Tom Hanks, George Clooney and Julia Roberts.
Another project battling for Cannes hype comes from animation outfit Compact Disc India, which will be on the Croisette to promote its latest project, a football feature based on Brazil’s legendary football star Pele.
Despite the ratcheted-down expectations, there’s no denying that the past 12 months have truly seen Bollywood go global, due in no small part to the Oscar glory reaped by Danny Boyle’s “Slumdog Millionaire.”
“While it is hard to quantify the impact that (the success of ‘Slumdog’) has had or will have on distribution and sales (of Indian content), the film’s run will definitely see the Indian industry receiving renewed attention,” Studio18’s London-based syndication and media sales boss Tanuj Garg says.
Studio18 affiliate the Indian Film Co. recently announced a co-production pact with U.K.-based “Bend It Like Beckham” director Gurinder Chadha for her latest, “It’s a Wonderful Afterlife,” which will feature a mix of international and Indian talent.
Bollywood producer Sajid Nadiadwala’s “Kambhaqt Ishq” (Notorious Love), meanwhile, represents a first of sorts. Distributed by London-based Eros International, the film brings together U.S. stars Sylvester Stallone, Denise Richards and Brandon Routh alongside top Bollywood hero Akshay Kumar and actress Kareena Kapoor. Thanks to the presence of stars like Stallone, the project is seen as an extension of a Hollywood-Bollywood connection that has been largely behind the scenes to this point.
“Much of the dialogue has been … joint ventures for content distribution across all formats, monetizing libraries and exploring opportunities to create crossover films that will tap into India’s booming local language market as well as wider audiences outside of India,” Eros International group COO and commercial director Jyoti Deshpande says.
That potential has lured a growing number of U.S. studios to set up shop in the market.
And while Walt Disney’s Indian animation debut “Roadside Romeo” — co-produced with veteran banner Yash Raj Films — performed below expectations, as did the debut Bollywood offerings from Warners and Sony, no one expects the studios to retrench anytime soon.
As Jain puts it: “The Hollywood studios are here for the long haul.”
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