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When Sony Pictures’ “Saawariya” premieres in Mumbai today, it will mark a turning point in Hollywood’s arms-length relationship with Bollywood. That’s because “Saawariya,” an all-singing, all-dancing, all-talking spectacular, is the first Hindi-language movie ever to be financed by a major U.S. studio.
The film’s release marks the culmination of a frenzied 18 months in which the Hollywood majors have been falling over themselves to invest in Indian films following corporate investments in other parts of the entertainment industry. Top-level studio execs from Disney chairman Dick Cook to Sony Pictures Entertainment chairman Michael Lynton have made the agonizingly long pilgrimage to Mumbai, eager to sign deals with the second-biggest movie industry in the world. After months of talks, a slew of such pacts has closed In some cases, as with “Saawariya,” the studio is fully financing the movies; in most cases, they are joint investments, with the studios frequently putting in 50% of the coin.
Among the recent deals:
*In the summer, Warner Bros. committed to fund three films made by veteran producer Ramesh Sippy, with the first, “Made in China,” due to start shooting in January. Warners also has hired three new executives for its Mumbai office, specifically charged with developing local product.
*This year, Disney agreed to make animated movies with Yash Raj Films, a well-known Indian production company. The first, “Roadside Romeo,” will be released next year. Disney has no total number of pictures that it plans to make, but motion picture group president Mark Zoradi says he’d like to invest in others on an ongoing basis. (Disney also has bought a stake in a Mumbai production company, UTV.)
*Paramount Pictures parent Viacom has formed Viacom-18, a joint venture with local television broadcaster TV18, and might make features through its subsidiary, the Indian Film Co.
*Sony has signed a deal with Eros International, an India-based production company, to make as many as six pictures during the next year budgeted in the $5 million-$10 million range.
“India is a huge subcontinent and it has a huge moviegoing population,” says Gareth Wigan, vice chairman of Sony’s Columbia TriStar division, who is now in Mumbai for the “Saawariya” premiere. “Even if you forget the little pictures, it still supports 400 movies a year.”
But until recently, none of those films had significant U.S. involvement. So why now?
The answer has to do with a worldwide movie business going through radical change as local industries expand at a dizzying pace and the studios see their share of foreign boxoffice diminishing.
Aware that foreign audiences are more drawn to indigenous product, the studios increasingly have been making it themselves.
“I have been doing this now for over 10 years,” Wigan says. “We started in China and Germany and gradually expanded, territory by territory, and have now made films in 12 countries.”
Sony isn’t alone.
Richard Fox, executive vp international at Warners, says his studio has made films targeted purely at local markets in a wide range of countries, from Mexico to Brazil. Now Warners aims to make three to seven pictures annually in India.
“If you are in the business of local-language production — which we are — you can’t exclude Hindi-speaking movies, or movies in any of the top two or three languages in India,” he says.
Changes in the Indian economy and film business have made this more feasible than ever before.
In the past, Bollywood maintained a relatively closed-door policy toward the studios. But Bollywood has opened up; the cronyism that once marked the Indian industry is gone, and an explosion in local exhibition is fueling what many expect to be a huge growth in moviegoing.
So far, the Hollywood studios have failed to tap into it.
Fox notes that many midbudget or lower-budget U.S. pictures have struggled to find an audience in India. Even such hefty performers as Sony’s “Casino Royale” or Disney’s “Pirates of the Caribbean” franchise haven’t been able to lift the majors’ share of Indian boxoffice above 6%-8% of the total — a paltry sum compared with what the they pull in from most other foreign territories.
Last year, the majors earned a mere $60 million in India — and that is considered a vintage year. Given that India’s total box-office for 2006 was a whopping $1.58 billion, this is cause for alarm.
There’s also strong reason to believe that potential revenue in India is rocketing upward. “It’s a vibrant theatrical marketplace,” Zoradi says.
A recent PricewaterhouseCoopers report estimates that Indian boxoffice will top $4.27 billion by 2011.
“They all think that India is booming, which it absolutely is,” says Ashok Amritraj, the best-known Indian producer based in Los Angeles. “Real estate, information technology, software, the telecom industry — it is just growing in a way I have never seen before.”
The question is how to access that growth. For Zoradi and other executives, the solution is to invest in local product, teaming with established Indian producers to do so.
“Our strategy is to make movies in India, for India,” Zoradi says. “We are not trying to make global exports; we are looking to do Indian movies that can play locally in India and to Indian audiences in the U.S. and the U.K. and a few other markets. If we end up with a movie that can travel, that’s great. But our primary objective is to make movies that work for India.”
A new breed of studio chiefs is backing this strategy. Executives such as Lynton and Warner Bros. president Alan Horn did not grow up in Hollywood but have strong ties to the global business community, and they have pushed their lieutenants to think beyond the parochial.
“Michael has a very international mind and attitude, Wigan says. “He is the very opposite of your prototypical Hollywood executive, for whom the heart of the world is the Hollywood Hills. So there has been great encouragement to look to places like India and Russia, where movies make a lot of money and we are not getting it.”
Wigan admits that he was surprised by just how big the Indian film business is, with about 1,000 annual releases.
His colleague Deborah Schindler, who was named at the start of the year president of Columbia’s international movie production department, was equally surprised when she flew to Mumbai and watched “Saawariya” being filmed on a spectacular set.
“It was a re-creation of Venice, which included a working canal with gondolas and water and bridges and fountains. It was just breathtaking. I have been on many sets in my lifetime, but I was struck by the scale.”
Fox chairman Jim Gianopulos — the latest high-level executive to venture to India — reportedly was equally impressed when he went to Mumbai last month to investigate possibilities.
But Gianopulos and his colleagues know perfectly well that Americans have tried to do business in India and sometimes failed.
When satellite television first arrived in the early 1990’s, such players as News Corp.’s Star network and Viacom’s MTV struggled to compete against domestic broadcasters like Zee TV, which launched with local-language content. Many U.S.-backed television companies faltered when they showed international rather than local product.
By the late ’90s, the international broadcasters also had gone local — indeed, Star enjoyed a massive hit with an Indian version of “Who Wants to Be a Millionaire?”
“The studios learned from their television counterparts that going local is the only way to go,” says Aditya Shastri, the former managing director of 20th Century Fox India and now CEO of Mumbai-based startup banner People Pictures. “Of course, TV by its nature is more nimble to adapt, compared to film. But now the studios have seen the light.”
But have they? Some insiders seem skeptical.
“India is a peculiar market, where Hollywood has not garnered significant market share,” Shastri says.
Others seem skeptical of Hollywood’s long-term commitment.
“The Hollywood studios are here purely for commercial and not artistic reasons,” says Vishal Bharadwaj, one of India’s most acclaimed filmmakers (“Maqbool”). “They are here to cater to the Indian market with formulaic films. I don’t think they would be interested in offbeat and edgy fare.”
More insiders fear that Hollywood’s arrival will lead to price inflation — an inflation that already is troubling to many Indian filmmakers.
“A year ago, the most expensive films were probably around $10 million; today it is commonplace for a movie to be between $10 million-$15 million,” Amritraj says. “Actors have gotten a 100% raise in the last year. The problem is that there are only probably 10 actors and five or six directors who are names of consequence. They are very sought after, and their prices have risen dramatically.”
Warners’ Fox and his colleagues dispute the notion that they will contribute to inflation, arguing that they are teaming with local producers specifically to avoid that, and also to learn from them.
Still, a raft of issues could prove daunting.
Will the talent work with Hollywood if it doesn’t pay better rates? Will filmmakers make movies for the studios if their films aren’t guaranteed a big U.S. release? Why, in the end, should they do business with Hollywood at all?
“From their standpoint, the studios have very little to offer except money,” Amritraj says. “And there is an overabundance of money available in India, from corporate houses, the stock market, individual investors, everywhere.”
Money, of course, is what Hollywood wants most of all. Ultimately, the real money might lie outside the movie business. Investing in films, some argue, could be a loss leader to pave the way for larger ventures in India — like a localized Disneyland India or a localized Universal Studios India.
“There has got to be another long-term game plan,” says Amritraj, “since the film business, on its own, is not big enough.”
Nyay Bhushan reported from Mumbai; Stephen Galloway reported from Los Angeles.
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