Hollywood committed to Mumbai
Bollywood worries about affect of attacksTerrorism has cast a shadow over Bollywood, but as the smoke clears from the attacks of Nov. 26, Hollywood studios with Indian interests remain committed to the region.
When a gang of as few as 10 men stormed Mumbai with automatic weapons last Wednesday, killing 183 people, including 18 foreigners, business in India's financial capital ground to a halt. An additional 239 were wounded, including 22 foreign visitors to the port city of 19 million.
Cinemas -- some set to open 20th Century Fox's "Max Payne" -- closed Thursday and Friday, and many stayed shuttered Saturday, too, as the five-star Taj Mahal Palace & Tower Hotel -- the sometime Bollywood home to many celebrities and media executives -- burned for a third day. Not until Saturday night did Indian commandos finish rooting out the attackers with grenades and rooftop raids at the Taj and other sites around the city.
Australian TV actress Brooke Satchwell, 28, barely escaped a Taj bathroom with her life as gunmen mowed down guests in the hallway. German media entrepreneur Ralf Burkei, 51, was not so lucky. He leapt from a height at the Taj and died on his way to hospital.
"(The attacks are) a shocking blow to all of those in India and all of those who do business there," said Pete Smith, London-based president of NBC Universal International, who has led expansion in Asia and said he regards India as one of the most exciting growth prospects.
Smith, a regular in India thanks to NBC Uni's 26% stake in Mumbai- and New Delhi-based channel group NDTV, said that travel to Mumbai is out for now but that he will be flying to New Delhi this week.
The Mumbai tragedy comes at a time when Bollywood was very much on Hollywoods's lips. Mumbai-industrialist Anil Ambani recently invested $550 million to back Steven Spielberg's new studio.
U.S. writer-director Paul Schrader, who has teamed with Indian director Anubhav Sinha for the Bollywood pic "Extreme City," said he will continue to move forward with the project exactly as he was before the attacks. Schrader is writing and directing the cross-cultural thriller while Sinha will produce; Schrader is currently working on the script.
Indie director Jennifer Lynch is making the India-set mystery "Hisss" and Will Smith's Overbrook Entertainment has a deal to produce two movies with Indian entertainment company UTV.
However, some wonder if last week's events might do more than chill travel.
"The timing couldn't have been worse as media sentiment for next year is soft," said Asia media industry analyst Vivek Couto. "What will be important to see are capital flows in India."
Spokespeople from most media companies with Indian interests said that at this stage they simply are monitoring the situation.
In 2007, India received a record $98 billion in capital inflow. Over the first half of 2008, inflows were healthy but have slowed in recent months due to the broader global economic downturn, said Couto, director of Hong Kong-based Media Partners Asia.
Already, cricketers from Australia and Pakistan have backed out of an Indian tournament set to broadcast Dec. 3 on ESPN Star Sports, and Ambani's Reliance Big Broadcasting has put off launching new channels, Couto said.
Abhinav Chopra, Viacom's vp for human resources said that all of the company's employees are safe and that the attacks have had no adverse affections on operations. Alannah Hall-Smith, Disney Asia Pacific's vp for corporate communications said that while the situation is "terribly sad," the company remains "committed to our dedicated teams and the Indian market."
Compounding the fresh image problem facing the media industry is a forecast drop in Indian advertising revenue growth to 12.1% in 2009, down from an increase of 17.6% this year and 22.1% in 2007, Couto said.
"This means that the ad pie in highly competitive TV and print markets will not be as infinite as new entrants and expanding incumbents may have hoped for," Couto said, adding that the rising costs to produce and distribute TV content also was adding pressure.
How Mumbai's markets -- India's biggest -- the city's consumers and media industries fare in the days and months ahead will depend partly on the strength, focus and execution of the government, soon up for reelection.
Said NBC's Smith: "We all feel very confident that the authorities will act to resolve the situation."
Indeed, Couto expects that Indian media companies will grow at an average rate of 23% over the next two years, boosted by a stronger ad economy and media distribution, rising margins due to greater control of production costs and the growth of subscription and program sales revenue.
"Overall, it's an encouraging picture, but next year will prove challenging as sales growth falls below 25% from 40% in 2008, while earnings growth is more than halved to 3.3% vs. 7.2% in 2008, and average profit margins slip to 14% from 17%," Couto said.
Mimi Turner reported from London. Jonathan Landreth reported from Bangkok. Steve Zeitchik contributed to this report from Los Angeles.