Bollywood Dreams: Film Centers Get Closer

HOLLYWOOD gave Bollywood its name. Now, Bollywood is giving Hollywood its money.

The potential deal between Indian billionaire Anil Ambani and Steven Spielberg's DreamWorks SKG is the latest -- and largest -- sign of a growing closeness between the world's two largest movie-making industries that promises to transform both.

For Hollywood, India promises a new and deep source of funding as Bollywood -- fueled by strong economic growth and a massive movie-going population -- throws off money. Hollywood also could gain greater access to one of the few major movie markets it has yet to crack. Walt Disney Co., Sony Corp.'s Sony Pictures, Viacom Inc. and Time Warner Inc.'s Warner Brothers Entertainment in the past year all have boosted their investments in media companies or making movies in India.

For Bollywood, a significant presence in Los Angeles would mark the fulfillment of years of ambition to extend beyond India and its neighbors and to crack the highest echelons of global film making. Indian movie makers also are looking to import Hollywood's higher production values and a Hollywood-style studio film-development system that Bollywood traditionally has lacked.

'It is irrefutable that Hollywood is the fountainhead of content for the world,' said Rajesh Sawhney, president of Reliance Big Entertainment, the Mumbai-based company controlled by Mr. Ambani, in an interview. 'Any company with global ambitions needs a home-market advantage and it also needs to have a Hollywood strategy.'

Mr. Sawhney declined comment on the discussions between Reliance and DreamWorks. The Wall Street Journal reported Wednesday that the principals of DreamWorks are negotiating a deal with Reliance Big Entertainment to form a new movie-making company. Reliance Big Entertainment, part of the Reliance ADA Group of companies, would put up between $500 million and $600 million to back Mr. Spielberg and his team at DreamWorks as they leave Viacom Inc.'s Paramount Pictures later this year, according to people familiar with the situation.

Reliance Big Entertainment also announced last month that it would finance movies by production houses connected to Jim Carrey, Tom Hanks, Brad Pitt and others. It also said it plans to spend more than $1 billion in the next 18 months to expand its entertainment empire.

Others in Bollywood are doing likewise, albeit on a smaller scale. The current U.S. box office hit 'The Happening,' for instance, was co-produced by India's UTV Motion Pictures. It also co-produced two other movies with wide U.S. release: 'The Namesake,' directed by Mira Nair and 'I Think I Love my Wife,' starring Chris Rock. UTV Motion Pictures is part of Indian media conglomerate UTV Software Communications Ltd., in which Disney owns a 32% stake.

UTV says it has made money on each of its Hollywood films. It still sees its main business as Hindi films. But backing films in the U.S. has diversified its revenue and provided lessons on how to market movies that it is applying at home.

'Indians don't have to look to the West for heroes or pop culture,' said Siddharth Roy Kapur, chief executive officer of UTV Motion Pictures, in a recent interview. 'Still, we have been able to learn a lot about the way the studio model works in the West.'

Total revenue in India's film industry was $2.5 billion last year, less than one-tenth the total made by Hollywood films, according to PricewaterhouseCoopers. But film revenue in India has been growing at around 17% a year for the past three years while growth in the U.S. has been less than 3%. Emerging markets in general have outpaced the U.S. and most other developed markets: Annual movie revenue has climbed more than 6% in the Asian-Pacific region and Latin America in the same period.

Hollywood and Bollywood are slowly starting to share their stars, too. The queen of Indian cinema, Aishwarya Rai-Bachchan, has appeared in a few Western films. One Indian film company recently announced that Sylvester Stallone will make a cameo in its next movie. Bollywood also sees an increasing market for its song and dance numbers overseas that closer links with Hollywood could foster.

'I'm looking for new horizons,' Dev Anand, 84 years old, the actor, writer, director, studio owner and one of India's most-beloved stars said in a recent interview. 'I want to do a film in English for the international audience.'

The history of foreign companies seeking to hit the big time in Hollywood is long and the successes few. Reliance Big Entertainment may stand a better chance because it already has been expanding rapidly in the movie business both in India and the U.S. It controls multiplexes with more than 400 movie screens, 251 of them in the U.S. It plans to add 170 more screens in India in the next 10 months. Mr. Sawhney, the chief executive, says the company intends to do more than just open its wallet in Hollywood.

'We are not looking to be just a financial investor, our aspiration is to be a strategic partner,' he said. 'We want to create a brand new ecosystem and add value as the relative importance of emerging markets is changing the dynamics of the entertainment economy.'

Reliance also may be able to persuade Indians to watch more Hollywood movies by promoting them through its movie screen, television, cable, Internet and cellphone networks in India. 'Because it has so many properties, Reliance can leverage the content even on mobiles and the Internet,' said Vikas Mantri, an analyst at ICICI Securities in Mumbai.

WallStreet Journal
2008-06-19