Bollywood goes to Hollywood, seeking bargains: NY Times

NEW DELHI: Hollywood loves to show outside investors just how the movie business really works. But some of the people behind Bollywood in India believe they have something to teach Hollywood about making movies.

Reliance Entertainment, part of an Indian conglomerate controlled by the telecommunications and finance mogul Anil Ambani, is in talks to finance Steven Spielberg and David Geffen in a new venture. The company has also recently signed production deals with several Hollywood directors like Jay Roach and Chris Columbus and stars like Brad Pitt, George Clooney and Jim Carrey.

Unlike other foreign investors who have stepped toward Hollywood — and taken some grief for their efforts — Reliance has deep experience in the film business. Mr. Ambani is a relative newcomer to the movie game, but his wife, Tina Munim, is a former Bollywood star.

Reliance Entertainment’s chairman, Amit Khanna, a Bollywood director and producer, and the company president, Rajesh Sawhney, a former newspaper group executive, have laid out ambitious plans that include creating a $10 billion entertainment company that would be one of the world’s largest. They envision nothing short of remaking Hollywood.

After several good years, entertainment companies in India are finding that they have plenty of money but not enough places to spend it.

“Although the Indian film industry is having one of its best runs ever as far as cash inflow is concerned, the fact is that the top-bracket talent is booked up for the next couple of years,” said Hetal Adesara, a founder of Business of Cinema, a Mumbai-based Web company that provides Bollywood news.

Companies like Reliance are looking to Hollywood to expand their portfolios and “create a new genre of crossover cinema” with talent from India and abroad, Ms. Adesara said.

Whether the company can change the inward-focused culture of the American movie business is an open question. Directors that have worked in both Hollywood and Bollywood say that the Indian emphasis on autonomy and innovation could have a strong impact on Hollywood.

“I have complete and total creative freedom to do what I’m doing,” said Vidhu Vinod Chopra, director of “Eklavya,” an Indian entry in the best foreign-language film category at this year’s Academy Awards. Mr. Chopra recently signed a two-movie deal with Reliance Entertainment for close to $100 million. (Mr. Chopra’s wife, Anupama Chopra, writes occasionally about film and Bollywood for the Arts section of The New York Times.)

“Could you think of a studio in the United States that would give me $100 million and give me creative freedom?” he asked. “Even if they wanted to, I don’t think they could. I don’t think the system would permit them to do it.”

For one of the Reliance projects, “Broken Horses,” an English-language film set in New Mexico, Mr. Chopra has written the script and is directing, and may even pick out the poster, he said. “This kind of thing is a director’s heaven,” he said.

But the flip side is that the recipient of this type of hands-off funding is expected to be more aware of risk than one might be with Hollywood studio money. “I’ll be far more responsible than I would with five suits telling me what to do,” he said.

Reliance Entertainment executives have promised to cut through the “bureaucracy” of Hollywood — in some ways a remarkable goal, coming from a country known for the bureaucracy of its government.

The fast-growing entertainment and media industries in India and other developing countries are attracting capital and building audiences in ways their Western counterparts have not. Revenue from India’s movie industry hit $2.2 billion in 2007, according to PricewaterhouseCoopers, less than a 10th that of Hollywood. But Bollywood is expected to double in size by 2012, thanks to 13 percent annual growth, versus less than 3 percent in Hollywood.

“There are a lot of lessons emerging markets can teach the rest of the world,” said Rajesh Jain, head of media and entertainment for KPMG in India. Among his suggestions are how to use new platforms and how to lower costs.

Indian entertainment companies have embraced new channels of film distribution, like the Internet, more rapidly than their Western rivals. That’s in part because of the Indian diaspora — some 25 million people of Indian origin who live outside of India, many of whom are eager to see Bollywood films but cannot find them in the local theater.

Rajshri Group, owner of one of India’s oldest production houses, was the first to tap into those millions, with the premiere of its film “Vivah” in November 2006. Rajshri made a download of the film available at the same time it premiered in theaters in India. Thousands downloaded the film, each paying $9.99.

Rajshri now offers an online library of hundreds of Bollywood movies and Hindi songs through its own Web site, and other production companies have followed suit, although downloads bring in a tiny fraction of what big Bollywood films earn at the box office.

Still, at their roots, Hollywood and Bollywood are starkly different industries, starting with the economics. A Bollywood film costs a fraction of one from Hollywood: a small budget in India might be $200,000 to $1 million, and a big budget is $4 million or more. The largest-budget Bollywood films have barely touched the $20 million mark. As much as half of the production cost can go to fees for actors and directors.

So far, getting mainstream Hollywood stars into major roles in Bollywood movies has proved difficult. Sylvester Stallone agreed this month to appear in “Kambakkht Ishq,” a move seen in the Indian film industry as a big breakthrough. But Mr. Stallone will be making a brief appearance in the movie, playing himself, not acting in a major role. Denise Richards is being wooed for a small role in the film as well, according to Indian news reports.

The financing of Bollywood films has historically been a less-than-transparent business, with cash flowing in from organized crime and black markets. In recent years, though, public corporations have been drawn to the industry because of its rapid growth, and banks in India and beyond have been making loans.

“The industry is still in the process of going straight” as far as financing is concerned, Ms. Adesara said. She estimates that 50 to 60 percent of the money being pumped into the industry now is “legitimate,” adding that “it is going to take another couple of years for the industry to get fully transparent.”

Courtesy: The New York Times

(Published with special permission from The New York Times)