Bollywood Seduces the West

Bollywood: a seductive target for western investment?The glossy, glamorous and prolific movie industry of India - biggest in the world outside of Hollywood - is after European and American mass audiences. - and not just audiences. Bollywood is also beginning to seek out western investment..

Laagan - the first Bollywood movie to be Oscar nominated, in 2001Bollywood movies, known mainly for their chaste love scenes, exuberant songs and convoluted plots, are growing ever more popular in Britain. They have been screened here for over 25 years, when Asian families took their children to see Hindi cinema, not always willingly from the kids' perspective. According to Avtar Panesar, UK head of Yash Raj Films. 'I suppose it was a way to keep them in touch with Indian culture. But now the kids are the ones bringing their parents.'


City money men have taken notice. Yash Raj Films produced the 2005 big hit Salaam Namaste, has beefed up its international distribution. The company now earns nearly half its revenues from cinema takings and DVD sales in foreign markets, mainly Britain and the US. Arch-rival Eros International, the world's biggest distributor of Hindi films could, by later this year, be floating on the London Stock Exchange.

Eros and its corporate adviser Evolution Securities, its corporate adviser are remaining tight-lipped on the float rumours and like other privately held Indian companies, Eros discloses only limited financial information. Industry estimates of its annual turnover range from £20m to £70m. The real figure is likely to be at the upper end of that scale if, reports are right and Eros is aiming for a listing valuing it at £200m.


Despite producing twice as many films as Hollywood each year, Bollywood's earnings are not impressive by western standards. Industry revenues were just $1.25bn in 2004, according to an estimate by Price waterhouse Coopers, earnings that would not cover takings for one Harry Potter film. But that;s not the end of the story. PwC believes Bollywood will double its turnover by 2009, so investors could be willing to bet on a rosy future.

Money express - India's economy is booming as the busy Mumbai - Pune highway evidencesIndia's economy is booming. Bollywood films command the absolute devotion of millions of middle-class consumers whose taste for the good life is reflected in the industry's increasingly glossy movies. Ticket prices are rising, cinema halls are being upgraded in India's major cities and film-makers are charging big 'product placement' fees. The industry could soon be earning serious hard currency at home, as well as abroad.


The film industry was long seen as low-brow by India's government, and there are still stories circulating of Bollywood having connections to the criminal world,but success has brought greater recognition. Indian filmmakers were finally accorded official 'industry status' in 2001, the same year that Lagaan, the cricket-and-colonialism drama, was nominated for an Oscar. Shekhar Kapur, the director who made Elizabeth, has prospered abroad. Hindi film's foremost composer, AR Rahman, was one of the creators of Bombay Dreams, the hit West End musical and India's leading film heroine, Aishwarya Rai, is tipped to make it big in America.


Everyone is looking for a 'crossover' - a Hindi film that can capture mass audiences in the US and Europe, but big cultural and financial barriers make that a tough call. According to Rachel Dwyer, a film studies academic at London's School of Oriental and African Studies.

'The key is the marketing and selection of the right film to promote, as the marketing costs for a Hollywood film probably equal the budget of an Indian top-budget film. And a film which is a hit in India may not work in the western market.'


Tapping into the 'non-resident Indian' so-called 'roots' market has brought more concrete results. A total of 74 films from India were screened in British cinemas last year, grossing £12.4m, according to Nielsen EDI, which records box office receipts.

A decade after Yash Raj's Dilwale Dulhaniya Le Jayenge - starring Shahrukh Khan as a British Asian - first gave Bollywood its younger following in this country, the UK's top 20 films nearly always include at least one Bollywood offering.

Intellectual property theft, especially pirated DVDs, are another cloud on the horizon. Panesar estimates piracy accounts for 60 per cent of all Bollywood DVDs in circulation. 'I want to shout this from the rooftops: the pirates control our DVD business,' he complains.


The problem doesn't go away, sespite raids, convictions and jail sentences. Panesar sees further trouble arising from internet as broadband spread, but that may not put smaller investors off, because bigger players are already in the market - Sony Pictures is currently co-producing its first Hindi film, Disney is expected to follow suit and the rumoured Eros floatation would add more foreign involvement.

But does Bollywood need an inrush of investment? Panesar believes Yash Raj has no intention of floating and also feels it is not what Bollywood wants. 'You can't make movies to please shareholders. They would want us to produce 10 films a year, good or bad. You've got to make movies that come from the heart.'

Not all Indian producers would agree with that,including Rahul Puri, vice-president of Mukta Arts in Mumbai, a smaller film company which has long had an Indian stock exchange listing. Puri says, 'Foreign investment would bring global talent, best practice and distribution opportunities,' he says. 'It would only be a good thing for the industry here.'