First, the fact that foreign studios are finally investing in making Indian films in India. Second, the birth of a few small but solid Indian film companies, such as UTV, Adlabs, Yashraj and others. And third, the popularity of Indian cinema, not just in NRI markets but in others such as Poland or Israel too. |
For decades, India was a 'bottom of the chart' country for most of the big studios. It figured at the end of the sheet for box-office collections. It is still a laggard. One estimate puts the box-office share of Hollywood films at about 3-5 per cent of the total box-office takings in India. The reason is simple. Indians, irritatingly enough for the studios, love their entertainment in their lingo and context. So while typical Hollywood fare such as Titanic or Spiderman does decent business (in dubbed form), most of the others find favour either only in the metros or on the DVD circuit.
To this bit of history, add the three factors mentioned earlier. The 'corporatisation' of the Indian film business over the last five years has worked very well. The investment in retail infrastructure "" theatres and digital chains "" means that revenue leakages are getting plugged and realisations are improving. The average return on even the most mediocre films now hits about 30 per cent according to the trade. But if all these new-born companies have to scale up and justify their valuations, then cracking the global market is an imperative. 'Bollywood', 'Indian culture' and 'song and dance' has meant little in terms of revenues or giving Indian films a larger and more lucrative market to access. One estimate puts the total entertainment exports from India at $400-$500 million and growing at 20-odd per cent.
The anecdotal evidence of the potential and popularity of Indian films however, is overwhelming, heart-warming and weird, at times. At the IIFA in 2005, hundreds of Surinamese stood outside hotels in Amsterdam for hours to catch a glimpse of their favourite stars. The cabbies in Afghanistan want to know if you meet Amitabh Bachchan everyday. Shah Rukh Khan's bodyguards, while he was on tour in the US, were shocked to see that they were guarding someone who was more popular than Tom Cruise. There are, according to one report by Ernst & Young, at least 1.2 billion people of South Asian origin who are mad about Indian cinema, as it is. Add Indians and you have over 2 billion people who want to watch Indian films and are willing to pay for it.
But cracking global markets has taken even large auto or FMCG companies decades. So small-sized film companies have a long way to go before they can release a film with 4,000 prints in global markets, the way the studios do. The biggest hits in India release with 300-500 prints. (The number of prints has a direct correlation with marketing and distribution expenses). It is at this point that the Hollywood studios, which largely shy away from producing local content anywhere in the world, have found India attractive. Sony Pictures (part of Columbia Tristar) produced Sanwariya. Viacom has tied up with Television Eighteen. Twentieth Century Fox (a part of News Corporation) is making films in India. Even Disney, which has never made local content in any other market, is already sourcing it for its TV business. It also tied up with Yashraj Films last year, in a 50:50 joint venture to make animation films.
As the studios invest in Indian content in partnership with local companies, it is a matter of time before they take Indian films overseas. The business imperative to do so is evident. As production costs rise in India, it makes sense to tap into the larger market for Indian films, to get better returns. Across the board "" from foreign distribution companies to production houses "" the enthusiasm and appetite for Indian content is high. While Indian companies are fretting about how to crossover in the business sense, theatre chains and sales agents wish we can cut short our films.
As the global studios do business with the Indian ones, they will eventually find the answers to the logistical and creative challenges that Indian films face in their search for a global idiom. These answers could help ensure that the travails of the Indian women's hockey team gets the same poster space as Harry Potter's fight with Voldermort did.
