Bollywood and Hollywood Are Teaming Up for Growth

The gap between Bollywood and Hollywood is becoming increasingly narrow. Earlier this week I blogged about how Steven Spielberg is in talks with Indian Media Giant Reliance ADA group to finance an independent studio. That's just the tip of the iceberg when it comes to crossover between Hollywood and its sister city many continents away.

American Media Giants is investing in India -- seeing potential in the largest youth market in the world. Disney (DIS), Viacom (VIA), and Time Warner (TWX) are taking different approaches to expand their Indian footprint. Disney is building a business of local films, while News Corp. (NWS) recently launched MySpace in India.

You can see some of this crossover at the movie theater. The actress considered the "queen of Indian film," Aishwarya Rai, has appeared in a handful of western films, and has a number of more prominent roles coming up, including in Pink Panther 2. And Sylvester Stallone is making a cameo in an upcoming Indian film.

The technology driving filmmaking is where Bollywood and Hollywood are already working close together -- investing in each other, and creating a new high tech global infrastructure. If you saw Warner Bros.'s Oscar-winning Golden Compass last year, you saw the handiwork of India's high tech capabilities. All of its special effects were produced in Mumbai, studios taking advantage of the lower costs overseas.

It goes both ways: India's largest visual effects house -- Prime Focus Group, which is traded on the Bombay exchange -- recently bought Post Logic, a Hollywood-based post-production house and special effects company Pioneer Films.

And then there are the American companies promoting from the growth on both sides. Autodesk (ADSK), the US graphics software company, has been selling internationally for years. Now, the growth of Indian entertainment businesses -- both internally and the jobs outsourced from the U.S. -- benefit Autodesk's revenues.

Hollywood may be sexy, but it's not a fast-growing business-- according to PWC revenue from the U.S. movie business is up just three percent a year over the past three years. In contrast, India's film revenue is up 17 percent every year for the past three. Of course the total size of India's film business is just $2.5 billion, less than a tenth from Hollywood's films, but when it comes to growth Bollywood's winning the Oscar.

Comments

[George R]

Hi Julia,

I love Indian "food".

I also read your articles regularly. I like your "style".

While I appreciate your optimism regarding India (and perhaps the other three components of the economically explosive BRICS ... that's Brazil, Russia, India, and China ... as well), I think any article on this subject that does not mention Intellectual Property rights and concerns falls short on the big picture ... both the opportunties and the problems.

Creative industries cannot thrive in economies where 8 out of 10 (or, realistically, even more!) copyrighted works are pirated rather than used under a reasonable licensing fee arrangement.

Piracy in the BRICS is actually growing in gross numbers, in spite of what these governments claim. It is simply a fact of life that the youth in these countries are NOT taught to respect intellectual property rights at any level of their education.

These hypocritcal worldwide standards have influenced the youth in this country as well. By and large, we are taught not to steal ... unless, of course that stealing pertains to movies, songs, digtial artwork, and photographs downloaded from the Internet.

But, at least we do hold people accountable if, and when, we catch them.

So, by and large, we in this country will respect the Indian Bollywood copyrights while India distibutes our Hollywood works under virtually no government sponsored sense of business integrity or legality.

Why do you think this country has gotten itself into this economic mess, Julia? We are weak-kneeed on the protection of American copyrights, and quick to look for the PR or business opportunties of producing a movie with cheap labor or making a cameo appearance every now and then.

"Food" for thought.

Keep up the dialogue.

George

George P. Riddick, III
Chairman/CEO
Imageline, Inc.

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