Bollywood
Can new money create a world-class film industry in India?
Rupali Mehta had always wanted to be a film producer, but last summer she found herself playing the drill sergeant. Every day, the diminutive producer of the soon-to-be-released Bollywood flick Mr. and Mrs. Iyer would haul herself out of bed at 5 a.m. Then she would cruise the hallways of the Gorumara Jungle Camp, a forest lodge deep in the Darjeeling Hills of north Bengal, knocking on doors to roust cast and crew members from their slumber. An hour later in the lodge’s dining room, she took roll call as bleary-eyed stars, starlets, grips, and gaffers sipped their morning tea. “It felt like boot camp,” says the 30-year-old executive producer at Triplecom Productions. “But if I hadn’t been so tough, we would never have finished the movie on time.”
On the set of a well-organized Hollywood production, such draconian measures might not have been necessary. But Mehta works in Bollywood, India’s chaotic film industry, where cost overruns and year-long delays are the norm. In the end, though, her toughness–learned in three years as a marketing exec for Sony Corp. (SNE ) in India–paid off. The 105-member crew kept to the 50-day production schedule and stayed inside the $1 million budget for the film, a love story set against a backdrop of communal violence. Even better, Mr. and Mrs. Iyer was named Best Asian Film at the Locarno Film Festival in Switzerland in August, and in October won the Best Feature Film award at the Hawaii International Film Festival.
Bollywood, as the trades would say, is boffo these days. Of course, half the planet–the poorer half–has long thrilled to the colorful conventions of Bollywood: Boy meets girl. Villain steals girl. Girl inexplicably kicks off a dreamy song-and-dance sequence with a chorus of hundreds instantly transported from an Indian village to the Swiss Alps. There’s usually a plot in there somewhere, but who cares? With stars like hunk-of-the-month Hrithik Roshan (liquid green eyes, super-muscled body, hydraulic dancing hips) and seductress Kareena Kapoor (flowing brown tresses, bee-stung lips, hydraulic dancing hips), these films have held audiences from Delhi to Durban in their thrall. The first movie to show in Kabul after the Taliban fled Afghanistan’s capital last year was a Bollywood epic.
That’s the enduring success of Bollywood, whose annual output of 1,000 films outstrips even the productivity of Hollywood. But now Bollywood is entering the consciousness of Western audiences and producers. Bollywood films–especially those more sophisticated and plot-driven than the usual fare–are taking the developed world by storm. Lagaan (“Land Tax”), a Bollywood blockbuster, was nominated for Best Foreign Film at this year’s Academy Awards. Mira Nair’s Monsoon Wedding, about a New Delhi marriage, earned over $30 million worldwide on an investment of just $1.5 million and is set to become a Broadway play in 2004. An Andrew Lloyd Weber musical called Bombay Dreams–with all the songs, sparkles, and soft-shoe that are Bollywood’s trademarks–is a hit in London’s West End and will soon open on Broadway. In January, production starts on Marigold, a musical comedy directed by former Disney creative exec Willard Carroll for Hyperion Pictures that represents the first full-fledged joint venture between Hollywood and Bollywood. “Bollywood has had half the world as its audience forever,” says Nair. “Western audiences have now woken up and joined the rest of the world.”
So Bollywood and its denizens can live happily ever after, adored by billions and embraced by Tinseltown. Well, not quite. Actually, Bollywood Takes the World is just Scene One. The question remains: Is Bollywood ready for its close-up? That’s a hard one to answer. For Bollywood, as a business, is a mess.
There’s plenty of potential, of course. The huge popularity of India’s film industry in emerging markets has fueled an annual growth rate of 15% for the past five years–three times that of India’s 5% gross domestic product growth. Despite the recent surge in popularity for Bollywood in the West, overall this year has been dismal: Only a handful of films have turned a profit. Yet in a good year, hits can deliver returns of 25% or more. Bollywood’s global annual revenues, estimated at $1.3 billion this year, are small change compared with Hollywood’s $51 billion. But theaters worldwide sold some 3.6 billion tickets to Bollywood films last year, compared with Hollywood’s 2.6 billion (table, page 46). And new distribution is helping boost profits: Bollywood films earned $108 million in overseas DVD, video, and satellite TV sales last year, up 25% from 2000.
Indian policymakers are finally recognizing the promise of Bollywood, which the government long relegated to second-class status. Two years ago, after decades of lobbying from the film community, New Delhi gave moviemaking the official status of an industry. In India’s oddly regulated economy, that designation gave producers access for the first time to legitimate bank loans, completion bonds, and insurance. In April, 2001, the Industrial Development Bank of India became the first bank to enter the film-financing business. It has lent $13.5 million to 14 Bollywood productions, and hasn’t taken any losses so far. “Bank financing has helped bring discipline into the industry,” says Viney Kumar, general manager of IDBI in Bombay.
But boy, a lot more discipline is needed. Sure, Hollywood has generated its moments of wretched excess–and produced its share of flops. But India’s problems put it in a class by itself. India has no large studios, and the industry is highly fragmented. Few in the business–writers, directors, or actors–ever see a written contract. Plagiarism is routine due to lax enforcement of intellectual property laws. The physical conditions can be primitive: An air-conditioned studio is considered a luxury. One producer tells how foreign crew members were horrified at the safety standards, with technicians wandering barefoot on floors crisscrossed with wires.
Schedules are routinely flouted. Stars agree to make up to a half-dozen films at a time and never tell producers if they’ll show up (not even Russell Crowe could get away with that). Star salaries typically consume 40% of a film’s budget, leaving relatively little for scripts, preproduction planning, or sophisticated post-production digitization. In Hollywood, by contrast, even the $30 million paid to Arnold Schwarzenegger for Terminator 3 was less than 20% of the film’s $170 million budget. And Bollywood scripts are written and changed on the fly, with actors getting their lines for each day’s scenes just moments before filming, leading to costly extra takes as they struggle to keep up.
The results can be comical. Devdas, a tale of star-crossed lovers, is one of this year’s hottest new releases. But it cost $10 million and took two years to complete–twice as expensive and twice as long as planned, making it Bollywood’s costliest movie ever. Why? A mysterious fire destroyed a $2.5 million set. Then there was the $31,000 green silk dress embroidered in gold that actress Madhuri Dixit wore for her role as the courtesan Chandramukhi. And it didn’t help that producer Bharat Shah was arrested on charges of funneling mob money to Bollywood. Shah denies the charges and in November traveled to London to promote Devdas after being released on bail. Because of the cost overruns, the film has made some money but has failed to deliver the megaprofits insiders had expected.
Such setbacks leave pioneering investors preaching patience to those who expect a quick return from backing Bollywood. After all, even though Bollywood blockbusters can generate investment returns of 100%, 90% of Bollywood movies lose money. The industry will need years to reach the efficiency and production values of Hollywood. “There’s too much housekeeping to do,” says Vishal Nevatia, chief executive of GW Capital. The $41 million private equity fund associated with former Conseco CEO Gary Wendt recently paid $5 million for a 27% stake in distributor Shringar Films.
One more threat: the encroachments of the outside world. Pirated copies of Bollywood flicks are readily available, both in India and abroad, costing the industry some $80 million a year. And even though Bollywood still commands the loyalty of millions, Indians are turning more often to Hollywood hits such as Spider-Man and tuning in to the fast-proliferating world of Hindi-language television soaps, game shows, and music channels. “Sensibilities are changing,” says Yash Chopra, Bollywood’s best-known producer-director. “Audiences are becoming more demanding.”
But Bollywood insiders, aided by policymakers and outside producers, are trying to professionalize. Some of the moves are very smart. New Delhi has announced a plan to waive a 100% “entertainment tax”–which effectively doubles ticket prices–for new multiplex cinemas in India. The policy shift has resulted in plans for 450 new multiplex screens over the next five years. The theaters will be the first modern cinemas in the country, and a vast improvement over the dilapidated auditoriums and halls that make up the bulk of India’s 12,000 movie houses. Cineplexes will encourage producers to make better movies, especially if they fill all those new screens with more Hollywood fare.
By Manjeet Kripalani in Bollywood, with Ron Grover in Hollywood