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Headline: An entertainment powerhouse Source: Euromoney Date: September 2000 more on south Asia more from Euromoney September 2000 Driving through the imposing gates of Film City on the outskirts of Hyderabad is like stepping into another world. The sprawling 2,000 acre expanse boasts Japanese and Moghul gardens, Hindu temples, a fort, a railway station, an airport, little towns and villages. A closer look reveals the buildings are a facade made of plaster of Paris and the blooming gardens are the backdrop for the popular song sequences in Indian movies. Built by Ramoji Rao, a leading south Indian movie and television tycoon, Film City offers outdoor locales, 40 studio floors, a movie prop workshop, extras and technicians, sophisticated editing and sound-recording facilities and even an earth station that beams television programmes directly to satellites. Film City pitches India as a low-cost producer for the global movie and television industry. And it has already attracted a few American producers away from Hollywood. “Entertainment is perhaps the only business in which India is a global player in terms of volumes,” says Amit Khanna, head of Reliance Entertainment. Over 700 movies are made in India each year, making it the biggest movie-making country in the world. Over 40,000 hours of TV programming and 5,000 music titles are produced each year. Keeping a billion people entertained is a serious business. Yet the Indian entertainment industry is billed at just around $3.5 billion, or just around 1% of the global industry. According to recent study conducted by FICCI, an industry body, and Arthur Anderson, a consultancy, over 14 million Indians flock to 13,000 movie theatres every day but there are hardly any multiplexes. India has just 12.9 theatres for every million people compared with 116.6 in the US. The liberalization of the 1990s brought two big opportunities for this industry: the proliferation of the private satellite television channels and the opening up of the global market for Indian movies and television software. There are over 60 private television channels in India today: 60 million homes have a television of which 28 million subscribe to cable television. Entertainment gets the top rating among Indian audiences, particularly Hindi movies and music. Says Amit Khanna, “Television has enlarged the audience for cinema and made it a regenerative asset whose value rises with time.” Foreign channels such as Sony and Star TV are buying up movie rights from Indian producers for large sums. Star TV India chief, Peter Mukerjea, says that his company plans to launch a Hindi movie channel soon and has bought the rights of around 400 to 500 Indian movies. Music channels such as MTV in India air Hindi film music. The global market for Indian movies, music and TV software is growing. Indian television, movie and animation software exports fetched Rs10.15 billion last year. Revenues from movie exports grew by 80% in the last two years. Overseas rights of an Indian movie alone can cover the cost of making it. Young movie directors such as Karan Adarsh tailor their work to appeal to the South Asian diaspora, a captive market for Bollywood, the Hindi movie industry based in Mumbai. New markets such as Japan and Malaysia have opened up. This is spurring an unorganized and undisciplined movie industry to corporatize. Subhash Ghai, one of Bollywood’s biggest director-producers, believes that “sticking to time, budget and quality” pays. Top movie stars work for him even though he pays them a lower fee because they are sure the movie will get made in time, he says. Mukta Arts, promoted by Ghai, made a first-ever public offering of shares by a big Bollywood house in July to help build a Hollywood-style studio that will hire directors, writers and technicians. Indian television production companies such as Television 18 and New Delhi Television have struck deals with foreign channels such as CNBC and Star TV to provide programming. New entertainment companies are doing brisk business. UTV Toons, sells 2-D animation films to Fox Kids/Saban and Canada’s Funbag. Their English-speaking artists, says a company executive, understand the humour and cultural nuances of cartoon stories, giving the company an edge over other Asian suppliers of animation software in South Korea and the Philippines. Mumbai-based Crest Communications produces Tamil programming for a television channel in Singapore. It bought Los Angeles-based Rich Animation Studio in July and is producing a 3-D animation movie for the international market. The big Hollywood studios are getting into the distribution of Indian films. Sony Pictures distributed its first Hindi movie last year. Twentieth Century Fox is distributing a small budget movie named Dollar Dreams. The stock market is bullish. Says S Srinivasan, an investment banker at Kotak Mahindra Capital, which is advising NDTV and UTV’s on coming to the market, “After IT stocks, investors are keen on Indian entertainment and media companies but they will be selective.” A few IPOs have been held back because of a choppy market and a slide in the share price of Zee Telefilms, the biggest media and entertainment company listed on the market. Some years back an entertainment company promoted by Bollywood’s biggest star, Amitabh Bachchan, went bankrupt. Private investors put money into the company. Mr Bachchan now hosts a popular television show named Kaun Banega Crorepati (Who wants to be a millionaire?). Those investors might well ask: who indeed? Related Articles Much noise but little movement Half-hearted privatization Selling voters on reform Finance minister and crisis manager more on south Asia more from Euromoney September 2000 |
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