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Sony’s Saawariya hasn’t quite set the box office registers clanging. Will that deter Hollywood majors from producing more Bollywood films? No, says Manjula Sen
Mere paas gaadi hai, bangla hai, bank balance hai. Tumhare paas kya hai,” growled Amitabh Bachchan’s Vijay. “Mere paas Ma hai,” retorted Shashi Kapoor’s Ravi righteously in the 1975 cult film Deewar.

Producer-actor Shah Rukh Khan may also have chortled that he had Ma, or mother-to-be director Farah Khan, who delivered a blockbuster with Om Shanti Om. OSO was released along with Sanjay Leela Bhansali’s Sony show-off Saawariya last month, but the latter’s Hollywood production was not a paisa vasool patch on Khan’s equivalent of “Ma.”

Will that deter Hollywood majors from stepping in to produce more Bollywood films? Should Warner Bros., which is co-producing Ramesh Sippy’s Made in China toplining Akshay Kumar and Deepika Padukone, be worried? Is the Indian film industry — worth $1.8 billion in 2006 — about to bid goodbye to globalisation?

No, stress industry insiders. India, according to one report, will be the fastest growing market in the world in media and entertainment over the next five years. So Hollywood is here to stay — as is its tie-up with Bhansali.

Someone sounding suspiciously like Bhansali himself answers his cell phone and politely, if wearily, says the director is out of town. Speak to Sony, the voice intones. Sony’s Mumbai office lays out the statistics. The film opened to $12.5 million in the first week and had made over $19 million at the box office worldwide. London’s The Financial Times is not convinced. Saying that the film was made at a cost of $8 million, it declares that Sony has flopped in Bollywood.

But Deborah Schindler, the president of International Motion Picture Production, a division of Sony Pictures Entertainment, remains unfazed. “We are very proud of the film and the way it was executed,” she says, speaking from Los Angeles. “We look forward to making many more movies here and many more movies with Sanjay Leela Bhansali.”

The company has already entered into a mini joint venture with Eros International, the leading distributing company for Indian films overseas, to produce six films in 2008 and 2009.

The mandate of her division in India, says Schindler, is to be a part of the “vibrant” Indian film market. “We are not a Hollywood studio in India. We are here to make Indian movies in India. My mandate is to make local content in different parts of the world in a respectful integrated way.” Emphasising that Saawariya was not a co-production, she points out, “We financed the entire movie and we are here to stay.”

A.T. Kearney consultancy group partner Saurine Doshi believes that the issue at stake is not monetary loss. “For an international studio such as Sony, this has been a fantastic learning experience of the local industry at a fraction of the cost.” To Sony $8 million would certainly be loose change. In a recent report, The New Economics of Indian Film Industry: Creativity and Transformation, A.T. Kearney-CII affirms that India, with the fastest growing media market, will have a film industry worth $4.4 – 5.1 billion by 2011.

“If the traditional definition of a hit is to recover costs and make money, Saawariya will do that. But today’s reality of Bollywood films is that increasingly, the box office is less important and matters only in the first week. A film is sold to different sources and costs are recovered quickly,” explains Doshi. “The film is an average earner for Sony. Today, a film is a hit when it is both popular and makes money. In the sense that it failed to capture the hearts of people, Saawariya is a flop.

According to the Kearney report, in the next six or seven years Bollywood will change from being a small unorganised industry to a large modernised one. Production houses will find alliances and become larger. Hollywood was earlier tying up to market and distribute films. “Now they are producing films. Corporatisation through professional management teams is already gaining ground here. Now we will see the emergence of big entities,” says Doshi. Currently, the largest production house — Yash Raj Films, which is making Roadside Romeo, an animation film with Disney — produces 5-6 films a year at average budgets of Rs 3-7 crore with one blockbuster of Rs 20 crore.

“In the next few years there will be five or six entities making 15-20 films a year with average budgets of Rs 20 crore,” predicts Doshi.

If an ambitious production house is not among the top five entities, it risks being marginalised. Although small film companies will co-exist, the Kearney report says large entities will emerge. One of these is likely to be Reliance Entertainment. With cavernous pockets it is no surprise that its chairman, Amit Khanna, brushes off the significance of Hollywood producers for Bollywood. “It does not make a damn difference. They are welcome here but what one must understand is that there is no dearth of money in Hindi films any more.”

It is a thought that is echoed by film and television major UTV’s marketing vice president Siddharth Roy Kapur. So far, UTV, which produced Lagaan and is now producing the Hrithik-Aishwarya film Jodha Akbar, has gone the other way. It has co-produced films such as The Namesake with Fox Searchlight and is co-producing M. Night Shyamalan’s The Happening with 20th Century Fox. It also has a co-production agreement with actor-producer Will Smith’s company, Overbrook Entertainment.

“Hollywood’s releases in India, including its dubbed versions, account for less than five per cent of the industry’s revenues. It wants a bigger share. But the film industry here is thriving. There is plenty of finance available from banks and institutions now. If there has to be a tie up, companies like us will look for strategic interests, rather than money. What can they bring to the table,” asks Kapur.

“They” can bring a longer distribution arm, merchandising and international visibility. And UTV is not averse to such tie-ups. “We are always in talks,” says Kapur.

Large Indian companies will continue with an international presence in their corporate make up, says Khanna. One example: American media conglomerate Viacom’s tie up with TV18.

Doshi says that while many Indian companies will continue to go it alone, there will be potentially some producers “who are smart enough to understand where the industry is heading and create the right kind of alliances and joint ventures.” He says the factors necessary for such Hollywood stakeholders in Bollywood to succeed include a good understanding of the Indian consumer, the wherewithal to develop scale in capacity and professional process and an understanding of the movie process of script-to-screen. “Neither can do it alone so they will come together,” he says with conviction.

In the movie business, globally, big entertainment companies would be comfortable with an annual return of 10-15 per cent on sales. At the very least, India as a $1 billion movie business can support the potential of a $150-million market. “If appropriately mined, global demand for Indian content could blow the figure out of the water,” contends Doshi.

While Warner Bros. maintains a coy “no comments” position on its coming Bollywood film, it’s just a matter of time before more Hollywood studios — such as Universal, Disney and Fox — really make their presence felt in India. Doing the maths, Doshi says spin-offs such as satellite and television rights will push the foreseeable $5 billion market up to $20 billion.

Next time around, the face-off between Hollywood and Bollywood may become irrelevant. And you can look out for Hollywood-Bollywood in Brangelina mode — as an irresistible global brand.