Hollywood and India Partner Up (VARIETY)

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Hollywood and India partner up
Studios work locally to create original content
By PATRICK FRATERLooking at the pages of a newspaper in Mumbai, a foreign visitor will not be starved of gossip about Hollywood celebrities or news of upcoming releases. Copious entertainment sections may often run to a page of Hollywood coverage. But such appearances in English-language papers are deceptive and should not be taken as indicators that Indian auds are ready to give up on their Hindi, Tamil or Telegu favorites.
And Hollywood studios and their corporate parents are no longer stressing about expansion of the niche that exists for Western films. These days their mantra is about becoming part of the mainstream Indian entertainment biz.

“Many of these companies have been looking at India for quite a while. But there is only so far you can go with Hollywood content. Indian audiences want local,” says Siddharth Kapur, director of UTV Motion Pictures, a company that has worked with Fox Searchlight, Disney and Will Smith’s Overbrook Entertainment on various film productions.

That understanding arrived over time. Time Warner subsid Turner Channels has been distributing channels such as Cartoon Network and HBO in India for more than a decade and is still stepping up its involvement. “We made mistakes. We entered the market in 1995 with American content and the attitude ‘it worked in the U.S. after all,’” says Sunny Saha, senior VP and g.m. of Turner Entertainment Networks Asia.

“But we learned about localization and that localization means more than dubbing, and more too than (acquiring) local programs. It also means getting into original content. That’s what we did in 2004 with (live-action kids net) Pogo and the original production unit.” The outfit produced 150 hours in 2007.

Over the same period, Turner has established partnerships with Zee to create Zee-Turner distribution business and with TV-18 to create CNN-IBN. In December it inked a deal with local producers Alva Brothers to launch more local channels, including one in the hotly competitive general entertainment space.

“We’ve taken India very seriously for three years now. Others are doing the same. It takes people awhile to become more aware of the opportunity, then of how to address it,” says Marcel Fenez, who heads the entertainment practice for PricewaterhouseCoopers and produces the most widely quoted statistics on the Indian media scene. “The level of diligence is going up.”

Fenez says that the strengths of the Indian industry are a real market, an inherent skills base and significant uptake of new media such as mobile, which present long-term opportunities. (The theatrical market has revenues of $1.3 billion, and the TV sector is currently worth about $2 billion.) Downside, especially in the film sector, has been a lack of transparency and the preponderance of small independents.

“Indian TV is one of the most interesting globally,” Fenez says, pointing to the mushrooming of new channels, the arrival of digital cable and the multiplication of DTH satellite platforms expected in the current year. Though he also says “everything is predicated on strong advertising growth,” Indian ad spend, at 0.34% of GDP, has a long way to go before it reaches the levels in the West. (It is 1.7% in the U.S. and 2.7% in Hong Kong.)

But Fenez expects India to deliver. “India is in a period of stability, which means that growth should be there.” It may even benefit from turmoil elsewhere. “Recession issues have not yet hit India. Growth capital will find its home.” Capital from Hollywood has certainly flowed in since the last Ficci confab.

“We have taken a two-pronged approach, through our corporate interest in UTV, and through a development approach that is different to other studios,” says Jason Reed, executive VP, Walt Disney Studios Motion Picture Production. “We want to see Disney-branded entertainment in Hindi, Tamil and other languages, made with Indian talent, Indian choreographers, etc., and made at Indian budget levels.”

Disney now has a full team in Mumbai split between corporate and film development units, and the company notably pacted with Yash Raj Films in a move intended to move both companies into the Indian animation sector for the first time. First is expected to be “Roadside Romeo,” a 3-D picture with animation handled by Tata Elxsi.

While animation thrust is an exclusive partnership with Yash Raj, Disney is also looking at other project-by-project partnerships for a live-action slate. “We want to make Indian movies that work within our branding, a slate that completely reflects our slate of movies from Hollywood, from ‘Hannah Montana’ to ‘National Treasure’ or ‘Pirates of the Caribbean.’”

While most Western conglom coin has flowed to the TV side, Disney is not alone among Hollywood players in testing the appetite for local movies, where B.O. is growing at a pace close to 30%. Warner announced its first local Indian production, a comedy called “Made in China,” and Sony gave a wide release to its first Bollywood production, “Saawariya,” by Sanjay Leela Bhansali.

Disney’s Reed uses the Yash Raj partnership as example of how difficult it is to keep up with the current pace of development. “We’ve been in with Yash Raj eight or nine months and redone our (business) modeling twice already. That’s because the economy can change so substantially in the time between greenlight and releasing.”