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November 25, 2007

Hollywood's growing fondness for Indian films

Business Today has an article on how Hollywood studios are now aggressively tapping into the regional language market in India.
Thus far, Hollywood studios have had only a peripheral presence in India, sticking to the traditional business of distributing their own—and sometimes, independently made films— in the country. Result: Hollywood’s share of the Indian film entertainment pie is a minuscule 3-4 per cent. But the big money lies in producing and distributing local films, and that is the path that some of the big boys of Hollywood are now taking.

...Hollywood first began testing the waters in the regional language market with dubbed versions of its English hits. The trend started with Jurassic Park in 1994. This was followed by Titanic in 1998. The success of these two films—the dubbed versions contributed as much as 25 to 40 per cent of their gross collections in India—highlighted the potential of the market. These were followed by Spiderman and Spiderman 2, Godzilla and Casino Royale, all of which reported multimillion dollar collections, thanks mainly to their dubbed versions. According to SPRI figures, 50 per cent to 60 per cent of its revenues in India come from dubbed versions of Hollywood movies. From there to local film production is, thus, a natural progression.

The obvious attraction is the size of the Indian market. The revenues of the Indian film industry, which were at Rs 5,990 crore in 2004, are expected to touch Rs 9,680 crore this year and grow further to Rs 17,500 crore by 2011, according to a projection by Pricewaterhouse-Coopers. Throw in television, home video rentals and film-related merchandising, and the pie is clearly too large for any serious player to ignore. Result: Sony, Viacom-Paramount, Time-Warner, Walt Disney, and Fox are sitting up and taking notice. Only Universal Studios has not yet announced any India plans.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.