International investors are preparing to make an unprecedented onslaught on Bollywood this year, with several Hollywood studios and a group of London-listed funds looking to take a share of the world's most prolific movie-making market.
Studio groups such as Sony Pictures Entertainment, Viacom - which controls Paramount Pictures - and Disney are working on new releases and partnerships that will give them an entry into India's once closed and idiosyncratic movie industry.
"The fact is that the business in India is becoming more and more like the rest of the world," said Michael Lynton, chairman and chief executive of Sony Pictures Entertainment. "It looks much more like a business that we understand than perhaps it did 10 or 15 years ago and the trend is to become more like that rather than less like that."
The box office takings of India's Hindi-language Bollywood movie industry, based largely in Mumbai, and the country's regional language equivalents, focused mainly in the southern states, have been growing at an annual rate of 16 per cent, according to PwC. The industry generated revenue of Rs84.5bn ($2.1bn) in 2006 and is expected to be worth double that in the next three years, the professional services company said.
Dominated in the past by dynastic families of directors and actors, often with murky sources of funding, including, reputedly, India's underworld, the industry is moving towards a corporate model. Foreign movies until now have accounted for only a fraction of Indian box-office takings, leading many Hollywood studios to contemplate making local language offerings to increase their market share.
Sony fired the opening salvo, with the release in November of a Hindi-language song and dance film, Saarwariya.
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The film, the first Hollywood production of a Bollywood movie, received a tough reception from Indian critics, but made $20m in its initial weeks of release compared with a production cost of $8m, according to Sony. It has signed an agreement with one of the leading local film houses, Eros International, which is also listed on London's Alternative Investment Market, under which the pair plan to eventually make four to six Indian films a year.
Meanwhile, the Indian Film Company, a movie investment fund also listed on Aim and managed by a company controlled by Viacom and Indian television entrepreneur Raghav Bahl, is aiming to capture 20-25 per cent of the Bollywood market, with four large films in the pipeline.
Planned investments will be small by Hollywood standards - most big Bollywood films cost between $5m and $10m to make - but budgets are growing rapidly as competition for the major stars heats up.
