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What: Frames India
When: March 26-28
Where: Renaissance Mumbai Hotel, Mumbai, India
Highlights: Ficci-BAF Awards; Italy as Country of Honor; keynotes from Giancarlo Giannini and Kareena Kapoor
Possibly the biggest revolution in the Indian entertainment industry is how it is becoming increasingly bankable.
Until six years ago, despite being a cultural icon and the biggest form of mass entertainment in the country, film was a pariah business — by government decree. For too long it had been associated with murky, often underground, coin. Only in late 2000, when the government gave industry status to the film biz, could reputable banks and financiers lend or invest.
Since then, private-sector cash has flowed into the industry, but only recently has it grown from a trickle to a torrent. Now the Indian biz is able to issue stock-market-traded securities, attract private equity and venture capital, and access more prosaic loans and insurance. (The first Hindi film to be insured was Subhash Ghai’s “Taal,” and United India Insurance was very publicly made to pay out when star Aishwarya Rai had an accident.)
How much of the cash-attracting turnaround is due to the change in official status is moot. Other factors are also at play.
As India’s economy has moved up to warp speed, it has swelled the leisured middle classes and allowed the public to leap several generations of technology. Rapidly changing entertainment environment now sees most lights turned to green.
Box office is once again on the rise, fueled by new multiplex construction, which in turn is adding convenience and raising ticket prices. Home entertainment biz, while still dominated by piracy, is being given a new lease on life by long-overdue reform of India’s retail sector.
With cable — and now satellite — TV competing for eyeballs and subscriptions, movies are being rediscovered as anchors of channel appeal. And country’s fast-growing mobile phone population also is accessing movie spinoffs (from wallpapers and ringtones to film music) on tens of millions of handhelds.
Film biz in particular has not found progress smooth. Early years of the new millennium saw budgets rise, but plenty of movies failed to connect with auds, and many small indie producers went bust. While Hindi and other language sectors remain fragmented, signs of growing consolidation are emerging, and output is changing.
With large corporations including Zee, Reliance, Modi and Hinduja spreading their activities from TV and telecoms into movies, regular corporate finance has also become more readily available. And as biz has earned its stripes, the funding effect has snowballed. The last 18 months alone have seen numerous examples:
- Bombay Stock Exchange has been busy with IPOs of multiplex builders, each with astonishingly ambitious plans. These include Pyramid Saimira, Inox Leisure, Adlabs, Priya Village Roadshow (PVR) and Cinemax India.
- Content owner and distrib Eros Intl., whose “Salaam-e-Ishq” did boffo biz at the B.O., chose London’s Alternative Investment Market for its flotation, where it raised $53 million. Since flotation, shares have doubled: Eros is now valued at $760 million.
- Nimbus became the first Indian company to attract coin from U.K. venture capital giant 3i. Financier has since returned for more, backing firm’s massive $600 million move into the sports rights and broadcasting businesses. Separately, 3i invested in UFO Moviez, which is seeking to ensure that India’s new generation of multiplex is equipped with digital cinema from the get-go.
Indian film biz has long been an impenetrable enigma for Western firms — Hollywood’s market share is around 5% — but it is increasingly attracting attention and coin of its foreign counterparts.
UTV has made itself the go-to firm for foreign co-productions, working with Fox (“The Namesake”) and, through Will Smith’s Overbrook, with Sony. After sale of its Hungama kids TV net to Disney last year, it also has close relations with the Mouse House.
This time last year Disney picked up its first-ever Indian animation, acquiring rights to “Hanuman” from Sahara One Entertainment.
Last month saw two votes of confidence in India as a future source of content for the world market. Technicolor Content Services took a strategic stake in Bangalore-based toon and games company Paprikaas. That was followed by Sony Pictures Imageworks’ acquisition of a majority stake in Chennai-based effects and animation studio FrameFlow. Unit, which has already done subcontract work on “Ghost Rider” and “Spider-Man 3,” will be renamed Imageworks India and rapidly expand first in vfx then into high-end animation.