Bollywood Business

Wednesday April 27, 01:28 PM

Bollywood's attempt to escape murky past falters after flops
Photo : AFP
BOMBAY (AFP) - Bollywood -- the world's largest movie-making centre -- has long been burdened by associations with Bombay's underworld, deriving much of its funding from gangsters' so-called "black money".

Just five years ago the Hindi cinema industry's credibility was at an all-time low as the "mob" brought kidnapping, murder and extortion along with its much-needed funding.

But in 2001 a sudden influx of "clean" cash from India's major industrial groups hoping to make quick bucks by dabbling in the glitzy and glamorous world of film heralded a new dawn for the industry.

Top conglomerates run by India's wealthiest families -- such as the Tatas, the Birlas, the Singhanias and liquor baron Vijay Mallya -- plunged into film financing when the Indian government declared Bollywood a bona fide industry.

A series of flops and millions of lost dollars later, however, and the more respectable investors are running scared, leaving Bollywood's hopes of putting its murky past behind in tatters.

Many of the new financiers have been left with burnt fingers after backing flicks with weak scripts, and are rethinking their strategies. Tata, meanwhile, has pulled out of the business altogether.

"They are licking their wounds and reviewing what went wrong," says film analyst Indu Mirani.

"These companies were worse than some of those truck transporters who put their surplus money into films," she says, referring to a trend in the late 1990s when anyone with spare cash would put it into a Bollywood movie in the hope of quick returns and that the industry's glamour would rub off on them.

The main problem says Mirani, is that the big companies had no experience of film and chose weak scripts, which even big stars such as Bollywood legend Amitabh Bachchan and leading actors Sanjay Dutt, Hrithik Roshan, Bipasha Basu and Rani Mukherjee could not rescue.

"It appears that even these sophisticated businessmen got enamoured by the glamour and forgot that finally it is the script that has to be good and not just the stars for a film to be a hit," Mirani tells AFP.

In the past few years, the Tatas produced suspense drama "Aetbaar" (Trust), the Pantaloon group made romantic flick "Na Tum Jaano Na Hum" (Neither You Know, Neither Do I), the Birlas made "Dev" and "Black" -- a story of a deaf, dumb and blind girl -- while the Singhanias made love story "Woh Tera Naam Tha" (That Was Your Name) and Mallya produced action-cum-suspense drama "Rakht" (Blood).

"All these movies failed to connect with the Indian audiences who are very fickle," says Mirani.

Trade figures reveal that "Aetbaar" earned about two-thirds of its 150 million rupee (3.4 million dollar) production costs while "Woh Tera Naam Tha" earned just 40 million rupees against an investment of 120 million rupees.

While "Dev" lost half of its around 60 million rupees budget, "Black", according to Applause Entertainment -- the filmmaking arm of the Birla group -- managed to come out ahead, making 30 million rupees profit.

None of the top 10 Bollywood films of 2004, according to a list by global research house PricewaterhouseCoopers, was produced by companies. They were made by long-time filmmakers putting their own money in scripts that clicked with the audience.

"The movie business is a quick-sand business and is driven by passion," says Anshuman Swami, chief executive of Birla-owned Applause Entertainment.

"We have made money from 'Black' and intend to fund films in the future. We will continue to make movies, but know that the game is slow and steady."

The Tatas, however, decided enough was enough after "Aetbaar" bombed and sold off its media division, Tata Infomedia -- which included film division Cutting Edge, to ICICI Ventures.

The new owners, who have renamed the company Infomedia India, shut down Cutting Edge as they felt it was not feasible to produce films.

"We didn't see any competitive advantage in the film business," says Prakash Iyer, managing director of Infomedia India Limited. "We felt it made better sense to see other business opportunities."

Officials from the Singhanias and Mallya group were not available for comment.

Bollywood, India's prolific Hindu-language film industry that churns out about 250 features a year, accepts part of the blame, saying a lack of professionalism has left companies disillusioned.

"I think the only reason companies are not coming is the indiscipline in the film industry," actress Urmila Matondkar tells AFP.

"I remember when I was a newcomer I used to land up on sets early, or on time, and everyone used to make fun of it, saying I was punctual because I was new."

Aside from big companies, the turn of the millennium has brought into Bollywood other sources of financing, including loans from the Industrial Development Bank of India, the raising of equity on the stock market and private equity deals in which individuals enter into contracts for financing a movie with returns payable on profits made.

Other "non-traditional sources" of funding, says Sunir Kheterpal of India's Yes Bank, who has just released a detailed report on the financing of Indian film, include funds from music companies and television channels.

"In addition to entry of new money into the Hindi film industry, this trend will enable higher transparency in operations," says Kheterpal.

Before 2000, some 40 to 50 percent of movies made were funded by the underworld, with gangsters in Bombay conducting a reign of terror and extortion against producers, directors and even actors, according to various industry estimates.

But the stranglehold of the "mob" loosened when police launched a massive crackdown, arresting some kingpins in Bombay as well as in Dubai.

"In a situation like this when the industry was losing its credibility, companies came in with funds and everyone thought it was the best thing to happen to Bollywood," says analyst Mirani.

But she adds, they came in overly cautious.

"They gave money only to big banners and projects with big actors. Newcomers who had brilliant scripts were left stranded for want of money as companies were not keen to take the business risk," she says.

"People with brilliant scripts did not get access to money or to stars."

Experts feel the way out for Bollywood is for the industry itself to corporatise rather than depend on big companies to front up with funds.

They say traditional filmmakers should float professional business entities and fund films that will tell a good story.

"Corporatisation of the industry has to happen and in fact it is slowly happening," producer-director Subhash Ghai tells AFP.

"For the healthy growth of Bollywood, the future has to be a blend of corporate culture and film mind," adds analyst Mirani.