Going global by selling local

By Probir Roy | 15 Apr 2003


India has the potential to become an entertainment BPO hub, with many movie moguls smelling success in local locales and markets

Mumbai: While a typical release window for a filmed entertainment product in the US sees just 25 per cent (maybe a little more) of its revenues accruing from theatrical releases within six months, the equivalent cycle for an Indian film is 70 per cent (maybe a little more) within the first three months of the release.

This paradigm will progressively (or incrementally) change more in line with the US model, with certain improvisations, since the process and products become global in practice and nature. Nonetheless, this transition is not expected to happen automatically overnight or without interest groups skirmishing for respective pole positions.

What will certainly help in any filmed entertainment project is a clear roadmap from a ‘platform release’ of a film to leveraging and milking the ‘future media’ and ‘derivatives.’ The three ‘enablers’ for such a change in mindset to take place are:

  • International marketing, advertising and distribution (MAD)
  • Organised financing and Funding (OFF)
  • Co-production (CoP)

It is perhaps a little-known fact that the Japan-based Sony Corporation, through its Hong Kong-based subsidiary Columbia Pictures Film Production Asia, has made the biggest investments in Asian film production — the films produced include Crouching Tiger, Hidden Dragon by Ang Lee, So Close by Corey Yuen, Big Shot’s Funeral by Feng Xiaogang and Not One Less and The Road Home by Zhang Yimou.

Alternatively, more than 50 per cent of Hollywood’s revenues today come from overseas, and Japan is Hollywood’s largest export market. In 2002, the highest-grossing films in Japan, Taiwan and Hong Kong were local ones, with regional and overseas markets thus assuming dominant proportions for both Western and local fare.

Catering to local tastes
US studios are finding ways to make profits by capitalising on the desire of ‘local people to see local fare.’ The big studios have created special overseas divisions and have entered into partnerships for production and distribution of local films. Warner Bros recently picked up a Filipino film for local distribution, Disney released the award winning animated film Spirited Away, and Miramax regularly distributes Asian art-house and commercial movies in theatres and on home video.

This is albeit a beginning of the integration of the Asian film industry and Hollywood producing a different kind of global cinema — films that contain material and stylistic elements from industries on both sides. Miramax producing Hero, China’s official submission for this year’s foreign language Academy Award, is but one example of this global cinema.

Therefore, it is with little wonder that filmmaker Shekhar Kapur, at a recent Mumbai entertainment industry conference, generally exhorted his peers to “look East, not west” for lessons and inspiration. Here is the market where the compulsions of the 15-35 demographic market segment comprising 700 million people, compared to the 65 million in the US, are driving innovation and change.

Once films are made with mass audiences in mind, it will no longer make sense to try and categorise a film in national terms. Nor indeed how and where a film is funded, who does the marketing and distribution and which country, company or language is the chosen locale, partner or lingua franca. This integration and globalisation of the film value chain will make these compartments quite redundant.

The film Dancer in the Dark had a consortium of 33 partners and collaborating agencies from five countries while Captain Corelli’s Mandolin had an Englishman as director, an American as actor, and a Spaniard actress with shooting taking place in Greece. The latter film attracted financing from the US-based Universal, France’s Studio Canal and Britain’s Working Title.

The closest top-of-mind industry that matches this level of integration and globalisation is perhaps Formula One car racing, with constructors, engineers, drivers, tyre and electronic companies, sponsors, managers, organisers, race stewards, and financiers from different countries, companies and agencies morphing into perfecting the performance and outcome of a 250 mph race machine.

India as an emerging entertainment BPO ‘hub’
What then of Hollywood’s recent love affair with the ‘runaway production’ (offshore film production) or rather its economics? Matrix was shot in Australia and Shanghai Knights was shot in the Czech Republic. Quentin Tarantino has shot much of his new film Kill Bill in Beijing and Miramax is shooting a World War II film in a deserted Shanghai back-lot.

With an average Hollywood production costing about $90 million to make and market, producers have sought to cut costs wherever they can. And one of the preferred techniques has been to do what many US manufacturers and large corporates have done: move production and processes overseas to countries that have lower labour costs (at one-eight of the cost) and looser union regulations. In essence, doing what IT services and business process outsourcing (BPO) sectors in India have been doing for a decade for many of their US and European brethren.

The Great Indian Film Industry Juggernaut already exports about a quarter of its $1.3-billion produce overseas and is looking to do the same for its mature television fare. Forging cross-border alliances helps in the due diligence of projects and de-risking the business.

It also allows for the ideation and creation of products like Monsoon Wedding and Bandit Queen by the talent working outside the immediate constraints and insularity of local market conditions. Overall, it means favourable conditions to India, which is being seen as a preferred destination for entertainment BPO. And the ‘runaway production’ would reach new heights. Best of luck.

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