Brown Power or Kung Fu? - Hollywood Tries To Pick

Variety writes about the ongoing debate in Hollywood regarding where to invest next. India or China?

Nearly a decade ago, Sony opened a Chinese-language production office in Hong Kong. But the unit has had trouble finding success on the scale of "Crouching Tiger, Hidden Dragon." In fact, it hasn't made a movie in the past two years.

By contrast, India has proven bountiful for Sony Entertainment Television, which has become an established TV player in the country and is now expanding from movie buyer into local production.

Kaiju Shakedown elaborates more on the difficulties facing Hollywood in China:

China is the world’s biggest movie market but with four times the population of the United States it only has 2,396 movie screens, one fifteenth of America’s 38,000. Hollywood is eager to sell movies to what it views as an underserved market, but China only allows 20 foreign movies to be imported each year. Hollywood wants to increase the screen count by building multiplex chains across rural China, but China won’t allow foreign companies to own more than 49% of cinemas outside of the seven major cities. Hollywood is desperate to stamp out piracy, but China’s efforts to cooperate are sporadic at best. And so China is the beautiful, unattainable market that drives Hollywood crazy.

China does its best to flummox its suitor. Their State Administration of Radio, Film and Television is a massive Mao-era bureaucracy that operates like an eccentric uncle.

They recently baffled the world by banning all foreign movies that mix live action and animation, such as “Who Framed Roger Rabbit?” and “Space Jams”. Then they ruffled feathers further by yanking “The Da Vinci Code” from theaters at the peak of its successful run, with no explanations given.

In addition to being more open, India offers a number of additional advantages. From Variety:

  • Due to a wave of multiplex construction, the theatrical market is expanding. That's allowing the first steps toward nationwide (rather than state by state) releasing.
  • The pay TV market may boom if mandatory set-top decoders allow subscription revenues to flow to rights owners, rather than mom-and-pop cable pirates. The country is expected to have five DTH satellite platforms by the end of 2007.
  • The development of an organized retail sector of chain stores and supermarkets is driving growth of home entertainment, even as it looks wobbly in the rest of the world.
  • With cell phone numbers growing at more than 5 million per month, mobile entertainment is delivering real gaming and music returns. Because TV penetration is low compared with other, more developed countries, including China, some analysts expect mobile ownership to even outstrip TV.

Other distribution channels like Madhouse and SeventyMM are also emerging. Both adopt the Netflix model with one crucial difference - DVDs are not delivered by mail (the public mail service is utterly unreliable) but via private courier services.

However, as Variety notes, all is not peachykeen in the Indian market. Roadblocks remain:

India's big drawback has been that the level of overall economic development is significantly behind China and its entertainment industry is largely isolated from the rest of the world. Local-language movies account for 95% of the box office, and the soundtracks of Bollywood dominate the music industry.

...

Indian regulators are just as capable of infuriating congloms. Barely a month had passed after a new policy was put in place for mandatory conditional access systems, or set-top boxes, in order to curb cable TV theft by mom-and-pop pirates. But then regulators decreed that pay channels should not be allowed to charge more than 1 rupee (2 cents) per month, in order that the poor also can afford their shows.

Appeals are ongoing, but the notion that either country will enact reforms for the benefit of foreign interests is somewhat ridiculous.


In the big picture, however, the Indian film industry still lags behind that of China in the global sweepstakes:

Although Bollywood is bigger in absolute terms, the Chinese industry has been more successful on a world scale.

"The Chinese films generally have had larger success outside of China than the Indian pictures have had outside of India," says Sony's Michael Lynton. "The market outside India is largely people who are part of the Indian diaspora."

True enough. That's why, while all the cine buffs keep track of Zhang Yimou's latest release (Curse of the Golden Flower), events like Dhoom 2 racking up close to a million bucks in the USA over Thanksgiving weekend while playing in just a handful of screens, continue to surprise. I'm not saying the film is any good mind you - but it just goes to show the power of the brown dollar (and rupee for that matter) cannot be underestimated.

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- February 10, 2007 11:46 AM // Bollywood , Diaspora , Film , India , TV