DELEGATION—Producers Slow to Jump to Indian Studios

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India has some of the largest studios in the world. It makes more movies per year than Hollywood. It has a growing talent pool of actors, directors and producers. And producing films there could reduce U.S. studios’ costs by up to 40 percent.

But American filmmakers aren’t exactly jumping on the next plane to New Delhi for co-production or co-financing of films.

That’s why over the past several months a number of representatives from India’s entertainment industry have met with executives from Walt Disney Co., Universal Studios, Sony Pictures Entertainment, Viacom and MGM.

Among the visitors was a 20-person delegation lead by Sushma Swaraj, the country’s information and broadcasting minister. Another visit was by Ramoji Rao, chairman of Ramoji Group, which owns the largest film studio in the world, Ramoji Film City. Rao announced at a June 19 press conference that he was ready to commit more than $100 million toward co-productions and joint ventures with Hollywood.

But it could be tough getting Hollywood studios to take the offer.

Indian studios still need better generators, telecommunications networks and roads leading to them, said Sushil Tyagi, director of entertainment media management consulting at PricewaterhouseCoopers LLP in Los Angeles.

Another factor: financing. “In the old world, the industry was such where people finance through independent means, and sometimes it’s not very clear visibly where the money is coming from and where it’s going,” Tyagi said. “That can cause concern in American companies’ minds.”

Indian producers say there is adequate infrastructure in their country and that financing of Indian movies did get a boost when the government opened the industry to bank financing.

The Industrial Development Bank of India, for example, has traditionally been involved in old economy industries, but now will get involved in the film industry, said Vinay Kumar, the bank’s general manager.

But the lure for American filmmakers is the cost savings from co-producing movies at Indian studios.

Of the three countries in which Disney’s 1994 live-action “The Jungle Book” was filmed England, the United States and India India was one-tenth the cost of the others, said Raju Patel, founder of Los Angeles-based Film Club who co-produced such movies as the “The Jungle Book” and “Pinnochio.”

Rao said he can provide cost savings of as much as 30 to 40 percent. That’s cheaper than Canada, which provides large tax incentives, said Frank Demartini, a producer at L.A.-based Swingin’ Productions Inc.

Cost savings have a much bigger pull among producers of lower-budget films between $2 million and $5 million, Rao said. Smaller studios often cannot provide the collateral to banks required to pay union wages. As a result, many financiers make steeper requirements on low-budget movie makers than they would on the larger studios, Demartini said.

Large U.S. production companies aren’t as interested in co-producing or co-financing a movie in India. But some are interested in making Indian movies for an Indian audience. International audiences increasingly want to see actors and stories in their own home country.

Sony, for instance, has two deals with international rights to distribute Indian movies and is looking to co-produce an Indian movie, a Sony spokesman said.

Using Indian talent also provides a fresh perspective many Hollywood studios. For instance, “Sixth Sense,” director M Night Shyamalan, did his first film in India.

But buying Indian talent may be where the cooperative efforts end. “It’s always easy to get talent because you’re not reliant on infrastructure,” Tyagi said.

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