Bollywood: has the business bubble burst?

With annual revenues of $1bn, and over 1,000 movies made a year, India's contribution to global film-making, via its 'Bollywood' brand, has become undeniably significant. But is the bubble about to burst? Certainly, things don't look too healthy when taking into account the worrying industry slump and string of recent box office flops. Ray Marcelo reports

Last year the world watched in horror as India and Pakistan teetered on the brink of nuclear war. This summer, tensions will again rage when an Indian secret agent rumbles a plot by Pakistan-based terrorists to steal a nuclear bomb and attack India. How do we know this? Because it is revealed by a new Indian movie, The Hero: Love Story of a Spy, which creates an action thriller from last year's political conflict.

The Hero, which cost Rs550m (US$11.5m) to make, is India's most expensive movie yet. With its cartoon villains, an unbeatable James Bond-like hero, and bellicose Indian jingoism, The Hero may seem fanciful. But it is not an unusual film for an industry that specialises in stretching reality into fantasy. In fact, The Hero is template Bollywood, the global brand name for India's prodigious film industry.

Each year India makes around 1,000 movies - more than any other country. For the purists, there are two streams in Indian cinema. The mainstream, Bollywood, is the Bombay-based Hindi-language film industry that churns out some 230 films a year. Bollywood's tributary, the south Indian Telugu, Tamil and Malayalam language-based film industry, known as Tollywood, makes around 530 films a year, many of them re-shoots of Bollywood hits.

At its peak, India's film industry has raked in revenues of around $1bn a year. And thanks mainly to the appetite among expatriate Indians for Hindi-language films, Indian movies are securing new fans in foreign markets. For instance, Bend It Like Beckham, a British-funded Indian-themed film about a football-crazy Indian girl, broke box office records in the UK and has so far reaped over $9m in gross revenues in America. And the blockbuster Lagaan (Land Tax) has set global aspirations for India's film industry after its 2002 Oscar nomination.

These films were notable in India for their originality. But here, a typical 'masala' (spicy) movie remains a standard recipe of wild plots, sumptuous costumes, slapstick comedy and, very often, excess violence. Woven in between is a love story, an epic contest between goodies and baddies, spontaneous song and dance routines and, ultimately, a victory for wholesome Indian tradition.

This formula, however, faces a serious charge: that Bollywood is getting boring. Box office figures underline the claim. Last year around 98% of the roughly 200 Bollywood films that were made bombed at the box office, signalling the worst year of commercial film-making in a decade. The industry estimates that its losses in 2002 totalled around Rs3bn ($62.5m). Even this year's anticipated blockbuster, The Hero, has been declared a flop by critics after slim pickings during its first weeks of screening.

The industry's slump has not surprised Irfan Ajeeb, a film programmer at Britain's National Museum of Photography and a Bollywood film critic. 'Since 1989 to the present day, the Indian film industry has relied on the love story,' Ajeeb says. 'But now the audience have taken 12 or 13 years of this same plot and I think they're getting tired of it.'

Critics are circling the industry looking for something to blame. Most believe the problem is content. What was traditionally the strength of Indian film-escapism is now seen as its weakness. Ajeeb says: 'The main downfall has been the neglect of the script. A lot of the films have been very very bad. The audiences are also younger and often compare [Bollywood] films to Hollywood productions, so their expectations are a lot higher.'

According to Subash Ghai, one of India's leading film producers, the industry's gloom has deeper roots. 'We are far behind in global quality. We are not there because of the lack of structured education in cinema and film-making.' Ghai blames India's education system for promoting rote learning over skills, and producing young people who cannot understand art or a play. The result, he argues, is film audiences who cannot appreciate good work, and mass cinema that has little emphasis on art. Ghai goes as far as saying that India's film industry needs a new model; even the term 'Bollywood' needs to change, he says.

Some producers are experimenting with alternative genres in the hope that bored audiences will be enticed back into cinema seats. Producer Vikram Bhatt, for instance, has brought horror in Hindi to the big screen, with the film, Raaz, a successful Hindi take of the Harrison Ford and Michelle Pfeiffer supernatural thriller, What Lies Beneath. A follow-up to Raaz, called Saaya, was due for release in India in May.

Yet, for many Indians, seeing their favourite movie remains a challenge. India has just 12 cinema screens per million people. Several state governments are now offering tax breaks for cinema exhibitors to build modern multiplex theatres (while slapping taxes on movie tickets of up to 110%). Around 1,000 new screens will be built in the next year. 'There are a lot of people who have never visited cinemas but if you increase supply, the demand will be there,' says Ajay Bijli, managing director of PVR, an emerging multiplex cinema operator.

More troubling for the industry, however, is that within days of a film's cinema release, it gets copied onto DVD or video cassette and is often screened through cable television. The industry estimates that such piracy costs Rs3.6bn ($75m) in lost revenues. Not that crime is a mystery to Bollywood. Mob money and muscle has long shadowed the industry, lured by its celebrity and influence. Gangsters are alleged to have meddled in areas like scripts and production schedules to film financing. The results are dumbed-down, stale films.

Responding to the perception that Bollywood was awash with black money, the Government two years ago permitted banks and venture capitalists to finance films. But it remains to be seen whether corporations are willing to be bold with the kinds of films they finance. Subash Ghai believes India's policymakers need to look the other way and encourage low-budget films that offer fresh scripts and a new outlook. But while the Government is not offering to subsidise such films, it hopes to see the Bollywood brand attain the global respect that India's IT industry has won. But, unless Bollywood can engage Indian audiences with new dialogue and fresh plots soon, greater respect is unlikely.

Ray Marcelo is a journalist based in India. E-mail rmarcelo@tatanova.com.