International BusinessBollywood may not benefit from Reliance-DreamWorks deal
Bollywood may not get any significant mileage from the deal between Reliance ADA Group and Steven Spielberg’s DreamWorks Studios as the share of revenue from Hollywood films that run in India is small, say industry experts. According to industry estimates, the Hollywood films generate only around 3 per cent of the Rs 12,000 crore Indian film industry’s annual revenues.
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“There is nothing for Bollywood in this deal. It is merely an extension of the individual aspirations of Ambani. He will get to distribute Hollywood films in India as done by Warner, Fox Studios and others. Moreover the share of revenues generated by the Hollywood films is very low despite dubbing them in seven languages,” says Farokh Balsara, Partner & National Leader - Media & Entertainment Sector for Ernst & Young.
Anil Ambani’s Reliance Big Entertainment and Dreamworks Studios formalised their $825 million (around Rs 4,000 crore), three-year Hollywood film production and distribution deal on Wednesday in New York. The deal will give Reliance Big Entertainment, the Indian marketing and distribution rights of the 5-6 Hollywood films that DreamWorks will produce every year, while Walt Disney will hold the global marketing and distribution rights of these films.
“The funding size of this deal is much lower than what we expected. It does not do much for Bollywood or India practically. DreamWorks Studios that makes Hollywood films, will continue to do so after this deal,” says Jehil Thakkar, head of KPMG’s media and entertainment practice in India. However, some experts feel that the DreamWorks Studio deal will prove to be a beneficial one for the Indian film industry.
“India may emerge as the centre for global film financing with more Hollywood studios and independent Hollywood productions likely to come this way,” says Timmy Kandhari, head of media and entertainment practice at PricewaterhouseCoopers (PwC). “If through this arrangement Reliance can get their home productions shot in Bollywood, in to the US market, then Indian films and Bollywood will get better mileage,” says Kandhari.
On its part, Mumbai-based UTV, the producer of some Hollywood films like The Namesake, and The Happening among others said Reliance may have a rewarding experience working with the Hollywood producer Steven Spielberg. “It’s a great step forward for Reliance to associate with an icon like Steven Spielberg. We at UTV have had a very enriching experience working with M Night Shyamalan, Mira Nair and Fox Searchlight in our Hollywood co- productions and we are sure that Reliance will have a very rewarding experience too. We wish them the best in this endeavor,” said Siddharth Roy Kapur, CEO, UTV Motion Pictures.
Echoes Navin Shah, CEO of Percept Pictures said, “It is a significant step forward for Bollywood. But its the first step of a long journey. From day one, any films produced under this deal will have an Indian stamp in Hollywood. It is extremely significant in this light for the brand Bollywood.”