December 27, 2000, 10:41 AM — When I asked the concierge for a taxi to go interview film director Subhash Ghai at his studio in Mumbai, he sized me up with new respect and summoned a Mercedes instead of the usual Fiat. "Mr. Ghai is the greatest showman in Bollywood," he says. "And he is clean!" This was not a reference to hygiene; India's $1.3 billion movie industry is notoriously riddled with mob interests.
But with Mukta Arts, India's first publicly held movie production studio, Ghai is aiming for corporate respectability. He hopes to capitalize on what many see as India's almost unlimited potential to provide competitively priced, quality content, animation and special effects for the IT-driven entertainment world. "No one could miss the importance of content in the America- Online-Time-Warner deal," he told me. "This is where IT meets the movies."
Last year, for the first time, the Indian government -- anticipating software and content opportunities in the convergence of the Internet, communications and entertainment industries -- the "ice age," Indians call it -- recognized the movie business as a legitimate industry, qualifying the studios for bank loans and tax breaks. Since April, videos, like computer software, are exempt from export taxes.
India is already the globe's largest producer of films, annually cranking out some 800 titles. Exports earned $100 million last year, a tenfold increase since 1990. This year's earnings are estimated at $250 million. Management consultant Arthur Andersen predicts Indian exports will expand by at least 50 percent each year, earning around $3 billion by 2006.
India's IT software and engineering savvy is spilling into India's fast-growing reputation as an outsourcing center for high-quality, low-cost animation and special effects. (Indian companies typically charge 75 percent less than U.S. companies.) India's Pentamedia Graphics did the 3-D animation for the U.S. film Sinbad and will do the same for Ali Baba and the Forty Thieves. The company also has deals in France and Japan. Arthur Andersen forecasts that Indian animation exports alone will reach $2 billion in 2003.
The evening we talked, Ghai was working late in a recording studio dubbing a film score. The equipment was impressive -- the Fairlight MFX-3 Plus-equipped digital audio workstation is the first of its kind in India. But the building had no air conditioning and was located at the end of a rutted, unpaved road. Mopping sweat from his brow, 57-year-old Ghai took a break and described his plans to expand his setup at nearby Filmcity (a Bollywood production center) into a Hollywood-style studio with state-of-the-art production and post-production facilities for features, advertising, TV films and serials. Some 2.3 million Indians work in the movie business, including technicians, engineers and animators. Employment is expected to grow 70 percent in the next five years.