Interest grows for Indian film industry

Renuka Pullat has a new pitch to Silicon Valley venture capitalists.

It's about exotic locales. Melodramas full of song and dance, romance and, of course, ``a little bit of fighting.''

It's an Indian formula flick -- otherwise known as a Bollywood movie. It's also a new kind of investment for a small wave of Indo-American entrepreneurs and VCs who, having tired of gadgets and Internet technology, are seeking fortunes in Bollywood -- or at least a little bit of fun.

``Indians are very creative people and the costs are very low,'' said valley tech guru Kanwal Rekhi. ``It's just like with the software industry.''

People sense this may be the right time to make a Bollywood investment, Rekhi said. He is investing $1 million in Kaleidoscope Entertainment, which has produced films such as the highly acclaimed 1994 ``Bandit Queen,'' a story of a bandit who becomes elected to India's lower house of parliament.

So far, the numbers are small -- a handful of investors in the valley are involved, and investments are relatively small, from $50,000 to the million-dollar range. The films are high-risk ventures, but that's no big concern for people who made their fortunes in the high-risk tech world.

Interest in the multi-billion-dollar Indian film industry from tech types has picked up in the past year or two, said Kavi Raz, an independent Hollywood filmmaker who is making three Bollywood films for the U.S. market.

``Bollywood industry is a very glamorous and colorful industry,'' he said. ``They are looking for something different to sink their teeth in. And films can be profitable.''

Recent ``crossover'' movies, such as ``Bend It Like Beckham'' and ``Monsoon Wedding,'' which grossed $32.5 million and $14 million at the box office respectively, caught the eye of Indo-American investors, who hope to replicate such success and spotlight Indian culture in the United States. Americans in general appear to be more interested now in the culture of the world's largest democracy, from music to food to film -- a trend the investors hope to cash in on.

``When you've made the amount of money most of these people have made, it's good to roll the dice,'' said Duncan Clark, former president of Columbia TriStar International Distribution who is consulting one group of Bollywood tech investors.

To be sure, it's a risky business. Between 80 percent and 90 percent of films made in India are a financial bust.

``It's just like the venture capital world,'' said entrepreneur Anil Godhwani. ``If you make just one investment, the chances of losing that money is high. But if you make a dozen, the chances are one or two will be a hit.''

Godhwani -- who sold his company, Atweb, to Netscape in 1998 -- has invested small amounts in a couple of Bollywood projects, including an IMAX feature film on the Taj Mahal directed by Bharat Bala. Godhwani, who knows about a half-dozen valley tech types placing bets on Bollywood, plans to invest as much as $1 million.

`Quantity over quality'

The cost of producing Bollywood films is relatively low -- anywhere from $1 million to $4 million. In Hollywood, a $20 million film is considered low-budget.

Bollywood produces about 1,000 films a year -- about double the output of Hollywood -- and consists mostly of independent companies. Actors shoot up to 30 films at once -- ``You never know if they'll show up,'' Rekhi said.

These Indian films cater to a different kind of market -- both in India and among Indo-Americans in the United States.

``There is somewhat of an emphasis on quantity over quality,'' said independent filmmaker Ben Rekhi, Kanwal Rekhi's son, who has worked in the Indian film industry. ``They'd rather do three or four films than one really ground-breaking film.''

Target audience

When someone has a good idea, others steal it and scramble to get to the screen first, he said. Indeed, a film doesn't necessarily have to be good to pack them in at the theater; famous actors, good music and choreography trump the plot.

``Indian audiences, if they like a film, will go see it eight, 12 times,'' Ben Rekhi said. ``Everyone starts standing up and dancing. They are yelling at the movie. It's a huge social thing.''

The films must be at least 2 1/2 hours long -- but four hours are preferable -- or else the audience feels cheated.

This is the market Pullat is aiming for with her 3-year-old company, Kria. The Hillsborough resident, with the help of her husband, Krishna Pillai, a software industry executive, is trying to raise enough to fund the production of four films a year, which would cost $4 million each.

Kria's first film, ``PadmaShree Laloo Prasad Yadav,'' is a story about stolen jewels and a love triangle. ``Renowned director Mahesh Manjrekar delivers comedy, drama, betrayal, sex, music, dance and an all-star cast, fulfilling all the requirements for an international smash hit,'' Pullat's press release reads.

The movie, shot in India and South Africa, was made for about $1 million. She and her husband funded the project with their own money, as well as that of friends, family members and a bank loan.

In this genre, overseas locales add to the film's value, Pullat said. Her film, which hasn't hit the big screen yet, has already garnered about a 25 percent return from distributors, she said.

Investors in her Bollywood extravaganzas should ``safely'' garner a 15 percent to 20 percent return, Pullat said.

The market for Bollywood films, in India and abroad, is substantial.

``You have a 1 billion population in India,'' she said. ``You have this huge, endless market.''

Outside of India, there are more than 400 theaters dedicated to Bollywood movies, from Australia to South Africa to the Bay Area. And then there is the mainstream U.S. market, which some investors hope to crack with crossover movies in the mode of ``Monsoon Wedding.''

More investors

``It's the beginning of a trend,'' said Vivek Wadhwa, who co-founded two tech companies in Raleigh, N.C. He has raised $500,000 from other successful Indo-American techies in the valley and elsewhere. He's looking for an additional $300,000 to cover marketing costs.

``For the next two, three years, you'll see a lot more people like me'' investing in the Bollywood business, he said. ``If you invest in a tech company, it will be three, four years before you'll see any returns. If you invest in a Bollywood movie, you could get your investment in a year.''

Shooting on his first film, ``My Bollywood Bride,'' begins in May. The movie tells the story of an American who falls in love with an Indian woman, then travels to her country and encounters cultural mishaps and disapproving relatives.

Certainly, any Bollywood movie can be a financial bust, Wadhwa admitted.

That doesn't bother Ashok Rao, a founder of four tech companies and a Bollywood investor with Wadhwa.

``I think I might get involved more, even if it doesn't break even,'' the Houston resident said. All he wants is ``a nice, fun, tongue-in-cheek movie.''

For sure, working on the Bollywood project isn't the same as sitting around with a bunch of engineers.

``I got in trouble with my wife for getting all gooey-eyed with Miss India,'' Wadhwa said.