BOLLYWOOD’S HOLLYWOOD RESCUE

Steven Spielberg, Hollywood’s iconic film director’s cash strapped DreamWorks Studios will receive a lifeline of $825 million in financing for film production as part of a 50:50 joint-venture with India’s Anil Ambani founded Reliance Big Entertainment (RBE).

Of the $825 million, RBE’s parent company Reliance-Anil Dhirubhai Ambani Group (R-ADAG) will provide $325 million as equity infusion while The Walt Disney Company will table $175 million in distribution advance. Rest of the funding will come from the global financial services firm JP Morgan Chase & Co as debt.

The Indian Film industry popularly called ‘Bollywood’ that churns out the largest number of movies in the world, has welcomed global film production companies in to its fold including the U.S.-based Twentieth Century Fox Film Corporation, Warner Brother Entertainment, Inc., Viacom Inc., Sony Pictures Entertainment, Inc., among others in partnership deals with Indian counterparts for film production and distribution.

Renowned Indian actor Shahrukh Khan's Red Chilies Entertainment and director Karan Johar's Dharma Production's have recently entered in to a marketing and distribution deal worth more than $20 million with Oscar winning film Slumdog Millionaire’s fame Fox Star Studios, a joint venture between Twentieth Century Fox and the U.S.-based News Corporation’s Indian subsidiary Star India.

DreamWorks has required funds since it parted ways with the U.S.-based media conglomerate Viacom Inc’s Paramount Motion Pictures Group in September 2008. The financing deal will enable Spielberg to resume movie production, with the target to make five to six films per year. The first production is scheduled to start this year for release in 2010.

The Ambani-Spielberg joint-venture potentially elevates the fledgling $2 billion Indian movie entertainment sector growing at 9% compound annual growth rate (CAGR) to global scale with projects in the pipeline involving Hollywood stars George Clooney, Julia Roberts and Brad Pitt, among others.

RBE’s Holywood ambitions are not limited to DreamWorks only. BIG Pictures, owned by RBE, has plans to produce films with Nicolas Cage’s Saturn Productions, Jim Carrey’s JC 23 Entertainment, George Clooney’s Smokehouse Productions, Chris Columbus’ 1492 Pictures, Tom Hank’s Playtone Productions, Brad Pitt’s Plan B Entertainment, Jay Roach’s Everyman Pictures, Brett Ratner’s Rat Entertainment and Julia Roberts’ Red Om Films.

MEDIA & ENTERTAINMENT: AN EMERGING HOTBED

Prospects of the Indian Media and Entertainment (M&E) sector estimated to grow to about twice its current size of $11.6 billion by 2013 prompted global media and entertainment companies such as The Walt Disney Company, The Warner Group, Viacom, Inc., Sony Pictures Entertainment, Inc., The Financial Times and the Dow Jones & Co. to enter the market that has grown at a sustained pace of about 15% annually during the last five years by either acquiring a stake or partnering with an Indian counterpart.

Among the most recent expansion plans in India, News Corporation, the world's largest media conglomerate by market capitalization, had announced that it will strengthen its presence in the country by investing more than $100 million to launch six new regional television channels last year.

The potential for growth in India’s M&E sector is underscored by the low penetration base. For instance, the print media with low penetration rate of 38% and the cable & satellite penetration in the country of just about 50% offers a large market that remains to be tapped. See our Special Report highlighting the trends in the sector.

Entertainment, media record 17% growth in 2007

The entertainment & media (E&M) industry has recorded a growth of 17% in 2007 to cross the Rs 50,000-crore-plus mark, according to a report. The E&M industry has reached an estimated Rs 51,300 crore in 2007, up from Rs 43,800 crore in 2006, according to a Ficci PricewaterhouseCoopers 2008 report on Indian entertainment and media industry for 2007.

The Financial Express
http://www.financialexpress.com/news/
Entertainment-media-record-17-growth-in-2007/285173/