Bollywood goes global with Hollywood movie deal

· Indian billionaire to make 10 films for world market
· Faltering US economy ripe for Mumbai investment

It could be a scene straight out of a Bollywood movie. An Indian billionaire sees a foreign rival struggling to raise money as the global economy sinks, and swoops to pick up a clutch of big names at rock bottom prices.

But yesterday fiction became fact when Reliance Big Entertainment, the media arm of Anil Ambani - the world's sixth richest man - announced it would be making 10 Hollywood movies for a billion dollars.

The media group has signed separate deals with the production firms of Hollywood stars Nicolas Cage, Jim Carrey, George Clooney, Tom Hanks and Brad Pitt. However, it is unlikely that the Indian-financed films will contain the key ingredients of a Bollywood blockbuster: tears, singing, dancing, and a happy ending.

"We want to make Hollywood movies that have a global audience. We are not inserting Bollywood into Hollywood just yet," said Rajesh Sawhney, the president of Reliance. "I think Indian movies get stereotyped as all singing and dancing in the same way as Hollywood gets stereotyped for sex and violence. We are looking for good content regardless of genre."

With the economy sluggish in America, Hollywood has been courting Indian film producers flush with cash from the country's economic boom. Studios such as Disney, News Corporation and Sony have all tied up Bollywood companies in the past few years but Reliance's foray dwarfs previous deals.

"The aim is to look at 30 film scripts under this deal over the next two years, out of which 10 will go to screen. This is just the beginning of our relationship with Hollywood," said Sawhney.

The move also opens the door for Indian directors to work in Hollywood. Reliance announced that in addition to funding Hollywood films, it will also produce a multimillion dollar American gangster movie entitled Broken Horses, directed by Indian filmmaker and Oscar nominee Vidhu Vinod Chopra.

In many ways Reliance is playing catch up with its smaller rivals. News Corporation and Indian company UTV paid $28m (£24m) each to make The Happening, a thriller directed by M Night Shyamalan and starring Mark Wahlberg that will be released next month. UTV is also producing two movies with Will Smith. The final instalment of Michael Douglas's Romancing the Stone movies, called Racing the Monsoon, will also be funded by an Indian studio.

Many experts see this as the beginning of a marriage of two cultures. "Reliance is making a major move in putting Hollywood and Bollywood together. The key will be whether you can make Indian movies that sell abroad and at the same time sell foreign stars in India," said Komal Nahta, the editor of Mumbai trade paper the Film Street Journal.

Others say Bollywood has much to learn about the business of making movies. The Indian film industry puts out 1,000 movies a year but is only a £1bn business. Hollywood produces half that number of films but has 10 times the sales.

The reason for the lack of commercial success is that traditional Bollywood studios are family-run affairs which rely more on pandering to star talent than scouting for good scripts or sticking to budgets.

The new deal is a step change for Indian studios, whose biggest movies to date cost around $15m. "We are looking to make big-budget, live-action movies in Hollywood that make money for us," said Sawhney. "That will mean a different way of making movies."

Reliance, which already has 160 cinemas in India, will open a further 220 across North America to promote its new films.

There is little doubt that Reliance, which has until now kept a low profile, aims to become India's biggest media house. Its owner, Ambani, 48, is a familiar face in India. With a personal fortune of $40bn, he has weathered a bitter battle with his elder brother over the family business which ended with the company split between them in 2005. Ambani's Reliance empire already controls India's second biggest mobile phone operator and the largest FM radio station.

It has plans to launch a satellite TV platform and is creating a new 20-channel TV network. In February the financier George Soros paid $100m for a 3% stake in the entertainment arm, valuing the company at $3bn.


Randeep Ramesh in Delhi

The GuardianTramp

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