October 28, 2005

Digital revolution set to sweep India’s Bollywood

By Narayanan Madhavan

BANGALORE (Reuters) - Digital cinema is about to take off
in India, home of the world's most prolific film industry, but
not without some twists and turns worthy of a "Bollywood"

In the United States, a digital roll-out has stalled while
Hollywood studios and theater owners fight over who pays for
top-quality computer-based projection systems that cost $80,000
to $100,000 per screen.

But in the Mumbai-based film industry known as Bollywood,
entrepreneurs are willing to settle for a bit less quality at
one-third the cost. They use cheap digital cinema in remote
towns to cash in on blockbusters -- and in the process, beat
back video pirates, too.

"Piracy can be completely prevented when the entire
industry goes digital," said Senthil Kumar of RealImage Media
Technologies, a start-up in Chennai (Madras) that makes digital
video players.

But as with mobile phones, India opts for value over top
quality, a strategy that makes sense in an industry where only
one in 12 movies has made a solid profit since 2001.

Industry officials say low-cost digital cinema, called
"E-Cinema" in contrast to the top-quality "D-Cinema," is just
what Bollywood needs. Though less than 2 percent of the
country's 13,000 cinemas are digital, 2006 should see some big
roll-outs in India.

"E-Cinema is what is going to be appropriate for countries
like India," Kumar says.

India, led by Bollywood, produces about 1,000 films a year
and Kumar calls the industry "pure Las Vegas" because producers
often gamble on a single blockbuster to make up for several
flops. But transporting celluloid prints to remote towns costs
more and gives video pirates enough time to mint cheap copies,
cutting into profits.

And that is where start up companies like RealImage come


Amit Khanna, chairman of Reliance Entertainment, an arm of
India's biggest private group, Reliance, said digital cinema
could help the industry make quick profits.

"The idea is saturation release. There is too much content
chasing too many eyeballs," Khanna said.

While it takes around 70,000 rupees to make a celluloid
print, RealImage rents out digital copies to cinema owners at
less than 400 rupees.

Using inexpensive digital copies, a theater can run a movie
for four weeks at less than 10 percent of the cost of a print,
taking the edge off cinematic flops.

RealImage, which takes an upfront security deposit, but no
equipment rentals from cinema owners, is now serving 40 screens
in its home state of Tamil Nadu, and there are plans for 100
more across India by December, Kumar said.

Mumbai-based UFO Moviez, a service provider, uses
satellites to download movies and last month ordered 500
projectors from U.S.-based Digital Projection International.

UFO now serves 50 cinemas and plans to reach 500 screens by
March, a company official said.

Chennai-based Pyramid Saimira Theater Ltd., which uses
RealImage players, is also looking to satellites. The company,
which has management contracts with cinema owners, is running
cheap digital movies in 28 cinemas in Tamil Nadu, and plans to
have 100 by the end of November.

UFO said on its Web site that digital systems can track
every playback and set an audit trail to check pirates.

Multiplex owner Adlabs Films Ltd. got into digital early
with a 100-strong E-Cinema chain, but it did not do well
because its single-microchip players offered lower quality.
Kumar said the scene has now changed because new E-Cinema
players use three microchips made by Texas Instruments Inc.
that give Bollywood a better trade-off between cost and

But there are still doubters.

"I don't want to be a mover or shaker in this," Shravan
Shroff, managing director of multiplex owner and distributor
Shringar Cinemas Ltd., which runs 22 screens.

"I would be a fence-sitter till someone else does it. I can
always go and buy the technology later."

(Additional reporting by Bob Tourtellotte in Los Angeles)