Can new money create a world-class film industry in India?

Rupali Mehta had always wanted to be a film producer, but last summer she found herself playing the drill sergeant. Every day, the diminutive producer of the soon-to-be-released Bollywood flick Mr. and Mrs. Iyer would haul herself out of bed at 5 a.m. Then she would cruise the hallways of the Gorumara Jungle Camp, a forest lodge deep in the Darjeeling Hills of north Bengal, knocking on doors to roust cast and crew members from their slumber. An hour later in the lodge's dining room, she took roll call as bleary-eyed stars, starlets, grips, and gaffers sipped their morning tea. "It felt like boot camp," says the 30-year-old executive producer at Triplecom Productions. "But if I hadn't been so tough, we would never have finished the movie on time."

On the set of a well-organized Hollywood production, such draconian measures might not have been necessary. But Mehta works in Bollywood, India's chaotic film industry, where cost overruns and year-long delays are the norm. In the end, though, her toughness--learned in three years as a marketing exec for Sony Corp. (SNE ) in India--paid off. The 105-member crew kept to the 50-day production schedule and stayed inside the $1 million budget for the film, a love story set against a backdrop of communal violence. Even better, Mr. and Mrs. Iyer was named Best Asian Film at the Locarno Film Festival in Switzerland in August, and in October won the Best Feature Film award at the Hawaii International Film Festival.

Bollywood, as the trades would say, is boffo these days. Of course, half the planet--the poorer half--has long thrilled to the colorful conventions of Bollywood: Boy meets girl. Villain steals girl. Girl inexplicably kicks off a dreamy song-and-dance sequence with a chorus of hundreds instantly transported from an Indian village to the Swiss Alps. There's usually a plot in there somewhere, but who cares? With stars like hunk-of-the-month Hrithik Roshan (liquid green eyes, super-muscled body, hydraulic dancing hips) and seductress Kareena Kapoor (flowing brown tresses, bee-stung lips, hydraulic dancing hips), these films have held audiences from Delhi to Durban in their thrall. The first movie to show in Kabul after the Taliban fled Afghanistan's capital last year was a Bollywood epic.

That's the enduring success of Bollywood, whose annual output of 1,000 films outstrips even the productivity of Hollywood. But now Bollywood is entering the consciousness of Western audiences and producers. Bollywood films--especially those more sophisticated and plot-driven than the usual fare--are taking the developed world by storm. Lagaan ("Land Tax"), a Bollywood blockbuster, was nominated for Best Foreign Film at this year's Academy Awards. Mira Nair's Monsoon Wedding, about a New Delhi marriage, earned over $30 million worldwide on an investment of just $1.5 million and is set to become a Broadway play in 2004. An Andrew Lloyd Weber musical called Bombay Dreams--with all the songs, sparkles, and soft-shoe that are Bollywood's trademarks--is a hit in London's West End and will soon open on Broadway. In January, production starts on Marigold, a musical comedy directed by former Disney creative exec Willard Carroll for Hyperion Pictures that represents the first full-fledged joint venture between Hollywood and Bollywood. "Bollywood has had half the world as its audience forever," says Nair. "Western audiences have now woken up and joined the rest of the world."

So Bollywood and its denizens can live happily ever after, adored by billions and embraced by Tinseltown. Well, not quite. Actually, Bollywood Takes the World is just Scene One. The question remains: Is Bollywood ready for its close-up? That's a hard one to answer. For Bollywood, as a business, is a mess.

There's plenty of potential, of course. The huge popularity of India's film industry in emerging markets has fueled an annual growth rate of 15% for the past five years--three times that of India's 5% gross domestic product growth. Despite the recent surge in popularity for Bollywood in the West, overall this year has been dismal: Only a handful of films have turned a profit. Yet in a good year, hits can deliver returns of 25% or more. Bollywood's global annual revenues, estimated at $1.3 billion this year, are small change compared with Hollywood's $51 billion. But theaters worldwide sold some 3.6 billion tickets to Bollywood films last year, compared with Hollywood's 2.6 billion (table, page 46). And new distribution is helping boost profits: Bollywood films earned $108 million in overseas DVD, video, and satellite TV sales last year, up 25% from 2000.

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By Manjeet Kripalani in Bollywood, with Ron Grover in Hollywood

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