The popularity, among Indian fans, of James Cameron’s three-dimensional blockbuster Avatar and Carlos Saldanha’s computer-animated film Rio has lured private equity capital to back to movies.
Dar Capital Group, in collaboration with BVG Films, will invest 1 billion rupees ($22.5 million) to produce and market three 3-D films over the next two years, starting with India’s first stereoscopic (which enhances the illusion of depth) 3-D horror film called Haunted 3D.
The attraction of special effects will bring fans to theatres, said Arun Rangachari, chairman of Dubai-based Dar Capital, a 2.5 billion rupees ($56 million) film fund with six movies in the pipeline. Three-dimensional movies, which present the width, length and depth on the screen, are perceived as enhancing the film-watching experience.
“We tested various genres among the audience to find what they would like to see on 3-D and amongst their choices of horror, action and thriller, horror topped the list,” he said.
While romantic comedies, thrillers and dramas usually are popular in India, horror films have a dedicated fan following here.
For instance, Avatar, released in December 2009, grossed more than 1 billion rupees ($22.5 million) in India, the highest ever by a foreign language film. The animated comedy Rio with 3-D special effects, released on April 8, grossed 28 million rupees ($0.6 million) in its opening weekend in India. Revenue from ticket sales in this country is expected to grow to 130 billion rupees ($2.9 billion) by 2013 from 87.80 billion rupees ($2 billion) in 2009, according to a report by audit and consulting company PricewaterhouseCoopers.
Other funds also are looking at 3-D technology, but are waiting before they take the leap.
“We would like to wait and see how the audience reacts to them,” said Samir Gupta, a senior partner at Cinema Capital Venture Fund.
His fund, which has backed films like All the Best, said investors are trying to differentiate themselves by backing specialized projects.
India is the world’s largest producer of films with about 1,100 films released each year and 3.5 billion tickets sold. The Indian audience is open to varied offerings, and there are many outlets for these movies including television channels.
The film industry is expected to see an annual growth rate of 13% at 176 billion rupees ($3.97 billion) by 2012, according to PricewaterhouseCoopers research.
But investing in movies comes with its own set of challenges.
Finding scripts that will be attractive to present in a 3-D format is a challenge, said Sheetal Talwar, managing director, Vistaar Religare Film Fund, which has backed films such as Rann, Waiting Room, Joneses and Rakt Charita I.
“I am interested in 3-D, but we don’t have the technology, budget or the finesse required for it here,” he said.
But Indian fans will get their share of these movies through the 30 films slated to be released over the next 12 months.
Source: The Wall Street Journal