Hooray for Bollywood

Ronnie Screwvala is the front runner in the race to become Bollywood's Jack Warner—the man who transformed parochial American cinema into its modern global form. Yet Screwvala is rarely picked out of a crowd in India, let alone in the United States. Still, Hollywood insiders know him well for producing the "The Namesake," the groundbreaking hit about Indian immigrants, and for coproducing a Chris Rock comedy ("I Think I Love My Wife"). Now he's coproducing "The Happening," a sci-fi thriller coming out in June starring Mark Wahlberg and directed by M. Night Shyamalan ("The Sixth Sense") that could vault him into the big leagues. With a budget of $57 million, it will cost as much as 10 Indian blockbusters, setting a new bar for Bollywood. "Our ambition is to be a global Indian entertainment company," Screwvala says. "There's no reason we can't make big-budget Hollywood movies too."

At 45, Screwvala is a stocky, soft-spoken man whose urbane colonial English is a far cry from Jack Warner's bluster. But his innovations are putting his Mumbai-based company, UTV Software Communications, on the world cinematic map as well as setting the standard of studio efficiency in Bollywood in the way Warner did in Hollywood. Screwvala's multimedia conglomerate, which is listed on the Bombay market exchange with a market capitalization of $435 million, has interests in film, TV, animation and videogame production and distribution—it's the closest thing to the diversified Warner Bros. that India has ever seen.

Over the past five years Screwvala has led the transformation of India's prolific but chaotic film industry. India makes about 1,000 movies a year, including Bollywood's 200-odd Hindi pictures and others in regional languages—about 10 times Hollywood's total. But until recently, every Bollywood movie was an independent film made by a producer-director who ran his operation like a mom-and-pop shop. Deals were cut off the books between film families. Marketing was left to theater owners. And writers scripted scenes on the day of shooting, following stock formulas: brothers separated at birth, village rebel vs. rapacious landlord or cops vs. robbers. It was considered the height of innovation simply to meld these elements, creating, say, a story about brothers separated at birth who grow up on opposite sides of the law but then ultimately join forces against an evil landlord after much singing, dancing and weeping.

In its heyday, from the 1950s through the early 1980s, Bollywood managed to pack cinemas throughout this movie-crazy country with such fare. But its formulaic plots grew stale at just about the time that TV penetrated middle-class homes. Film revenues stagnated between 1985 and 2000 at about $1 billion annually—less than one third the box office of a single major Hollywood studio. India's poverty and low ticket prices started making foreign markets alluring. But Bollywood couldn't produce a global hit.

That may finally be changing. Indians are getting wealthier. The younger generation is spending more on entertainment. And innovators like Screwvala have begun professionalizing the business, bringing in outside investors and accounting standards as well as aggressively marketing films with novel plots. His production company has cut the old three-and-a-half-hour marathons to between 90 and 120 minutes and has hired Hollywood scriptwriters to make its features more watchable. He's also gone straight to foreign shores—backing Mira Nair's New York-based production of "The Namesake," a story about the Indian diaspora—to prove that his model will work. The film grossed about $14 million at the box office—nearly 95 percent from the United States, more cash than any other Indian production has earned abroad to date.

Indian movies are also enjoying an impressive domestic boom. In 2006, India's film business grossed about $2 billion, up from $1.5 billion in 2004, and PricewaterhouseCoopers forecasts revenue will leap to more than $4 billion over the next five years. "Our growth rates are much higher than Hollywood's, but in value terms we are way below," says Timmy Kandhari, head of PWC's media and entertainment practice. But that will change as ticket prices—which now average less than $1 in India—catch up with the racing Indian economy.