The audio-visual sector of India has got transformed becoming virtually unrecognisable compared to even a decade ago. From just films, music and broadcast, the sector has also moved into animation, gaming, visual effects and digital enter­tainment. Yojana Sharma and Jonathan Braude, journalists and authors, have gauged how the dynamics of the Indian entertainment industry is changing and explored the aspect of Indo-E.U. co-operation in the film industry in a briefing paper prepared for European Network of Contemporary Academic Research on India (ENCARINDIA).

The report takes a note of how India’s broadcast industry, valued at Rs.10 billion (€175 million) in 1995, now generates rev­enues of 22 times that (at €3.8 billion). From a few television channels just about a decade ago, there are now over 230 private and state-run channels, with a number of children’s channels opening in just the last two years. India is emerging as the world’s third largest content producer for television. The country is already the largest producer of feature films in the world. The audio-visual industry is one of the fastest growing sectors of the Indian economy, growing at the rate of 18% a year, and projected to grow at a similar rate for the next five years. The highest growth is predicted for radio and emerging areas like Internet advertising. But the largest segment will remain the broadcast industry, at 42% of the overall media industry.

While around 700 feature films are produced in Hollywood, a historical city and the hub of film and television content production of the U.S. a similar number are made in the E.U.; India produces more than 1,000 films each year.

In India, more than 3 billion cinema admissions were recorded in 2005, with box office spending at $1.7 billion (€1.34 billion). The film industry in the city of Mumbai, popularly known as Bollywood, is one of the very few national cinema industries completely independent of government subsidy. Films and film clips (song-and-dance scenes) make up 13% of television content in India, attracting the highest viewership to become a crucial part of the broadcast industry as well. Bollywood is also gaining increasing audiences abroad and is actively seeking out opportunities for tie-ups and co-production. The Indian government is also inclined toward a lib­eral regulatory environment and has permitted 100% foreign direct investment for films, entertainment television channels and animation.

Co-production of a film between countries reduces finan­cial risks for producers and gives them access to subsidies and tax breaks, television exposure and distribution, in each other’s countries. The report highlights that within the E.U., film co-operation between countries is very common, and co-production treaties may also be a way for Indian producers to penetrate untried markets in the E.U., and for E.U. producers to make films in India. Co-production treaties also enhance the chance of promotion and distribution in the other countries. The report suggests that it could be of particular benefit in Holland, a region in the central-western part of the Netherlands and elsewhere, where there is a quota system in place to protect national films. The other area of benefit, according to the report, is in cutting red-tape. The process of get­ting advice in countries where the language and regulations are unfamiliar is prohibitive for Indian companies, making it difficult to access opportunities in the E.U. without a local partner.

India already has a co-production treaty with France since 1985, and is in the process of concluding treaties with the U.K. and Italy. After having co-production treaties in place, Indian film makers can also co-produce with other E.U. countries through “triangular” tie- ups. The U.K., for example, has bilateral co-production treaties with seven other countries including, in the E.U., with Germany. The U.K.-Canada treaty also allows Indian producers as a third co-producer, as Canada recognises Commonwealth countries as co-producers. This makes a co-production agree­ment with the U.K. valuable for India.

The report suggests that the U.K. could serve as a bridge for India into other European countries. The U.K. film industry is the largest in Europe in terms of investment, presenting ample opportunities for tie-ups between Indian and British producers. Once agreed and ratified, the India-U.K. film treaty will allow Indian film producers to qualify as ‘British’ for the purpose of tax breaks and other benefits. The U.K. is already popular with Bollywood film-makers, even without a treaty. In 2005-06 more than a dozen Indian movies were shot there.