The Indian film industry is the biggest in the world in terms of production - India produces over 800 films a year compared to about 700-odd in the US. (Just for the record, the next highest is France with about 170). But, quantity does not mean big bucks. The Indian film industry grosses about USD 500 million per annum, a fraction of Hollywood's USD 10 billion.

Komal Nahta of Film Information (November 17, 2001) identifies some of the causes of the poor quality of most of the Indian films: lack of a bound script, star interference, lack of seriousness, blindly following trends, lack of objectivity, being dishonest to one's subject, missing the soul in a remake, time-bound pressure, the yes-men syndrome. The result is evident so far this year. With two unlikely hits in the form of the period films Lagaan and Gadar, conventional wisdom has been turned on its head. The industry has suffered huge losses as established banners and stars have disappointed audiences.

India is now no longer a homogenous film market. There are three clear divisions: the urban Indians (major metros), rural Indians (interior India) and the NRIs (outside India). Each segment has different expectations. Only a handful of movies have bridged this divide effectively in the past few years. The biggest Indian successes have earned Rs 70-100 crores (USD 14-20 million). Compare this with the first weekend gross of the Harry Potter movie of USD 90 million in the US alone. Of course, production costs of Indian movies are comparatively small: about Rs 10-15 crores (USD 2-3 million) compared to tens of million dollars for most Hollywood productions.

Amidst all this needs to be the realisation that the expectations and attitudes of Indian movie-going audience has changed in the past few years. The ongoing opening up of the Indian economy, rising income levels, easier credit and television's diversity has increased the horizons and expectations of Indians. Audiences are much more aspirational, the youth has greater spending power, and there is a need for "something different". At the same time, time is becoming a premium. Setting aside a minimum of three hours to watch a Hindi movie (add another hour for travel) is no longer the easiest thing to do.

The irony of it all is that at least one of the problems in India -- the lack of availability of quality theatres - is being solved through the proliferation of multiplexes. The multiplex boom is creating the platform at a time when quality software (the film itself) is becoming rare and the competition for the audience time is increasing. This is a period of flux: the infrastructure for watching quality entertainment is being put in place, even as film-makers are only now realising that the audience in India is not what it used to be 10 years ago.

In the coming years, Indian films will increasingly need to be thought of as "branded products" and need to be marketed as such. Additional revenue streams like merchandising, DVD sales and video games will need to be targeted. They will need to also target "crossover" audiences (non-Indians in international markets), along the lines of "Crouching Tiger, Hidden Dragon", which earned USD 100 million worldwide. Of course, the basic requirement remains that of producing a quality product. Here, there is a need to look beyond the regular formulaic stories and yet produce a crisp, tight film with broad appeal. This is the inherent challenge for Indian film-makers if they have to retain, regain and extend their audience.