U.S. film deals still in place for shaken Bollywood

A member of the Jewish community cries during a condolence prayer meeting in a Synagogue for those killed by armed militants in ''Nariman House'' in Mumbai, December 1, 2008.

BANGKOK/LONDON (Hollywood Reporter) - Terrorism has cast a shadow over Bollywood, India's Mumbai-based film industry, but as the smoke clears from Wednesday's attacks on Mumbai, Hollywood studios with Indian interests remain committed to the region.

After a gang of as few as 10 men stormed Mumbai with automatic weapons Wednesday, killing 183 people, including 18 foreigners, business in India's financial capital ground to a halt. An additional 239 were wounded, including 22 foreign visitors to the port city of 19 million.

Cinemas, some set to open 20th Century Fox's "Max Payne," closed Thursday and Friday, and many stayed shuttered Saturday as the five-star Taj Mahal Palace & Tower hotel, the Bollywood home to many celebrities and media executives, burned for a third day. Not until Saturday night did Indian commandos finish rooting out the attackers with grenades and rooftop raids at the Taj and other sites throughout the city.

Australian TV actress Brooke Satchwell barely escaped a Taj bathroom with her life as gunmen mowed down guests in a hallway. German media entrepreneur Ralph Burkei, 51, was not so lucky: He leapt from a height at the Taj and died on his way to a hospital.

"(The attacks are) a shocking blow to all of those in India and all of those who do business there," said Pete Smith, the London-based president of NBC Universal International, who has led his company's expansion in Asia and said he regards India as one of its most exciting growth prospects.

Smith, a regular in India thanks to NBC Universal's 26 percent stake in Mumbai- and New Delhi-based channel group NDTV, said travel to Mumbai is out for now, but he intends to fly to New Delhi this week.

HOLLYWOOD CONNECTION

The Mumbai tragedy comes at a time when Bollywood is very much on Hollywood's lips. Mumbai industrialist Anil Ambani recently invested $550 million to back Steven Spielberg's new studio, and a day before the attacks, veteran screenwriter Paul Schrader said he was bound for Mumbai to write and direct the Bollywood action movie "Extreme City." Indie director Jennifer Lynch is making the India-set mystery "Hisss," and Will Smith's Overbrook Entertainment has a deal to produce two movies with Indian entertainment company UTV.

Some wonder, though, if last week's events might do more than chill travel.

"The timing couldn't have been worse, as media sentiment for next year is soft," Asia media analyst Vivek Couto said. "What will be important to see are capital flows in India."

Spokespeople from most media companies with Indian interests said they simply are monitoring the situation at this stage.

Viacom vice president human resources Abhinav Chopra said his company's employees are safe, and the attacks have had no adverse effect on operations. Alannah Hall-Smith, Disney Asia Pacific's vice president corporate communications, said that while the situation is "terribly sad," her company remains "committed to our dedicated teams and the Indian market."

How Mumbai's markets -- India's biggest -- and the city's consumers and media industry fare during the days and months ahead will depend partly on the strength, focus and achievements of the government, soon up for reelection.

"We all feel very confident that the authorities will act to resolve the situation," Pete Smith said.

Couto expects Indian media companies to grow at an average rate of 23 percent during the next two years, boosted by a stronger advertising economy and media distribution, rising margins because of greater control of production costs, and the growth of subscription and program-sales revenue.

"Overall, it's an encouraging picture, but next year will prove challenging as sales growth falls below 25 percent from 40 percent in 2008, while earnings growth is more than halved to 3.3 percent versus 7.2 percent in 2008, and average profit margins slip to 14 percent from 17 percent," he said.

Reuters/Hollywood Reporter