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Bollywood's Internet download deal

Bollywood churns out about 1,000 films a year.
Bollywood churns out about 1,000 films a year.

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BANGALORE, India (Reuters) -- India's film makers are offering Internet movie downloads on Web site Kazaa in a move that could lower costs and boost revenues in Bollywood, the world's most prolific film production center.

Some 35 producers will be able to sell movies using Kazaa, a file-sharing program owned by Australia's Sharman Networks Ltd, according to company statement.

"In a distribution deal struck between Sharman's partner Altnet, Inc. and, one of the most popular Bollywood entertainment sites, Kazaa's estimated 60 million global users will gain access to previously unavailable content," the statement said.

The industry started its first download last month when Kazaa's users were offered "Supari" (A Contract for Killing), a slick thriller, for $2.99. The file was programmed to self destruct after being viewed and could not be copied.

"It was a thrill for me to become the first to do it, in an industry which had ignored the Internet, or did not pay enough attention," said Meenu Kumar, the film's executive producer.

Mumbai's Hindi cinema dominates India's movie industry, which churns out about 1,000 films every year.

Only about 10 million of India's one billion people are Internet users. But with another 20 million Indians overseas, the Internet could become a worldwide box office for Bollywood.

IndiaFM's customers include Mukta Arts, controlled by director Subhash Ghai, and Tata Infomedia Ltd.

"The deal means that Bollywood producers can now distribute movies, music and other large, rich media files online that would be too large and expensive to host on a traditional Web site," the statement said.

Long term

"We are starting with promotional content but we are in the process which will allow movies and songs on a pay-per-view mode in the new year," Saleem Mobhani, co-founder of IndiaFM, which is run by Virtual Marketing India Pvt Ltd, told Reuters.

Industry officials do not expect quick revenue, but see long-term potential in India, where movie distribution deals are sold via territory rights, roughly for each state, and DVD and television broadcast rights are sold separately.

"There will come a time soon when it (the Internet) will become a solo territory on its own," but could be at the expense of video disk sellers, said Kumar.

"More than cost efficiency, it is very convenient for non-resident Indians," Kumar said. "And I sincerely think it curbs piracy."

Hollywood has been slow to embrace downloads, seeing the medium as a threat to existing revenues. Kazaa has faced criticism and opposition in the industry, but is confident that secure Internet distribution can be safe and legal.

A survey by Britain's Informa Media Group said this year that Internet movie sales could be worth more than $800 million a year by 2010, but said illegal downloads were already costing as much as $92 million in lost revenue.

Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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