Indian Firm Takes a Hollywood Cue, Using DreamWorks to Expand Empire

When Amit Khanna arrived in Hollywood two years ago, few knew who he was. But the chairman of India's Reliance Big Entertainment was ushered into the homes and offices of Tom Hanks, Brad Pitt and Will Smith because they knew his billionaire boss was looking to pump money into movie production. "Everyone wanted to meet us," says Mr. Khanna. Reliance Big Entertainment Director Steven Spielberg and Stacey Snider of DreamWorks with investor Anil Ambani (second from left) and Amitabh Jhunjhunwala, far right, an executive with Big Entertainment's parent company, Reliance ADA Group. Mr. Khanna's boss, Indian industrialist Anil Ambani, wants to move Hollywood into Bollywood in a big way. In August, Big Entertainment signed a deal where it paid $325 million for a 50% stake in Steven Spielberg's DreamWorks SKG and the right to distribute its movies in India. Big Entertainment's deal with DreamWorks marks the arrival of a new global player in the entertainment industry. After only two years, Big Entertainment has spent a billion dollars expanding its entertainment empire -- which spans theaters, television and radio -- and plans to spend billions more. Mr. Khanna, who recently outlined plans for Big Entertainment in an interview, says they hope to begin the distribution with one of Mr. Spielberg's films next year. Big Entertainment has entered separate pacts with Hollywood stars to provide financial backing for scripts, which in return, would give the Indian company an option to co-finance any of the resulting films that are picked up by Hollywood studios. Mr. Ambani, in asking Hollywood to supply the content for his Indian customers, has essentially engineered a reverse outsourcing deal -- and Mr. Spielberg is the company's test-case. Big Entertainment will take DreamWorks movies in the works, such as "Cowboys and Aliens," "Dinner for Schmucks" and "39 Clues," and sell them through its theaters, its satellite networks, its movie-rental service, its radio stations and even its phones. "We have a presence in every platform," Mr. Khanna says, referring to the media buzz phrase of "four-screen presence," meaning the big screen, cellphones, computers and televisions. Big Entertainment's parent company, Reliance ADA Group, owns India's second largest cellular company, Reliance Communications. And because more Indians have cellphones than computers, Reliance is hoping to push pieces of the Hollywood content -- such as music, ringtones and movie clips -- through mobile devices. In addition to its TV and radio stations, the company has built Bollywood's biggest movie studio, a satellite-TV service and a global chain of movie theaters as well as India's versions of Blockbuster and Netflix. The Indian movie business has long been dominated by mom-and-pop shops that make films without the budgets, schedules or story boards that are the norm in the U.S. industry. In contrast, Big Entertainment is embracing the Hollywood modus operandi of big budgets, publicity spending and wide distribution. The company is shopping Bollywood films around at film festivals at an unprecedented rate, Mr. Khanna says. Big Entertainment will test its lessons from Hollywood with "Kites," a movie that aims to target audiences outside of India. With a budget of $30 million, it is one of the most expensive Indian movies made. "Kites" stars the hunky Indian actor Hrithik Roshan and is written and directed by Indians. But it's set in Las Vegas and performed in English, and the foreign version of the film has chopped out all the song and dance sequences that are hallmarks of traditional Bollywood productions. (The numbers will be included in the Indian version.) The 50-year-old Mr. Ambani is an heir to one of India's great corporate fortunes, a textile, telecom and power empire called Reliance group. After his father died, Mr. Ambani and his older brother Mukesh split the group. The Ambani brothers, who don't get along, were at one point worth more than $70 billion combined. More than Mukesh, Anil has become a part of Bollywood -- the name for the Indian movie industry based in the city of Bombay, now known as Mumbai. Mr. Ambani married a former movie actress and hangs out with some of India's biggest stars. While Mr. Ambani is also a big fan of Mr. Spielberg -- "Raiders of the Lost Ark" is one of his favorite movies -- his associates say he's in the venture for fortune not fame. Some analysts and investors think Reliance's connection to Mr. Spielberg could provide the scale needed for an eventual public offering of stock. Amitabh Jhunjhunwala, group managing director of Reliance ADA group, said they aren't planning one any time soon. The history of foreign investors in Hollywood is long and rocky. The 1980s saw a flood of Japanese investors without much success. In 1994, for example, Sony Corp. had to write off $3.2 billion on its investment in Columbia Pictures Entertainment Inc., which the Japanese electronics company had bought five years earlier for $5 billion. Reliance executives say they hope to avoid mistakes by not becoming too involved in making the movies. "Do you think I will go and tell them where to place the camera?" asks Mr. Khanna, who has written hundreds of film songs and a dozen movie scripts for Bollywood. "That would be stupid."