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Under Deal, New Bollywood Films Will Go Global Via Subscription VOD

For Hollywood studios, the international market is a potential goldmine. In 2010, for example, the U.S. movie industry made 67 percent of its $31.8 billion in theatrical revenue at movie houses outside the U.S. and Canada. But for Bollywood, the world’s most prolific movie production hub, foreign distribution remains a nonstarter for most local suppliers.

Enter Mela, the global subscription VOD service launched last year by Verismo Networks. Starting Friday, with the release of the Hindi-language Bollywood drama Chaurahen, the service will offer big-name South Asian titles in the U.S. and other international markets on the same day that they premiere theatrically in India.

For global fans of South Asian cinema, the offering is somewhat unique: Outside of illegal downloading sites, Americans living abroad do not have online VOD access to major-studio Hollywood titles as they debut in theaters domestically (although, locally, some independent studios are experimenting with that model). That’s because of the intricacies of Hollywood release windows.

Mela (a Hindi word that translates into “gathering”) bills itself as, in the words of company marketing VP Pankaj Bhushan, the “Netflix of Bollywood,” offering more than 500 Bollywood movies for on-demand viewing, as well as around 45 live South Asian TV channels, in a subscription package that starts with a $149-a-year for full access. In addition to personal computers, the service is available through a proprietary set-top box and other over-the-top devices like Roku, as well as Apple (NSDQ: AAPL) iOS equipment like the iPad.

Launching in October, Mela has gathered only a small subscription base numbering in the tens of thousands across 21 countries. But Intel-backed Verismo thinks the opportunity for its start-up is huge. According to Bhushan, there are more than 5 million people of South Asian descent living in the U.S. alone. “But the largest Bollywood films don’t see more than a 250 print release in the U.S. (meaning it would be playing in 250 theaters) simply because not enough mainstream cinemas are willing to carry foreign films. The economics don’t stack up, and distribution only gets worse for small- and medium-budget films,” he explained.

The company says availability of South Asian titles on big U.S. online services isn’t much better — by Mela’s count, only around 30 Bollywood films can be found on Netflix (NSDQ: NFLX). Mela says it is aiming to have at least one title a month on its service that debuts day-and-date with its South Asian theatrical premiere.

“This content has massive global appeal, but traditional distribution outside India is totally broken,” Bhushan added. “The internet is the best medium to reach the distributed global audience for this content, which has suffered from massive piracy due to the breakdown of traditional distribution.”

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