With new financial models coming up to make money out of movie releases, the prolific Hindi film trade is ready to usher in an era of new-age flicks. Long mocked by serious international filmmakers for its formulaic scripts, dubbed voices and wooden acting, the Hindi film industry has a shot at credibility and bid for gravitas given the changes on the financial side.

A Hindi film no longer needs to cater to the lowest common denominator in order to break even. A burgeoning multiplex-going population, lucrative overseas territories, increasing demand for content from new media like Internet and cellular phones as well as options like sale of satellite rights and music rights are all new revenue streams available to filmmakers.

Merchandising is the latest emerging lucrative source for raking in the moolah. According to reports, in 2006 brand cameos earned around Rs.800 million and, as a result, even small and medium budget movies as well as animated films can hope to cash in. The figure is projected to climb to Rs.2 billion this year and reach Rs.8 billion in 2010, news reports quote.

Last year, Farhan Akhtar's "Don" tied-up with Tag Heuer watches, Motorola, Garnier, Citibank, Oakley sunglasses and Louis Philippe outfits, a report in a financial daily says. Similarly, "Dhoom 2" promoted Coke, Pennzoil, Pepe, Sony, Disney channel, Sugar Free, McDonald's, Speed, Suzuki Zeus and "Lage Raho Munnabhai" featured Worldspace, IOCL, Go Air, MSN, Good Day, Kurkure, Bright Outdoor and Reliance Communications.

The list of brands piggyback riding on "Krrish" included Singapore Tourism Board, Sony, John Players, Bournvita, Tide, Hero Honda, Boro Plus, Lifebuoy, HP Power, Acron Rangeela, Hansaplast and Lays chips. The film had maximum number of merchandise products like Krrish masks, lunch boxes, water bottles, etc. The stage has come when scripts are shared with production houses at the draft stage for them to identify brand fit without hurting the content.

Siddharth Roy Kapoor, senior vice-president, UTV, is quoted as saying that while branding does not contribute significantly to revenues yet, it has an enormous potential. "After 2006's success story, more FMCG brands and durables have woken up to the power of movies as a means to push their products. Companies are increasingly opting for joint promotions. In our forthcoming film, 'Metro', Lenovo is going to be prominently branded; in 'Hat Trick', FedEx will be a joint promotion," informed Kapoor.

For UTV's upcoming film "Goal", Reebok worked closely with the film's costume designer to create outfits for the cast. Besides helping to promote the movie with a media campaign, Reebok would also highlight its association with the movie. From being just a tactical one-off activity, companies are clearly making branded entertainment an integral part of their marketing strategy.

Spends have increased from a meagre 1 percent in 2005 to as much as 3.5 percent in the 2006-7, analysts say. Derek Bose, the author of "Brand Bollywood", says the new entertainment order includes that of Bollywood's top producers and studios have woken up to the possibilities of earning money other than from the box office which can not remain their only revenue source.

The industry has embraced the idea of media convergence and is delighting in multi-platform branding. Last year, "Krrish", a huge Bollywood sci-fi hit, came out with everything from action dolls to costumes and stationary. Kishore Lulla, chief executive of Eros International, the UK-listed film distributor, believes that Bollywood - noted for being the most prolific film industry with 900 releases a year but accounting for only 2 percent of the worldwide box office - will soon challenge Hollywood.

The Indian government has said that Bollywood will more than double its share of the global market. PriceWaterhouseCoopers, the business consultancy firm, predicted that Bollywood revenues would rise from $1.5 billion this year to $3.4 billion by 2010, driven by the proliferation of Indian multiplexes.

With money flowing in aplenty, Indian filmmakers are free to experiment and perhaps that is the reason for the slew of stark reality films that hit the theatres lately. "Parzania", "Traffic Signal" and "Black Friday" - can hope to break even in today's movie market. It is now time for big production houses and stars to follow.

The roaring film business has caught the eye of Income Tax officials and the entire fraternity of performing artists are headed for some taxing times ahead. The finance ministry is seriously toying with the idea of classifying them as service providers. As per the proposal, a film producer who engages an artist will have to pay tax at the rate of 12.24 percent on the service charge paid to the artist.

All artists will have to register themselves as service providers with the service tax department, and anyone with an annual income (turnover) of above Rs.400,000 will come under the new tax net. Filmmakers and artists are, of course, up in arms against the idea and we have not heard the last word spoken on the subject.