Hollywood and Bollywood are, to a great extent, a world apart in their business and legal practices. There are many subtle and glaring differences in the ways these industries are structured and operate, leading to the creation of a chasm between the two. In order to bridge this chasm, the first step is to discern these differences and comprehend their implications.

Structural Differences

One of the important differences between Hollywood and Bollywood is in their structure.

Filmmaking in Hollywood is carried on by both recognized major studios and the independent sector. Mega-corporations, major studios (such as Disney, MGM/UA, Sony/Columbia, Paramount, Universal, Warner Bros.) and mini-major studios (such as Orion and New Line) provide a well-structured organization and standardized processes. Studios participate in the full value chain of filmmaking, from financing, producing and distributing of the films. The Motion Picture Association of America ("MPAA") and its international counterpart, the Motion Picture Association ("MPA") represent the collective interests of major studios and advocate the American motion picture, home video and television industries, domestically as well as internationally. Major studios are multinational marketing corporate groups, which own distribution channels around the world. They rarely release a film with a low budget unless they are "pickups", i.e., films independently financed and then acquired for distribution. Since the studio is itself in the business of making films, there are likely to be a number of approvals and controls imposed by the studio on the producer, unless the producer is very experienced and has an established relationship with a studio. Low budget films are typically released through smaller independent distributors.

Hollywood films are also produced by independent production firms or individuals engaged in filmmaking and distribution ("Indies" or "Independents"). The American Film Marketing Association ("AFMA")⁶⁷ represents the interests of the Indies. AFMA is a trade association of film distributors based in Los Angeles for the marketing of films on a worldwide basis. While Indies contribute significantly to bringing creativity and variety in the industry, their success and presence is arguably limited. Often Indies collaborate with studios on various aspects of filmmaking. Moreover, unlike major studios, Indies rely heavily on bank financing.

In contrast, Bollywood is primarily organized around individual personalities leading to significant idiosyncratic variations from one film to another. However, in the earlier stages, like Hollywood, Bollywood also, functioned under the grip of large studios that gave way to the present star system. As it stands today, there is no concept of studios in Bollywood. Interestingly, the terminology used in both these industries greatly varies. For example, a studio in Bollywood means a firm that simply rents production facilities and space to filmmakers for indoor and outdoor sets, make-up rooms, trolleys, shooting lights, power connections, catwalks, contract labor, etc. Typically, most established Bollywood production houses are family-run units with historical ties with the film industry. It is generally these large production houses that undertake big budget films. However, recently, the industry has seen a new breed of producers emerge. These are non-industry entrepreneurs with strong financial resources and a matching enthusiasm for the industry.

Hollywood films offer tremendous variations in their themes reflecting current trends and creating new ones. These trends tend to change every year. For example, year 2000's trend of romantic comedies targeting teenage audiences gave way to fantasy films and the rebirth of big-film franchises in 2001. After the wake of the September 11th, 2001 attacks, Hollywood witnessed a period of soul searching over violent action films.⁶⁸ Similarly, last year Hollywood saw a lot of sequels to earlier blockbusters (e.g. Harry Potter, The Lord of Rings, Star Wars and Star Trek).⁶⁹ In Bollywood, the concept of sequels does not really exist.

In contrast to Hollywood, Bollywood films offer a limited variety of themes, with most films focused on family values, religion, social issues, or romantic drama. While most Hollywood films are plot- and reality-driven, Bollywood films provide illusion, emotional exaggeration, and interruptions through song and dance sequences.⁷⁰ Exaggerated acting and dance sequences provide an escape from the realities of life. Melodramatic situations and stereotypical characters are common in most Bollywood films. The themes often come in long cycles: in the early years came religious films; the fifties and early sixties saw nationalistic, socially-desirable films; the late sixties and early seventies was the era of romance with Rajesh Khanna as a "chocolaty" hero; the late seventies and early eighties was the era of social issues, with Amitabh Bachchan as “the angry young man” since the late eighties, the era is again of romance.

Due to the similarity in storylines, the Indian audiences do not appreciate new films, and this is one of the main reasons for films doing badly at the box office. Past experience shows that even well-made films flop mysteriously. In the years 1999 and 2000, only 15.3% and 9.57%, respectively, of the films released managed to do good business.⁷¹ The remainder either suffered marginal losses or just managed to break even. Comparitively, the year 2001 was a year of mixed fortunes for the Indian film industry. It offered films with different themes and strong storylines in mainstream cinema like Lagaan (a patriotic film), Gadar (communal and nationalist film), K3G (family oriented), Asoka (historical) and Dil Chahta Hai (a very trendy new-age film). Similarly, offbeat mainstream films like Monsoon Wedding, Bollywood Calling and Chandini Bar also did good business. Bollywood is evidently attempting to do away with the standard storylines and venture into something new. In the year 2002, only 7% to 8% of the films managed to generate any business.⁷²