Why Indian Films Are Getting a Box-Office Boost in the U.S.

'Baahubali 2: The Conclusion' is breaking records powered by social media and a burgeoning population.

The stunning box-office success of Baahubali 2: The Conclusion — a sequel to a mythical tale about warring royal cousins in an ancient kingdom that opened April 28 in the U.S. and already is the top-grossing Indian movie import of all time with $17.2 million — was fueled by two factors: the boom in the Indian-American population and their disproportionately high use of social media.

"The social media power of the Indian diaspora is incredibly strong," says Imax Entertainment CEO Greg Foster, whose chain played Baahubali on 40 screens in North America. "Did you see one traditional commercial for this movie? No. [But] everyone who needed to know about it did."

"Everyone" means the U.S.' 3.7 million Indian-Americans whose population here soared 60 percent between 2005 and 2015 (the most recent year available from the U.S. Census). "With Indian cinema, we've been seeing the core audience grow for the past four years," says Nikkole Denson-Randolph, vp alternative and special content at AMC Theatres.

Like 2015's Baahubali: The Beginning, the sequel impressed audiences with its sophisticated use of CGI effects. But while the original grossed just $6.7 million in the U.S., the new installment drew new theatrical business with a simultaneous release in the U.S. and India, thus mitigating the damage that might have been done by bootleg copies of Indian movies that have massive circulation in the U.S. Baahubali 2 ­— released in three languages, Telugu, Tamil and Hindi ­— also is a high-water mark for the Telugu South Indian film industry, which usually takes a backseat to Mumbai's Hindi Bollywood.

Indian hits in the U.S. have included 2014's P.K., which earned $10.6 million; 2013's Dhoom 3, which earned $8 million; and the wrestling drama Dangal, the previous record-holder, which made about $12.4 million in 2016. Baahubali 2 is expected to earn twice that amount.

To promote the film, U.S. distributor Great India Films peppered numerous Indian social websites such as Great Andhra (Telugu), Bollywood Hungama and Behindwoods (Tamil) with digital ads and advertised heavily during TV broadcasts of cricket games, India's most popular sport, according to founder and co-partner Sudhakar Reddy.

The sequel was helped by strong anticipation fueled by the popularity of the original. But don't expect theaters to benefit from another installment of the franchise. Right now, director S.S. Rajamouli says there are no plans for a third outing.

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WHY AMAZON COULD "KICK NETFLIX'S ASS" IN INDIA

In March, Netflix bosses Reed Hastings and Ted Sarandos met with two of India's biggest stars, Shah Rukh Khan and Aamir Khan, part of the company's concerted effort to ingratiate itself with top Bollywood talent and infiltrate the region before its rival Amazon conquers the subcontinent first.

Amazon and Netflix both see India's 1.3 billion residents ­— and 300 million smartphone users — as their next great hope for global expansion. Amazon Prime Video India director Nitesh Kripalani says three factors make the Indian market worth fighting for: "internet users' growth, a large and vibrant entertainment ecosystem and a young demographic."

Netflix has been in India since January 2016, and while it has dabbled in such local programming as the original series Sacred Games, it largely has depended on global premium content and Hollywood fare to drive growth.

"We just hit 100 million users worldwide, and we feel the next 100 million will come from Asia," said Netflix vp content acquisition Robert Roy at a Mumbai conference in April.

Amazon didn't launch in India until December, but its regional team already has made deals with Bollywood film studios, and it since has ordered 20 original series and 14 stand-up specials.

A key advantage for Amazon: At $8 a month, a Netflix subscription costs more than what Amazon Prime India costs ($7.50) for a year. Because of that, Wedbush Securities analyst Michael Pachter predicts, "Amazon is going to kick Netflix's ass." — Bryn Elise Sandberg

This story first appeared in the May 15 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.