India's struggling Bollywood film industry is expected to go into profit by 2004, according to a report.
Shahrukh Khan and Aishwarya Rai star in Bollywood's Devdas
The growth will be down to larger companies becoming more dominant and fewer films being produced, according to management consultants KPMG International.
The industry is also expected to be less reliant on domestic cinemas as revenue increases from overseas releases, video sales, satellite and music rights and cinema advertising.
Although revenue in Bollywood has increased during the last five years, losses have also increased, reaching three billion rupees last year.
Expected annual growth: 19%
Expected gross revenue by 2007: 93bn rupees (£1.26bn)
Last year's actual revenue: 39bn rupees (£520m)
High-profile movies from 2002 such as Devdas and Mr and Mrs Iyer did not bring in as much cash as had been hoped, the report added.
The number of films made annually is expected to fall from 1,200 to below 1,000, leading to an increase in the average revenue per movie.
The report was supported by some of Bollywood's veteran film producers, who said they agreed that its prospects were improving.
Mukesh Bhatt, a leading Bollywood producer, whose film Raaz was one of 2002's biggest hits, said: "The year 2003 will be as bad as 2002, but from next year things
will change as more and more young and creative talents handle various aspects of film-making."
He added that better marketing and production
quality as well as tighter copyright laws were expected to attract bigger audiences.
The industry would break even within the next 18 to 24 months
The report said there was a target audience of more than 10 million Indian households, but actor-producer Aamir Khan recently said Indian films had to be made with an "international audience in mind".
"We are already seeing it happening in crossover cinema," Khan, who was behind the hit film Lagaan, added.
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Lagaan was nominated for best foreign film at 2001's Oscars, gaining a major surge in interest both for the movie and for Bollywood in general.