Audiences in these markets continue to watch Hollywood movies. But they also enjoy films made in their own language about stories and issues that are culturally relevant to them.

"We've been very successful with our big global productions, such as Pirates of the Caribbean and National Treasure ," says Mr Reed. "But we think there's a natural way to supplement these films in areas like China, Russia and India - areas that have built-in film traditions."

Disney has spent the past couple of years establishing creative offices and developing projects in each of the big emerging markets. Those efforts are now coming to fruition as films hit cinema screens.

In Russia, Book of Masters , Disney's first Russian live-action production, is due out next year while a new Russian version of the company's hit High School Musical franchise is also in the works.

The group sees producing local content as a way into the Chinese market, which restricts the number of US movies shown at its cinemas each year. "We feel that to be successful in China we need to be identified more with the local consumers," says Stanley Cheung, executive vice-president and managing director of Disney, greater China. "We want to produce a steady stream of [locally produced] movies."

The group last year released its first Chinese movie, The Magic Gourd, and has a second, Touch of the Panda , in development, as well as a Chinese version of High School Musical .

Localisation also suits the Indian market. Cinemagoers in the country account for more than 50 per cent of all global admissions, while development of multiplexes and expected increases in ticket prices will see the Indian film industry double in size from $2.5bn to more than $5.5bn in the next two years.

"We have 3.5bn admissions in India every year," says Mahesh Samat, senior vice-president and managing director of Disney, India. "There's an opportunity for Hollywood films to grow but the big growth from a brand standpoint . . . will come from local productions. It's imperative that we get into this space."

The group has two films in the pipeline: Zokkomon , a live action Hindi film, and 19th Step , which is aimed at Tamil and Hindi audiences.

Some emerging markets have not had wide exposure to Disney characters and stories so the company has had to almost reinvent its brand using new, locally produced movies to tell audiences what it stands for.

"We want to make what's culturally relevant in these countries by finding the right filmmakers and styles and applying these things to the Disney brand," says Mr Reed. This means avoiding the sorts of issues and subjects that would taint the company's reputation for clean, wholesome family fun. "So we can have romance but no sex, complicated characters but no bad language and adventure but no graphic violence."

The hope is that the new generation of locally produced Disney movies can propel the group's other businesses, as Disney movies do in the US. "We are competing in the same space [as Sony and News Corporation] but we have a great competitive advantage," adds Mr Reed. "Our movies drive all other parts of the business, whether it's our consumer products or theme parks in China."

Source: FT.com

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