Bollywood is booming. Yes, what may look like actors hopping on one foot, furiously waving their hands in the air is actually the second biggest film industry in the world. With over a thousand films produced every year (double Hollywood's figure), the industry employs over 6 million people. Annual ticket sales in India are about US$3.1 billion, while Hollywood films grossed only around US$2.9 billion in 2001. More people watched Bollywood films, too: 3.8 billion compared with 3.6 billion for Hollywood films. American business is starting to take note — retail giant Wal-Mart is the official sponsor of Bollywood movie awards this year.

So what is the secret? What is Bollywood doing that Hollywood isn't? The answer is simple: Bollywood is capturing a market that likes music,dance and plots that aren't always centred on violence and bedroom scenes.

Bollywood fans — Hindi, Telugu, Bengali and English — love a good love story with a beautiful heroine, a handsome hero, a good cry, a belly laugh and lots of music and dancing. It is pure, 100 per cent caramelised, gooey, syrupy, sugary dance and drama. Once upon a time Hollywood knew the magic recipe, but you have to go all the way back to the Sound of Music for anything to rival the best of Bollywood. No one leaves a Bollywood film feeling depressed, angry or bitter. Exhausted, maybe — a typical film for Indian audiences lasts three hours!

The themes of Bollywood range from star-crossed lovers and angry parents to love triangles, family quarrels, extravagant self-sacrifice, corrupt politicians, kidnappers, conniving villains, courtesans with hearts of gold, long-lost relatives and siblings separated by fate, dramatic reversals of fortune, and convenient coincidences.

The most successful Bollywood film in Western cinemas so far has been the 220-minute Lagaan, nominated at the Oscars for Best Foreign Film in 2002. It is a classic tale of naive innocence (happy villagers) against malevolent despotism (moustache-twirling British soldiers). In 1893 farmers are near despair in a drought. But worse is to come. Heartless colonial overlords have decided to raise the land tax (lagaan). When they plead for mercy, the evil captain offers to exempt them from the tax for three years if they win a cricket match, knowing full well that the locals have never seen, much less played the game. If they lose, they will pay triple tax. The villagers are poor but proud and they accept. No prizes for guessing who wins, but of course the battle goes down to the last ball of the game. (Even Americans will begin to appreciate the mysterious attraction that cricket has for its Indian fanatics.)

Lagaan is a clever film, full of lush romantic songs and magical dance routines which trump the best of Busby Berkeley. The influential critic Roger Ebert described it as "an enormously entertaining movie, like nothing we've ever seen before, and yet completely familiar." In a sense, it resembles the best of the Golden Years of Hollywood. The heroine is coquettish but pure; the hero is square-jawed and courageous; the villains are truly despicable. Family life is happy and village life is peaceful and full of heartfelt Hindu piety.

What a contrast with Hollywood with its steamy bedroom scenes, kinkiness, violence, innuendo and cynicism! While Hollywood is all too keen on undressing female actors, Bollywood, more often then not, dresses actresses with elegance and poise.

In January this year, Guru became the first Bollywood film to have a world premier overseas, in Canada, where there is a large Indian population. Abhishek Bachchan plays a villager who becomes a top industrialist. How does Hollywood differ from Bollywood? Bachchan was asked. "I think a unique aspect which might be more different to the Hollywood films is that we have a lot of song and dance, a lot of pomp and pageantry, always poetic justice," he explained. "And we do it at a hundredth the price that they do it in Hollywood."

Naturally, as India becomes wealthier and more Westernised, Bollywood is becoming a bit more like Hollywood. Large expatriate Indian populations in the UK, Canada and the US also support a move towards more edgy contemporary themes. And the local industry is far from virtuous. The Mumbai mafia has been tied up with film financing for years and Bollywood scandals put Hollywood scandals in the shade. But Indian culture, by and large, is family-friendly and deeply religious. Whether Indians are Hindu, Muslim, Sikh, or Christian, they nearly all assume that unchanging moral standards are important. So, while the films are often lushly romantic and make the most of their stars' allure, they hardly ever sink to Hollywood standards. The results speak for themselves. Analysts suggest that the Indian film industry could tap 12 per cent of the global entertainment market by 2008.

So look out Hollywood, Bollywood is dancing up a storm!

Trent Thomas studies at Monash University, in Melbourne, but he dreams of working in Mumbai. He is MercatorNet's marketing manager.