Bollywood has lost more than $30m since the start of this year, according to a survey.

The ET Intelligence Group together with the trade magazine Film Information carried out the survey to quantify the problems being faced by the world's biggest film industry.

It found that both producers and distributors have been hit by the ongoing economic downturn, and that producers have faced falling profits from the sale of music, satellite and overseas rights.

The industry has also announced it is to set up a fund to help fight piracy - a costly problem for Indian film makers, with pirated copies now available within weeks of the release of a new film.

Big names

Komal Nahta, editor of trade magazine Film Information based in Mumbai, told the BBC's World Business Report that Bollywood's problems started two years ago, during a boom period for the industry.

We have launched a movement and have decided to form our own anti-piracy squads

Yash Chopra, Indian Chambers of Commerce

Film companies hoped to maximise the benefits of this popularity by producing films featuring big name stars, Mr Nahta said. But content suffered as a result.

"They just put creativity on the back burner, they did not bother about the content of the film, they just pieced together projects... and threw them in the market," said Mr Nahta.

"Obviously projects don't run on star names, they run on content."

Mr Nahta believes the financial problems now facing the industry will have positive long-term consequences as film makers realise they need to produce higher quality films in order to be successful.

"All these films which were launched two years... back, they have released this year and they have bombed," he added.

Anti-piracy squads

Piracy is a further threat to the Indian film industry.

Yash Chopra, chairman of the entertainment committee of the Federation of Indian Chambers of Commerce has described this threat as 'scary' and the industry itself has now decided to take action.

Each person working in the industry, at all levels, will donate 1% of their earnings to an anti-piracy fund and the government has promised to make this mandatory, Mr Chopra said.

"We have launched a movement and have decided to form our own anti-piracy squads as the government has said that it does not have a force to fight piracy," he said.