By Louise Cooper BBC World Service business reporter

Love story Devdas was the most expensive Hindi film ever made

The Indian film industry is hoping a new genre of films will turn around its fortunes, after it reportedly lost half a billion dollars last year.

Hindi horror film Raaz was a big financial winner for its producers but 98% of films made last year in India flopped at the box office.

The industry can't support losses like that forever so producers are looking for the next big thing - and scary seems to sell.

Films like Raaz or Makdee and Raat which all dabble in the supernatural have been huge hits and some new films are trying to emulate that success.

Fresh appeal

Ifran Ajeeb, a film programmer at the National Museum of Photography in Bradford, England, and a Bollywood critic, said he thinks the Indian film industry is going through a transitional period.

"It tends to go through these phases every decade or so where the industry has relied on a certain storyline for such a long time and I think the audience can only take a certain amount of the same plot," he said.

Mr Ajeeb said love stories have been successful over the past decade, but now there are hints that Indian audiences are getting tired of seeing the same or similar stories over and over again.

"They really do want something else to embrace the industry by," he said.

Thrill

One of these new horror films is Saaya, a follow-up from the successful Raaz.

"These horror movies will have to have some song and dance in there" Ifran Ajeeb, Bollywood critic

It tells the story of a husband who feels the presence of his dead wife, leaving his neighbours to question his sanity.

Saaya is due for release in India on 2 May.

Its producer, Mahesh Bhatt, thinks Indian cinema goers want to be thrilled and scared.

"It seems that they want the edge-of-the-seat experience, they want excitement," he said.

"We felt that when you take issues where the fundamental beliefs are being questioned you get an exciting product, so whatever is primitive is exciting."

Unique style

Excitement is a financial winner then and in a sign that this trend is firmly established, Bollywood big wigs have got involved.

Some of the Bollywood's top actors are signed up to star in Bhoot, another upcoming horror film.

So should we expect India to produce the next international horror blockbuster?

Will it sit alongside Hitchcock's Psycho as one of the all time spine chilling greats?

Ifran Ajeeb doesn't think Hollywood should be too worried, it appears Indian horror will have a flavour all of its own.

"These horror movies will have to have some song and dance in there as well [so] you know it should be fun," he said.

"I personally will look forward to a ghost singing and dancing around trees if that's what it takes."