PAGE ONE DOW JONES REPRINTS SMALL WORLDDisney Rewrites ScriptTo Win Fans in India China, Latin America Are Also in Turnaround A Princess in Mumbai By MERISSA MARRJune 11, 2007PageA1 MUMBAI, India -- On a dusty movie lot known as Film City here, a soft-spoken director counsels two actors on a love scene for the latest movie from Yash Raj Films. In typical Bollywood style, the closest the on-screen lovers get to intimacy is a longing gaze and a brush of the hand. Enter Walt Disney Co., lured by Yash Rajs tradition of family-friendly entertainment. Disney has struggled to make big money in India with its classic American fare. Now it has persuaded Yash Raj to make Disney-branded animated films, with the voices of Bollywood stars. See a stage tour promotion in India for Disneys Power Rangers show, and the kids who dig it. The joint effort, to be announced tomorrow, is part of the U.S. entertainment icons strategy to remake itself in high-growth foreign markets such as India. In many cases, that means discarding Disneys historic obsession with going it alone -- and instead joining with local experts to produce culturally customized fare. In China, for instance, Disney is teaming up with the state-run China Film Group to release The Secret of the Magic Gourd, a movie about a talking vegetable that grants wishes. In India, it also is tapping local filmmakers to make a Hindi feature film of its TV hit High School Musical, which may be set against a backdrop of cricket rather than the originals basketball. When Robert Iger became Disneys chief executive in 2005, he said publicly he wanted half of Disneys profit to come from overseas within five years. Only a quarter of the companys revenue last year came from overseas, however, and Mr. Iger says he still likes his goal but it could be difficult to reach. Instead, he says, the company is planting seeds today for growth tomorrow. For the better part of a decade, Disney has made a priority of building its foreign business in television, movies, retail and theme parks -- a task initially assigned to Mr. Iger himself, when he was made head of Disneys international operations. But it turned out to be a bigger job than anyone expected. Mr. Iger says of those initial hopes We were heady and those were heady days. In reality, Disney was years away from having a global business that rivaled the domestic business. Disneys traditional approach was largely to force-feed its U.S. products from its Burbank, Calif., headquarters. The company ultimately concluded the cookie-cutter approach wouldnt work, and now it is going country by country, with a particular focus on five hot markets India, China, Russia, Latin America and South Korea. Were building Disney from scratch, in countries such as India, said Mr. Iger, citing the companys founder and namesake Just as Walt did in the U.S. over 50 years ago. NEW KINGDOM Whats Changed Disney is focusing on a different approach as it seeks to establish itself in India developing local shows and products, rather than relying on U.S. franchises.Market Potential Indias population under age 14 is bigger than the entire U.S. population, and household incomes are rising fast.Profit Centers To boost growth overseas, Disney has targeted five hot markets India, China, Russia, Latin America and South Korea. The company has given more power to local managers and is tailoring its strategies for the local markets. In China, for instance, where state regulation of television and movies is aggressive, Disney is leading its charge in retail, selling its plush toys and Mickey Mouse clothing to consumers on a nationwide buying binge. In Latin America, where Disney is well-known but historically considered an elite brand, the company is attempting to move into the broader mass market. Disneys new approach follows the route of other U.S. institutions efforts at foreign acceptance. Yum Brands Inc.s KFC menus are tweaked country by country, for instance, to include rice