Why does Indian movie industry use a portmanteau as a name?
For instance, I never heard of "Hong Kong-wood".
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The name "Bollywood" is a portmanteau derived from Bombay (the former name for Mumbai) and Hollywood (in California), the center of the American film industry.
Origin and Etymology of bollywood
Bombay (Mumbai), traditional center of the Indian film industry + Hollywood
First Known Use: 1969
The term Bollywood was actually second in line after Tollywood, which is used to refer to West Bengal movies and is also a portmanteau (Tollygunge, a city in Calcutta, and Hollywood combined).
Now, the term "Tollywood", according to Wikipedia, dates back to the 1930s, back when India was still under the British rule. During this age, motion pictures first started to emerge in India. The term "tollywood" was mostly informal, only spoken in gossip. Overtime, it became an official, universally accepted term, especially after it got popularized by the Junior Statesman youth magazine.
After "Tollywood" became official, terms like "Bollywood", "Dhallywood", "Pollywood", etc. began to emerge. The "-ollywood" suffix is used to refer to film industries of different languages and countries.
That explains why you never heard of "Hong Kong-wood". It doesn't follow the "-ollywood" format.