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December - 2008 - issue > Cover Feature
Opportunities Exist; Provided, They are Tapped
A K Madhavan
Thursday, December 4, 2008
What are the five animation characters that come to the top of your mind? 99 times out of 100, those characters that pop up immediately in your imagination will be from Hollywood. The most famous and recognizable animation characters are not from India, Canada, Germany, the U.K., or Japan; they are all from Hollywood, U.S.A. This is what makes me believe that animation has been essentially driven by Hollywood.

That fact is also visible in the way our animation industry, though technically animation still has not attained industry status in India, has shaped up. Animation companies have been around for the last 6-7 years, doing work outsourced by Hollywood studios. It was in 2003 that the first long-format TV series created out of India was aired on PBS in the U.S. The 26 and a half hour long series opened up a host of opportunities for the animation business in India, while also getting nominated for the Annie’s award. With the series, India was established as a destination offering high quality animation for a competitive price. The years since have been followed by a lot of outsourcing by Hollywood studios, as also producers of TV shows in the U.S.
In addition to this, a large volume of animation work in the areas of medical, research, defence, and education have been done out of India. But at any point of time, entertainment has constituted the biggest chunk of the animation business.

Broadly, animation (in the entertainment space) can be divided into three formats: animation for TV series, animation for the DTH market, and animation for feature films, the three being successively higher up the value chain.

The types of animation that we have seen over the years, on the other hand, are as follows:
* First, there was traditional animation, which continues to be a top draw today.
* Second, claymation came into being. Claymation is a very laborious procedure, whereby characters are moulded out of clay, which are then animated.
* Around 1995, 3D animation made its mark. Since then, this type of animation has grown with a lot of speed. India, incidentally, possesses a lot of people with technical skills to produce 3D animation.
* The fourth type of animation, flash, came into being during the dot com boom, and is quite popular on the Web.

Opportunities Galore?
One of my favorite stories is that of Bata trying to sell shoes in India. When Bata sent a salesman to Chennai to sell his company’s shoes, the salesman returned to him and said that shoes would not sell in India since ‘everyone there walked around barefoot’. But when Bata sent another salesman to Chennai, he went back and said that the company would sell a lot of shoes since ‘nobody there wears shoes as yet’.

I say this in context with the animation business in India, and its contribution to India’s GDP, which is by any measure, miniscule; whereas in Japan, animation is the second largest contributor to the economy next to steel, in the U.K., it contributes 7 percent of the GDP. That the local or regional market in India is not developed yet provides for a huge opportunity for businesses to grow.

This opportunity will not be affected by the success or failure of any one film; rather, the animation arena will see much more action in the years to come, irrespective of the outcome of one-off films.

Various companies in the animation space have varied business models; some companies go for co-productions with Western studios, while some go in for solo productions.

I believe that for the current situation it makes sense for companies to focus on creating their own IPs, while producing content for the global market. Because, the local or regional market is not yet developed.

Challenges Ahead
Entertainment needs constant capital, and the same is true for animation in India, almost all of which is for entertainment. Fortunately, in the last five years, banks have been quite forthcoming in lending their support to animation businesses.

Like the software industry, animation companies too face the challenge of talent. While animation is growing at a rapid pace in India, there is no university that provides training in the field. There are, of course, various private institutes that do so, but no standardized training courses exist as yet.

The third challenge for animation companies concerns technology and partnerships. Companies need to share their knowledge of various models and whether they are successful or not with their counterparts; like PricewaterhouseCoopers, KPMG, and E&Y do in their field.

Also, animation companies need to focus on growing the domestic market. They also need to look at merchandise, licensing, publishing, and toys; basically various ways to evolve a sound revenue model.

In addition to all the above, in terms of content, we desperately need to get out of mythology. We need to create good characters in the modern context as well that the audiences can relate to, and tell good stories.

Finally, since animation has no geographic barriers, attempts must be made to dub animation series into as many languages as possible and distribute them in the Indian market.

The author is CEO, Crest Animation
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