By: Sahana Sarkar
Based on a mapping of the structure and challenges of Indian animation industry, Sahana Sarkar finds out that India has become an outsourcing hub for animation films but argues that it will no longer be the same for long. An alumnus of Centre for Culture, Media & Governance, Jamia Millia Islamia, New Delhi between 2010-2012, Sarkar can be contacted at firstname.lastname@example.org
The Indian animation market was fairly static until a few years ago when in earnest in the latter half of the 90s animation studios made an appearance in the country. For a very long time animation was considered an expensive proposition.As digital technologies become more accessible and user-friendly, animation, traditionally one of the most labour and resource-intensive media practices has become a widespread mode of entertainment, education & social activism (for e.g., the film ‘Avatar’ that is a marvel of animation entertainment, symbolises in a sense a sort of social activism for environmental awareness. In the coming lines, I would like to focus on the following themes:
- The structure of animation industry in India.
- The animation segments value chain & service models.It should be borne in the mind that the Indian animation industry is highly segmented. I would elaborate upon the management practices and organizational system as well.
The Animation Industry in India is comprised of three major segments: animation entertainment, visual effects (VFX) and custom content developing, where the last segment earns the maximum share (59%). Animation entertainment is further divided into the following stages:: Intellectual Property Rights (IPR) & Content Development, pre-production, production, post-production, and marketing, distribution and exhibition. Indian players are primarily engaged in the labour-intensive production and post-production activities, as a ‘Service Provider’. IPR and Content Development entails identification of an existing IP or generation of a new idea and then asset procurement,fund scheduling, and integration of resources. Pre-production is about the preparation of the script, character design, storyboard layout & development. Production involves development of specifications regarding the character, background paint, inking and painting and visual effects. Post-production deals with final sound recording, colour editing, testing and special sound effects. Finally, Marketing, Distribution and Exhibition cater to promotion, distribution, video DVD release and cinema and TV screening.
According to Deloitte and ASSOCHAM, Animation Entertainment Industry of India is expected to witness a significant growth, both in terms of revenue and participation in the value chain. The Indian animation industry started by doing work for foreign companies and it is developing characters, lines and voices of its own. As the industry gains expertise and tries to move up the value chain, it faces a few daunting challenges, which it needs to overcome to come close to realizing its potential namely skilled manpower (in this case skilled manpower refers to people who have the knowledge & the skill to contribute to the animation sector), lack of government support, tight budgets & IP protection.
Challenges before the Indian Animation Industry
- Lack of employable resources poses a large constraint, which is primarily due to the following reasons: low awareness of animation as a career and non-existence of a standardized and quality curriculum across the handful of institutes in India.Moreover, Indian government has been providing support to the IT and IT Enabled Services industry in India, thus leading to its growth.
- Lack of government support:Indian animation players lack any such Government support either through tax rebates or grants.
In a bid to give a boost to animation, gaming and VFX (visual effects imagery), the Information and Broadcasting Ministry is involving players from the industry in a big way in evolving a policy that helps them realise their true potential. The committee they set up had been asked to explore how to promote the locally produced animation contents in foreign markets, with the possibility of grants from the Market Development Assistance (MDA) scheme of the Department of Commerce. It had also examined the need to extend the co-production treaties, so far limited only to films, to these new sectors as well.Entertainment tax exemption for children and animation feature films for 10 years, service tax exemption to studios developing original contents, rationalised customs tariff for the gaming industry, promotion of indigenous digital content education and entertainment for masses and setting up of multiple parks for the sector on the SEZ model are some of the issues the committee examined. It had also been asked to suggest guidelines for standardising and promoting higher education in animation and gaming and how to spread awareness about their potential among the people. Localisation of animation contents, specialised programming for children in Asia and specifically in India and original Indian animations acquiring equal space not only against the Indian films but also against animated global content are some other areas set for the committee to study in the terms of reference.
- Piracy of DVD-based videos is rampant in India, which eats into the revenues for the producers and distributors. Weak IP Regulation and ineffective enforcement discourage animation players in India to produce their own IP. Moreover, it also discourages International Players, who are generally very protective of their IPs, to outsource to India.
Future is Bright
The growth drivers for Indian animation industry are rapid growth in consumption of animated movies in India, proliferation of handheld devices, smart phones, internet and social media, several co-production treaties between Indian developers and producers in the West, quantum jump in the level of expertise of local artists and technicians. For instance the year 2011 upped the ante in animation for fulllength feature films. Tintin, Rango, Puss in Boots, Kung Fu Panda 2, Rio, Cars 2, Happy Feet 2, Smurfs and Gnomeo& Juliet took animation to a new level. According to BirenGhose, country head of Technicolor India, India worked on movies like Harry Potter, Pirates of the Caribbean & X-Men.Therefore we see that meeting the above challenges would bring the Indian animation to a different level.
Will it always be an Outsourcing Industry?
It is difficult to answer the question if Indian animation industry will remain an outsourcing industry.Deloitte (2012) report shows that Indian animation industry derives its revenue majorly from outsourcing. International production houses (like BBC UK, American Greetings) outsource work to Indian studios. For animation, India caters primarily to US and UK.
This mapping of the structure and challenges of Indian animation industry makes it obvious that India has become an outsourcing hub for animation films due to the following reasons:
- India has a vast base of English speaking workforce: Animation, which requires familiarity with the English language, benefits when the work is outsourced to India. This widespread working knowledge of English encourages a number of animation companies to launch various training programmes in the country and to create skilled manpower for the animation market.
- Presence of good studios: India has the second largest entertainment industry in the world, after Hollywood. A number of Indian animation companies have set up hi-tech studios (equipped with state-of-the-art hardware and software) to execute overseas projects. Animation studios in the country provide a large supply of low-cost, high-quality software engineers.
- Low cost of animation services: The main reason why foreign entertainment firms are flocking to India is the cost advantage the country offers. For instance, in the US, animators can cost about $125 per hour while in India they cost $25 per hour. Toonz Animation offers animation at 25 per cent to 40 per cent lower rates than other Asian studios and much lower than those of American studios.
Nicole Starosielski (2011) ‘Movements that are drawn: A History of Environmental animation from The Lorax to Ferngully to Avatar’ International Communication Gazette Vol. 72 No.1 pp. 145-163
 Deloitte & ASSOCHAM Animation, Broadcasting, Gaming: On the cusp of growth (2011) p.9 http://www.deloitte.com/assets/Dcom-India/Local%20Assets/Documents/Animation_and_Gaming.pdf as accessed on 24th February 2012 for the animation industry structure, pg-6
 ‘Government to Promote animation, gaming industry’ 2010 http://www.rediff.com/money/report/bud/20070115.htm as accessed on 24th February 2012 to substantiate the challenge with an example from India.
Tejaswi Mini Joseph (2011) ‘2012: India will do a lot more in animation’http://articles.timesofindia.indiatimes.com/2011-12-29/computing/30568314_1_indian-animation-and-gaming-crest-animation-rhythm-hues as accessed on 3rd April 2012
Deloitte & ASSOCHAM Animation, Broadcasting, Gaming: On the cusp of growth(2011) http://www.deloitte.com/assets/Dcom-India/Local%20Assets/Documents/Animation_and_Gaming.pdf as accessed on 24th February 2012 for the animation industry structure, p.14