Indian Animation Industry

The Indian animation industry has come along way in the last couple of years with a market size valued at $300 million. According to a recent report by Nasscom, a trade body for Indian IT and services industry, India should easily cross $ 869 by 2010, pushing the compounded annual growth rate (CAGR) to over 25%, from 2006 to 2010. Currently the market is mainly driven by outsourced work with about 60-70% of the revenues come from the West. However, that would not be the case for long, the domestic market might soon take a bigger share in the growth.

In addition to inherent factors like creative skills, manpower availability and cost advantage, external factors like growing maturity of animation studios, increase in number of co-production ventures, development of IP, and the attractive domestic market opportunity have immensely contributed to this industry’s growth.

With over 140 million kids who are the largest consumers of the animation industry. India definitely has a potential of being one of the biggest markets. This is probably why several Bollywood big-wigs are looking at producing animated content in a big way. Yash Raj Films recently signed a deal with Walt Disney Studios to produce at least one animation film a year, starting with “Roadiside Romeo” which is being directed Jugal Hansraj. Pritush Nandy Communications has entered into a five film deal with Motion Pixel Corporation of Florida. While Percept Pictures Company (PPC) one of the important animation companies in India, has decided to invest about Rs 500 crore for animated flicks. PPC came out with Hanuman in 2005 which won the largest selling video award in the year.

The very fact that the yet-to-be released second version of Hanuman is already on demand. The return of Hanuman was recently brought by satellite TV channel for a price of Rs 8.4 crore, as opposed to ‘Jab We Met’ which was brought by a satellite channel for only Rs 5.5 crore, is an indication of the fact that the popularity of Indian animated content is growing. The Return of Hanuman is slated to release on December 2007. One more trend which is an indication of the market drivers is introduction of special effects in Hindi, regional and animated films. Animated companies have already started leveraging this fact by releasing multi-lingual content in their films. This especially should help the growing demand in non-metros.

Another important factor that could drive the Indian market for animation content is the growth of multiplexes with 3D and 4D movie halls. With hundreds of multiplexes opening up across the country, dearth of quality content originating from India is becoming a big issue. Especially in a country like India where audience gets bored of the content easily, as opposed to US or UK where they can get away by running the same animated content for years.

This problem however is not unique to India. Disney in the US had run into similar problems, and has taken steps to solve this issue by starting their own in-house production for animated content. Some Indian companies also seem to be following this model. Cybele Paradise, for instance, is in the process of shooting their own animation movies especially for their in-house consumption. This will not only bring in more intelligent content to the audience, but will also bring down the cost of productivity by almost 60-65%.