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Asian Animation Industry: Strategies Trends & Opportunities

Asian Animation Industry

Much of Asia's animation production since the 1960s has been tied to foreign interests attracted by stable and inexpensive labour supplies. For nearly forty years, western studios have established and maintained production facilities, first in Japan, then in South Korea and Taiwan, and now also in the Philippines, Malaysia, Singapore, Vietnam, Thailand, India, Indonesia, and China. The economics of the industry made it feasible for Asia to feed the cartoon world, to the extent that today, about 90% of all American television animation is produced in Asia. The usual procedure is for pre-production (preparing the script, storyboard, and exposure sheets) to be done in the United States or other headquarter countries, after which, the package is sent to Asia for production (drawing cels, colouring by hand, inking, painting, and camera work). The work is sent back to the U.S. or other headquarter country for post-production (film editing, colour timing, and sound). Asian animation companies bid fiercely for part of the global business, insisting that it provides employment and skills for young people, brings in needed foreign capital, and adds to the creation or enhancement of domestic animation. Offshore animation has led to the creating and nurturing of a local industry, as an infrastructure is built up, equipment is put into place, and skills are transferred.

CURRENT STATE OF INDIAN ANIMATION INDUSTRY

There is a considerable increase in the 2D and 3D animation outsourcing to India. Due to the extremely competitive climate as well as the global slow-down, some of the large studios in the US have implemented large amounts of layoffs of animators and artists. India is slowly emerging as an alternative to Korea, Philippine and Taipei for animation outsourcing. India is also emerging as a post-production hub for animation. Post production involves a lot of ink, paint and compositing and scanning work, which is the labor intensive part of the entire process of animation and requires less skill. Thus we can see that the animation industry in India is following a similar evolutionary part as the software industry. In the early part of the evolution of the India software industry, it was the low value jobs which were shifted to India. Over time it is projected that more and more high value jobs would be outsourced to India. For low value post-production works, it is easier for a studio in the US to outsource its post production work as probably nothing is going to go wrong. India has one of the lowest labor rates, which makes it an attractive destination for animation outsourcing.

KEY TRENDS

Indian animation companies are moving up the value chain to own and co-produce intellectual property rights. This is a shift from the model of outsourcing animation production from international studios. The Indian animation companies are also focusing on strategic alliances with overseas studios with the eye to establish a presence in the global animation market. Content creation in the country has peaked and big Indian studios are increasingly making their presence felt in foreign markets. Indian studios are developing rapidly and a trend being witnessed is one of modularization of animation wherein expert from multiple animation companies, come together to execute specific functions in the production value chain. Some work on the design, storyboarding, layouts etc while others focus more on other elements of the process i.e. animation, texturing, lighting etc. These were models which had been perfected previously in mature animation countries such as Korea. This model is being increasingly adopted by Indian animation studios based on the ability of the studios to be process driven enough to distribute the work in modular units without loss of time or quality.

Indian animation companies are garnering larger chunks of the animation outsourcing pie and are also moving up the value chain by co-owning IPR, co-producing animation products for television or home videos or theatrical releases. Given the large domestic demand, India is also likely to evolve into a significant animation consumption country and the demand for local animation content is rising which is exemplified by the tremendous success of the first fully locally produced movies such as Hanuman, and TV shows such as Chhota Bheem etc. Plus there is the tremendous untapped market for merchandising. Popularity of channels such as Cartoon Network, Pogo, Nick etc. has resulted in more opportunities for studios in India. Indian cities such as Mumbai, Hyderabad and Bangalore are offering a state-of-the-art mix of software skills, production and animation expertise and studio infrastructure.

The demand for Indian animation production for export comes mainly from feature film producers and distributors, broadcasting channels, game software producers and advertisement film producers. As of now, Indian animation companies are working with a number of leading foreign studios.

BUSINESS MODELS

Indian Animation studios typically have four prominent business models. They are:

Outsourced animation services
Collaborative animation services
In-house production

OUTSOURCED ANIMATION SERVICES

Most of the Indian animation studios have adopted this business model. This is a low risk low return business model, with the studios doing low value added services such as post production services. In this business model, animation studios work on a time and material basis (payment based on actual expenses) or on a fixed payment basis (fixed fee for the project). Most of the outsourced animation jobs come from studios in the US, Canada and Europe. In this business model, the outsourcing firm has control over the quality of the output and they execute the pre-production and post production part of projects. Thus the labor intensive production works are outsourced. The partnership could be between animation studios in India and abroad, Indian animation studios and foreign TV channels/film producers, Indian animation studios and advertising firms etc. We are also seeing bigger studios in India winning large scale projects and in turn outsourcing some parts of the work to the smaller studios in India to specialist animation studios. Moreover in outsourced animation services, the Intellectual property of the job rests with the outsourcing firm.

COLLABORATIVE ANIMATION SERVICES

In this business model, there is a collaborative effort involving multiple animation studios based in India and abroad. The Intellectual property rights are shared by the firms and so are the revenues arising out of the content. Here firms with different core competencies come together to leverage each other’s expertise. The partnership could be between animation studios in India and abroad or between Indian animation studios and foreign TV channels/film producers etc. These revenues could be from selling the content to channels and from royalty from the sale of animation character related products. Firms following this business model are building their capabilities towards producing in-house content.

IN-HOUSE PRODUCTION

In this business model, Indian animation studios create their own content in-house thereby owning the complete intellectual property rights to the content. This is a high risk-high return business model with the animation studio bearing the risk of the entire project. This is evident from the scale of investments required for a full length film (US $ 50-100 million). Most of the Indian players are not in a position to make such large scale investments. In India, more number of large animation studios shifting towards this business model. However no Indian studio has adopted this business model completely. This business model exists along with the previously mentioned models. More and more studios are attaching greater importance to the ownership of intellectual property rights to the content as they can not only generate revenues from content, but they can generate revenues from royalty payments from merchandising. This business model has high barriers to entry and is not easy for the small animation studios to adopt this business model. A number of Indian animation studios have adopted this business model.


  • Introduction
    • Animation in Asian Societies
    • Establishment of Local Animation Industry
      • LOCAL CONTENT PRODUCTIONS
      • SUCCESSFUL BUSINESS MODELS
    • Drivers for Success
    • Models for Animation financing in Asia
    • Copyright Chain in Asia
    • Influence of Foreign Animation Styles
      • POPULARITY OF FOREIGN ANIMATION
    • Trends in Animation Production in Asia
      • ANIMATION PRODUCTION IN CHINA
      • ANIMATION PRODUCTION IN INDIA
      • ANIMATION PRODUCTION IN SOUTH KOREA
      • ANIMATION PRODUCTION IN PHILIPPINES
      • ANIMATION PRODUCTION IN TAIWAN
      • ANIMATION PRODUCTION IN VIETNAM
    • Animation Co-Productions in Asia
      • CO-PRODUCTIONS IN JAPAN
      • CO-PRODUCTIONS IN CHINA
      • CO-PRODUCTIONS IN KOREA
      • CO-PRODUCTIONS IN INDIA
      • CO-PRODUCTIONS IN TAIWAN
      • CO-PRODUCTIONS IN PHILIPPINES
      • CO-PRODUCTIONS IN SINGAPORE
      • CO-PRODUCTIONS IN MALAYSIA
    • Collaboration among Asian and Foreign Animation Studios
      • Table ANIMATION MOVIE CO-PRODUCTIONS
    • Controversies Surrounding Foreign Animation
      • PHILIPPINES
      • SINGAPORE
      • KOREA
      • MALAYSIA
      • INDONESIA
    • Animation Studios in Asia
      • Table KEY ANIMATION STUDIOS IN ASIA
      • Table ANIMATION MOVIES PRODUCED IN ASIA
  • India
    • Current State of the Industry
      • KEY TRENDS
      • CHALLENGES
    • Business Models of Animation Studios in India
      • REVENUE MODELS
      • COST STRUCTURE
      • TOONZANIMATION INDIA'S IN-HOUSE ANIMATION PROJECT
      • HANUMAN - INDIA'S FIRST FULLY INDIGENEOUS FEATURE FILM
    • State of Animation Channels in India
      • VIWERSHIP PATTERNS OF ANIMATION CHANNELS IN INDIA
      • ADVERTISING TRENDS IN KIDS CHANNELS
      • GROWTH IN KIDS ANIMATION CONTENT
      • MERCHANDISING
      • EMERGING TRENDS
      • KEY CHALLENGES
    • Size of the Indian Animation Industry
      • Table ANIMATION CONTENT DEMAND FORECAST - TV CHANNELS IN INDIA
      • Table VALUE AND VOLUME OF ANIMATION CONTENT BEMAND BY TV CHANNELS IN INDIA
      • RISING DOMESTIC DEMAND
        • Table ANIMATION PRODUCTIONS IN INDIA
    • Chhota Bheem: India's successful local animation production
    • Statistics on Animation Studios in India
    • The Risks
    • Future Outlook
    • Strategies for Animation Studios in India
    • Animation Schools in India
      • Table ANIMATION SCHOOLS IN INDIA
    • Key Animation Studios in India
      • Table INDIA'S LEADING ANIMATION STUDIOS
  • China
    • Current State of the Industry
      • KEY TRENDS
      • CHALLENGES
      • DEMAND FOR LOCAL CONTENT
        • Table ANIMATION CONTENT DEVELOPED BY CHINESE STUDIOS
      • GOVERNMENT SUPPORT
      • MARKET OPPORTUNITY
    • Chinese Market for TV Animation
      • CHINESE TV ANIMATION VALUE CHAIN
      • KEY CHALLENGES IN THE CHINESE MARKET FOR TV ANIMATION
    • Business Models of Animation Studios in China
      • REVENUE MODELS
      • COST STRUCTURE
      • THRU THE MOEBIUS STRIP - THE FIRST CHINESE 3D ANIMATION MOVIE
    • Size of the Chinese Animation Industry
    • Statistics on Animation Studios in China
    • The Risks
      • Table LIST OF ANIMATION SCHOOLS IN CHINA
    • Future Outlook
    • Strategies for Animation Studios in China
    • Animation Studios in China
      • Table CHINA'S LEADING ANIMATION STUDIOS
      • Table TOP TEN ANIMATION STUDIOS IN CHINA
  • South Korea
    • Emergence of the Industry
    • Functioning of Korean Animation Studios
    • Changing Business Models
      • GOING BEYOND SUBCONTRACTING
      • INVESTMENTS BY INDUSTRIAL GROUPS
      • CHANGES IN INDUSTRY STRUCTURE
      • SUCCESS IN OTHER COUNTRIES
    • Current State of the Industry
      • GOVERNMENT SUPPORT
      • COLLABORATION WITH OVERSEAS PARTNERS
      • KEY TRENDS
      • LOCAL CONTENT
        • Table IN-HOUSE ANIMATION CONTENT DEVELOPED BY KOREAN STUDIOS
    • Challenges
    • Strategies for Korean Animation Studios
      • OVERSEAS MARKETING
    • Market Opportunity
      • SIZE OF THE KOREAN ANIMATION INDUSTRY
    • Statistics on Animation Studios in Korea
    • Future Outlook
    • Animation Schools in Korea
      • Table ANIMATION SCHOOLS IN KOREA
    • Animation Studios in Korea
      • Table KOREA'S LEADING ANIMATION STUDIOS
  • Philippines
    • Current State of the Industry
      • KEY TRENDS
      • COMPETITION
      • INDUSTRY CAPACITY
      • BRAND BUILDING
      • GOVERNMENT SUPPORT
      • DEMAND FOR LOCAL CONTENT
      • FUNDING
    • Animation Outsourcing in Philippines
    • Animated Feature films in Philippines
    • Industry Recovery
    • Industry Advantages
    • Challenges
    • Animation Education and Training in Philippines
      • Table LEADING ANIMATION TRAINING SCHOOLS IN PHILIPPINES
    • Size of the Philippine Animation Industry
    • Statistics on Animation Studios in Philippines
    • Strategies for Philippine Animation Studios
    • Future Outlook
    • Animation Studios in Philippines
      • Table LEADING ANIMATION STUDIOS IN PHILIPPINES
  • Taiwan
    • Past the Turbulent Times
    • Current State of the Industry
      • KEY TRENDS
      • LOCAL CONTENT
      • COMPETITION
      • GOVERNMENT SUPPORT
      • COMPETITIVE ADVANTAGES
    • Challenges
    • Threats to Taiwan Animation Studios
      • INTERNAL THREATS
      • EXTERNAL THREATS
    • Animation Schools in Taiwan
      • Table ANIMATION SCHOOLS IN TAIWAN
    • Taiwan's first 3D Animated Feature Film
    • Statistics on Animation Studios in Taiwan
    • Strategies for Animation Studios in Taiwan
    • Future Outlook
    • Animation Studios in Taiwan
      • Table LEADING ANIMATION STUDIOS IN TAIWAN
    • Key Animation Studios in Taiwan
  • Vietnam
    • Early Foreign Entrants into Vietnam
    • Key Trends
      • CAPABILITIES OF VIETNAMESE ANIMATORS
    • Vietnam's 3D Animated Feature Film
    • Local animation productions in Vietnam
      • Table ORIGINAL ANIMATION CONTENT CREATED IN VIETNAM
    • Challenges
    • Future Trends
    • Animation Studios in Vietnam
      • Table LEADING ANIMATION STUDIOS IN VIETNAM
    • Statistics on Animation Studios in Vietnam
    • Strategies for Animation Studios in Vietnam
    • Future Outlook
  • Japan
    • Key Trends
      • MARKET OVERVIEW
      • COLLABORATION BETWEEN JAPANESE AND OVERSEAS STUDIOS
      • OUTSOURCING TO OTHER COUNTRIES
    • Successful Business Models
    • Anime Exports
      • OVERSEAS INFLUENCE OF ANIME
    • Globally Successful Japanese Animes
      • THE POKEMON PHENOMENON
    • Japanese Anime Production Models
      • PROMINENCE OF 2D
      • RETAS - SOFTWARE FOR ANIME PRODUCTION
      • MANGA STUDIO - SOFTWARE FOR MANGA PRODUCTION
    • Challenges
    • Future Trends
    • Statistics on Animation Studios in Japan
    • Strategies for Japanese Animation Studios
    • Animation Studios in Japan
      • Table LEADING ANIMATION STUDIOS IN JAPAN
  • Thailand
    • Key Trends
      • LOCAL CONTENT
        • Table ORIGINAL ANIMATION CONTENT CREATED IN THAILAND
    • Thailand's first 3D Animated Feature Film
    • Local animation productions in Thailand
    • Government Support
    • Industry Drivers
    • Challenges
    • Industry Opportunities
    • Strategies for Animation Studios in Thailand
    • Animation Studios in Thailand
      • Table LEADING ANIMATION STUDIOS IN THAILAND
    • Statistics on Animation Studios in Thailand
  • Singapore
    • Table SINGAPORE'S HOMEGROWN ANIMATION CONTENT
    • Industry Demand Triggers
    • Local animation productions in Singapore
    • Singapore Government Initiatives
    • Industry Drivers
    • Challenges
    • Strategies for Animation Studios in Singapore
    • Statistics on Animation Studios in Singapore
    • Animation Studios in Singapore
      • Table SINGAPORE'S LEADING ANIMATION STUDIOS
    • Animation Schools in Singapore
      • Table ANIMATION SCHOOLS IN SINGAPORE
  • Malaysia
    • Table MALAYSIA'S HOME GROWN ANIMATION CONTENT
    • Government Support
    • Industry Drivers
    • Challenges
    • Industry Opportunities
    • Strategies for Animation Studios in Malaysia
    • Malaysia's first 3D Animated Feature film
    • Statistics on Animation Studios in Malaysia
    • Animation Studios in Malaysia
      • Table MALAYSIA'S LEADING ANIMATION STUDIOS
  • Indonesia
    • Government Support
    • Indonesia's first 3D animated feature film
    • Challenges
      • Table INDONESIA'S HOME GROWN ANIMATION CONTENT
    • Statistics on Animation Studios in Indonesia
    • Animation Studios in Indonesia
      • Table INDONESIA'S LEADING ANIMATION STUDIOS
  • Russia
    • Animation Film market in Russia
    • Globally successful Russian animations
      • Table KEY RUSSIAN ANIMATION PRODUCTIONS
      • Table CHILDREN'S TV CHANNELS IN RUSSIA
    • Industry Drivers
    • Challenges
    • Industry Opportunities
    • Strategies for Animation Studios in Russia
    • Government support and Animation Funding in Russia
    • Animation Studios in Russia
      • Table ANIMATION STUDIOS IN RUSSIA
    • Value of Animation Industry in Russia
    • Size of Animation Industry in Russia
    • Statistics on Animation Studios in Russia
  • Israel
    • Drivers
    • Israel's first animated feature film
    • Challenges
    • Statistics on Animation Studios in Israel
    • Animation Studios in Israel
      • Table ISRAEL'S LEADING ANIMATION STUDIOS
  • Pakistan
    • Current State of the Industry
      • KEY TRENDS
    • Industry Drivers
    • Challenges
    • The Risks
    • Industry Opportunities
    • Strategies for Animation Industry in Pakistan
    • Future Trends
    • Animation Studios in Pakistan
      • Table PAKISTAN'S LEADING ANIMATION STUDIOS
    • Statistics on Animation Studios in Pakistan
  • Bangladesh
    • Current State of the Industry
      • KEY TRENDS
    • Bangladesh's globally successful animated short film
    • Industry Drivers
    • Challenges
    • The Risks
    • Industry Opportunities
    • Strategies for Animation Industry in Bangladesh
    • Future Trends
    • Animation Studios in Bangladesh
      • Table BANGLADESH'S LEADING ANIMATION STUDIOS

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