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There
is one big challenge in animation, both for the animator as
well as for the entrepreneur, the challenge of Making the
Figures on Paper come Alive.
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Intel
Capital India Director
Dr Kumar Shiralagi
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Besides
the human resource crunch, one of the toughest issues to grapple
with for animation studios is a funding model that works.
Animation & Gaming ventures require quite some rounds
of funding before one can see the light at the end of the
tunnel and everyone involved needs good amount of conviction
for that to happen.
The
Power Panel on Financing in Animation and Gaming at NASSCOM
Animation India 2006 had 3 panelists including WayGate Capital
MD Rajesh Jog, Intel Capital India Director Dr Kumar Shiralagi
and Sony Online Entertainment VP Cindy Armstrong.
As each case is dealt with individually, the subject of financing
cannot be generalised even for a specific field. The presenters
did however have a few points and perspectives to share.
Intellectual Property with larger footprint looks attractive
Speaking about how he had yet to be convinced about the Animation
Outsourcing model, WayGate Capital's Rajesh Jog voiced his
inclination to invest in Intellectual Property where revenues
were recurring.
He said, "I still remain to be convinced about an animation
outsourcing model that works. The work for hire model may
not be as attractive to investors like me as much as the ownership
of intellectually property which offers recurring revenues,
all this as long as it is scalable and has a larger global
footprint. Animation content can be ported into so many difficult
cultures and looks promising"
Education
looks attractive too
Intel's Dr Shiralagi (Intel is a strategic Investor in Maya
Entertainment Limited as well as in Nipuna which has an animation
vertical) said,"As a strategic investor, our involvement
goes beyond the money we invest"
"MEL has a parallel education arm and that really helps
acess a talent pool as well as gets in revenue. We are big believers
in education" he added.
Gaming Gleams
Continuing Dr Shrilagi remarked,"We are now looking
at something in Gaming with an Internationally accredited institute"
Waygate's Jog quipped,"We have invested in Fantasy Labs,
a gaming company based out of Bangalore and Mumbai, the company
is working on its own IP"
Sony Online Entertainment's Cindy Armstrong gave a list of three
things that made an investor confident:-
-Addressable Market
-Quality of Management team
-Quality of founding team
Succesful exits boost confidence
All the panelists agreed that successful exits help boost VC
confidence.
Waygate's Jog commented,"There
have been very few succesful exits for VCs who have invested
in animation and entertainment at corporate equity levels. One
name that I can recollect is Indiagames whose investors Infinity
and ILFS had a succesful exit. We need more like those to get
more VCs interested"
Gap Finance
The VCs were also unanimous in their opinion that enterprises
approaching them needed to look at more innovative ways of funding
propositions. "Everybody goes to the VC first but you could
approach us for Gap financing" remarked Jog.
Making the right kind of noise
"Private equity flows into India are going to treble and
if as an industry animation and gaming can make the right kind
of noises than a sizeable amount of funding can be channelised"
concluded Jog. |
