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As
we get set for 2009, here's casting a glance at trends that
will define the future of the Indian animation, vfx and gaming
industry.
1.
IP Gold Rush
IP creation in animation is both a buzzword and a reality.
Riding on a wave of augmented foreign and domestic investments
and an expectation of expanding revenue streams, Indian studios
joined the fray and announced a record number of close to
60 feature films, besides a plethora of TV series, characters
and comics.
Post
Hanuman, the Indian studio discovered that, with IP, you could eat the cake and
keep it too! IP creation included all that you did for an outsourcing job (and
much more!), but also presented an opportunity for exploitation of multiple revenue
streams: home video, licensing, merchandising, the works. As a result, studios,
production houses and individuals - all and sundry - started working on public
domain and original IPs, most of which are slated for release in the next one
to three years. This sudden IP gold
rush has lead to a slight reduction in outsourcing revenues, which are expected
to be offset by revenues generated by producers who can play the game well. What
is crucial here is getting animation accepted by the audience and exploiting a
360 degree marketing stream, where the theatrical release is able to create enough
interest to sustain other ventures successfully. With IP development and ownership
patterns still evolving, the future of Indian animation lies in evolving a model
which will be the right blend of animation process outsourcing and original content
creation. A string of recent animation
releases not making an impact at the box office, has dampened industry mood. The
industry is now faced with a strange conundrum, how do you achieve the golden
middle between limited budget, interesting content and quality animation, and
still manage to sell the final product to the Indian masses, who, till date, seem
reluctant to accept animation films? Yet,
the Indian entrepreneur and creator have reasons to be hopeful. Domestic players’
expanding global footprint, a number of recent co-production deals, increasing
collaboration between training institutes and studios, and global recognition
of content developed in India portend good times to come. The
industry needs to move ahead in creative and artistic skills and purvey quality
content, besides forging partnerships and venturing into untapped markets and
formats. 2.
Live action - Animation
In
the past couple of years, a number of mainstream movies like Partner, Cash, Thoda
Pyar Thoda Magic, Ta Ra Rum Pum, Aap ka Suroor, My Friend Ganesha, Hari Puttar
and Taare Zameen Par used animation to various ends: to accentuate the story,
create audience interest and give form to vivid imaginations. All this seems to
have convinced live-action filmmakers about the efficacy of animation as a medium
of storytelling. Next year we see this live-action and animation concept being
taken to the next level with Eros and Big Screen Entertainment’s Toonpur
Ka Superhero, which has the animation sensibilities and strength, with Kireet
Khurana’s direction and 2nz’ and MEL’s involvement in the project. 3.
Studios-Institutes-Studios
The
trend of studios opening up training institutes continued to be in vogue in 2008,
with DQE, Tiger Bells, Design Studio 6 and Sanra Software setting up training
arms, thus making it easier for them to recruit people and serve the industry
demand as well. Studios with training
arms enjoy the privilege of training students according to their requirements.
Studio-wallahs opine that a number of students churned out of institutes are not
production-ready, thus forcing them to spend critical resources on on-job training.
A majority of students belonging to the studio-institute model are generally production-ready,
as they receive hands-on experience. A
reversal of this trend is also true: Arena, Frameboxx, ANTS, Picasso, all education
brands, ventured into production for training and commercial purposes. 4.
Cash Flow
The
animation and gaming sectors have attracted a lot of investor attention with venture
capitalists (VC) making big-ticket investments in the past couple of years. What
attracted VCs to the animation IP business was the inherent demand for local content
in the Indian market as well as the 360 degree revenue opportunity in animated
IP created for global audiences. In
one of the largest media and entertainment foreign investments into India, Walt
Disney increased its stake in UTV by 32.1%, while DQE raised USD56 million through
its listing on AIM, London Stock Exchange. Indian
studios’ global aspirations were given a push by Reliance ADAG and Steven
Spielberg planning a Los Angeles studio under a UDS1.5-billion project that will
make films for global audiences. In 2007, Prime Focus acquired Post Logic Studios
and Frantic Films VFX, investing over Rs1.7 billion; Pyramid Saimira acquired
UK-based Aurona Technologies; 7Seas and FX Labs acquired Neodelight and Knibble.com,
respectively. India witnessed consolidation
at a domestic level, with firms acquiring startups in order to enter new segments,
expand existing revenue models and scale up operations. ACK Media acquired Amar
Chitra Katha, Tinkle, Quietmen Studios and Karadi Tales while UTV acquired an
80% stake in True Games Interactive. Various
companies diversified into animation, for eg, Vrisa Creations, a wing of Sesha
Sai Infraprojects acquired Escotoonz Animation Studio. 5.
Human Resource Correction
According
to a 2008 World Trade Centre report, there are about 300 animation companies employing
12,000 people, supplemented by 3,000 freelancers. With
a part of their workforce reallocated to IP, and given the declining revenues
(due to a fall in outsourcing projects), studios are forced to retrench well-paid
employees. This state-of-affairs is a direct result of the inflated salaries being
offered in the past two years. However, the job market is still vibrant with recruitments
for junior level animators going strong. Also
responsible for this are the poaching and the hire-and-fire policies adopted by
a few studios. Today, salaries are falling across the board, with animators more
than eager to hold on to their current jobs. In
absence of a regulatory framework, fly-by-night institutes are producing under-trained
students. People are joining institutes by the hundreds, producing supply in excess
of current demand. The market is currently witnessing a correction. 6.
Casual Gaming - In Vogue
Casual
gaming is attracting eyeballs in the Indian market as portals of all hues, especially
social networking sites (SNS) are pushing this gaming vertical. Though,
SNS are primarily used as a communication tools, users are looking for more activities
and utility during their social web experience, thereby spending more time with
gaming applications. Case in point are websites like Ibibo, Facebook and Orkut
that are sourcing games and applications from various vendors. As
opposed to the international casual gaming market, which is primarily focused
on paid downloads and subscriptions, the Indian market has free games, with revenues
coming in from advergaming, on-site banners and in-game ads. More
than 30 online gaming portals are expected to be launched in the near future.
Since online casual gaming occupies very little of the Indian gaming pie, that
leaves a lot of ground to be covered. Major
players in the market are Zapak, Onlinerealgames, Games2win, Neodelight, Kreeda,
Indiagames, Knibble, etc. Leaders from
other industries are entering this sector too, for instance, Network18's in.com.
What remains to be seen is how many online gaming portals will be able to crack
the market. Key strategic alliances
in gaming segment include Zapak's Chinese and Russian collaborations, FXLabs's
acquisition of Knibble.com and partnering with Indyarocks to a develop casual
gaming community, 7Seas' s acquisition of neodelight.com and True Games addition
to the UTV conglomerate.
7.
Revenues - The L&M Way
A natural extension of the IP bandwagon, licensing and merchandising
(L&M) in India is gearing up with a number of revenue
generation models being used by filmmakers. Every animation
movie released recently including Bal Ganesh, Ghatothkach,
Dashavatar and Roadside Romeo among have had their
own shot at the L&M stream. Hanuman was the first animated
flick that made the business more lucrative while its sequel
Hanuman Returns is regarded as an exciting case study of an
Indian animated IP L&M.
Recent developments in the
sector include Roadside Romeo’s merchandise; Popular Prakashan Wall-E titles;
Kreeda Games-NDTV Imagine licensing deal, RZ2 bagging game rights for Pala Flicks'
Earthlings; Hit Entertainment-Turner strategic licensing agreement for India and
Jump Games bagging mobile gaming rights for football club Manchester United. 8.
VFX Galore
As
technology evolves, so does its application in Indian cinema. Visual effects (vfx)
in movies serve a dual purpose: breathing life into inanimate objects and, most
importantly, cost effectiveness (complicated and expensive shots are now programmed
in front of chroma screens).
This year saw vfx loaded-Bollywood
movies hitting the silver screen, namely Jodhaa Akbar,
Thoda Pyar Thoda Magic, Tashan to name a few. But the
vfx integration didn't stop here. Directors adapted high-end
vfx, weaving complete stories in computer generated images.
Prime Focus worked wonders with Harry Baweja’s Love
Story 2050 in terms of loading the movie with international
standard vfx. Unfortunately, the movie didn’t do well
at the box office, the reason being poor storyline and screenplay.
A few months later, Drona created high hopes, but also failed
in bringing audiences to the theatres. Vfx is also being extensively
equity in the television and advertising industries.
Seamless
integration of visual effects with the storyline, and making it exciting for audiences
should break the jinx.
That was about Bollywood, but
Indian studios are also making their presence felt in Hollywood.
Rhythm & Hues India worked for The Golden Compass
which won the oscar for Special Effects. Imageworks and Anibrain
have done lots of good work for international productions.
9.
Technology
Pipelines
to create CGI features are being formed in Indian studios. Rendering, optimisation,
efficiency, scalability, multi-locational operations, maximum creative control
till the very end of the process, motion capture, asset management are all interesting
challenges to solve and are being addressed by the studios. Adoption
of Pixar’s Renderman has been a key development in the technology sector,
with companies like Tata VCL, Satyam-Nipuna, Krayon Pictures adopting the software. Indian
studios developing proprietary tools and plug-ins is an interesting development
which has taken seed and will sprout in a big way in the coming years. Studios
have now realised that technology investment is not about throwing money at a
problem, it’s more about a well researched and carefully engineered approach.
Animation IT solutions companies like DUX Soft have entered the market providing
very niche, focused technical solutions for studios.
Outlook
for 2009
One expects
to see quite an increase in mergers & acquisition in 2009. Studios that are
experimenting with business models will redefine their approach and consolidate
their niche positioning. Salary scales will see further correction, poaching will
lessen and studios working on features and original IP will create studio-artist
bonding like never before. We will witness the emergence of freelance culture.
On the education side, curricula will see
improvement; with an increased focus on fundamentals. Even more degree courses
will be introduced. The kids'
content market, which is still quite untapped, will receive attention from animation
studios, which will discover new business models to address this opportunity. In
gaming, mobile games will lead the pack with over close to a 70% share, driven
by growth in the high-end segment of mobile users. Casual online gaming is also
expected to see growth, especially through the SNS route, even international companies
target the Indian market. Console and PC gaming will be driven by falling cost
of console and gaming titles. The
trend of international studios setting up branches will see an increase, and India
will emerge as the number one destination for international studios to set up
shop in. VFX will be more high-end
and quantum of international VFX work by Indian studios will see an increase. money.sharma@animationxpress.com
mrigank.dhaniwala@animationxpress.com | 
