As the saying goes ‘content is king’, the demand for hyper-personalisation of content is sky-scraping. The world has witnessed that the consumers are spoilt for choice from kid’s content to sports, mythology, spiritual and so on. The plethora of demand and choice for great content on various platforms has pushed the industry professionals further to the next level, in producing more and more quality content, to feed the hungry audience. The push for creating great content has resultantly increased the number of industry professionals, as well as the number of studios to pursue it as a career in order to settle in the animation and VFX industry.
As consumer demand is touching high it has been noticed that a lot of changes have taken place in the market:
As the rise of demand is going high, most of the content is finalised in the post-production phase with the use of VFX and animation. OTT platforms like Amazon Prime Video and Netflix have an affinity towards animated and VFX heavy content. Not only that, producers believe with the introduction of VFX and animation, the cost of production has reduced resulting in ‘quality content in quantity’ which means producers will create more quality content without hampering the number of produced content. Thus in Asia five to 10 per cent of the production cost is spent on special effects and the total value of Asian animation industry was estimated $ 52 billion in 2018 and it is growing at the rate of 23 per cent YoY as per Research&Market report. Also, the production cost per animation movie in Asia ranges anywhere between $3 million to $60 million.
With the rise of OTT and digital content, a sharp growth of increase in streaming video consumption has been noticed. Therefore the traditional form of content viewership is giving way to a sharp increase in streaming video consumption. The total value of the global animation industry was $ 259 billion in 2018 and is projected to reach $ 270 billion by 2020. Most of the segments in the industry are growing at the rate of 2 per cent YoY as per the report. Thus along with in-house work, a lot of outsourcing of work is done these days and India has played a crucial role in working on international projects. Another important reason for increasing number of studios with foreign investment is because the market size in India is huge and the cost of production is low and this results in a profitable return from the investment in the Indian market.
Thus the Indian animation industry has grown rapidly in the last 5 years. According to a recent FICCI report, the Indian animation & VFX industry is growing in excess of 20 per cent. Animation, now itself a full-fledged industry and is no longer on the sidelines of the Indian M&E industry. Therefore small time studios have grown to become large brands and new studios are debuting and lot more studios will be introduced and existing studios will be expanding in the upcoming years and this will increase in the number of employment generation.
When it comes to content, animation and VFX steals the show. From TV and OTT, every content has used less or more of VFX and animation. Considering the current market scenario where investment in animation and VFX results in the profitable return, here are the things we have analysed that studios should keep in mind before introducing themselves in their entrepreneurial journey in the industry.
Plan your expense
It is very crucial for a business to sustain and for that to plan the finance wisely is crucial. Capital is one of the basic needs of every entrepreneur for starting their business, or for their expansion. If you and your workstation are the sole and whole of your studio then you might not need any bootstrapping capital. But, if you are renting a workplace, or hiring employees then you might need money for it. The crucial part is that before every expense on business it is crucial to utilise the resource wisely. And You have to repeatedly question yourself that -What are your possible sales over the first year? What is the cost of doing business? Estimate the likely income and the likely expenses. Is it profit left over enough to make it all worthwhile? Is the money being put in equity that is a stake of the business, or is it a loan? If the latter, when will it be repaid, and on what terms. This way you can keep a track on your finance and plan your expense accordingly
Hiring skilled employees
A good team results in good business; it is always the team who leads the business to the ultimate destination. When a team is stable the workflow becomes liquid. In the rat race of business sustainability and stability of business is very crucial that can be only done through a skilled core team. The sooner an entrepreneur can create a team the sooner your business will face the pace. Also, the division of work helps to produce faster, therefore for newbies also it is crucial to set a team with skilled players.
For better understanding here is an example- You may not have all the skills needed to make short films. As an animator, you may have to team up with designer 3D generalists as well. Again, if you are making feature films, you will also need to appoint an editor, a director, a designer – and a producer to manage the process.
Research and development
Doing research is a major step for a studio entrepreneur and also for employees to land on a job in a studio. The content market is evolving rapidly many businesses are unable to sustain for a long period of time because they are unable to evolve their business as per market demand. In business what’s right today might not look right tomorrow and for that, every business must do thorough research and development on the market. It is important for all studios to research the new trends and incorporate them in their work to evolve as per the market. This is very crucial not just for businesses but also employees of studios to enhance their skill set as per the demand of the market that can only be done by keeping an eye on the market. If you have decided that you want to enter the industry, the first thing you should do is understand how it works.
Create a business strategy
A business strategy is always the key to a successful business. An entrepreneur, who is good at strategising a business plan way ahead, can obtain success in the industry very fast. Not only that a good strategy has a lot of loops for sustainability through which a business can sustain even during the recession. For eg. If a business is running low for in house domestic projects then that studio should approach for outsourcing their works by collaborating with different brands. Not only for the sustainability of business but overall a strategy is very important which includes quarterly plan, annual plan, expansion plan, acquisition plan and so on.
Apart from that opening a VFX or animation studio also requires a lot of patience because the greatest challenge of opening a studio is in itself. If one is really passionate to work as an individual or as a brand in the industry then one should take it forward with proper planning and analysis.