The Indian animation industry is growing rapidly, with the market estimated to be worth USD 460 million in 2008 and expected to reach USD 1,192 million by 2012. India is becoming a global outsourcing hub for animation production services due to lower costs. However, high setup costs, lack of skilled talent, and intellectual property protection are challenges. Growth is driven by increasing domestic demand, education/training programs, and character licensing opportunities.

1. Animation Industry ‐
Animation Industry India
May 2009

2. Executive Summary
 Market estimated worth USD 460 mn in 2008; Expected to reach USD 1,192 mn by 2012
 Annual growth rate of 27% from 2008‐12
Market
 India is becoming a global outsourcing hub providing animation production services
 About 300,000 students undergoing training in animation technology across India
 Drivers:  Challenges:
Drivers & – Increasing domestic demand for animation – High set up and production cost
– India emerging as animation outsourcing – Manpower shortage
Challenges
hub – Protection of Intellectual property
– Increase in institutions providing
animation education
– IIncrease in character licensing business
i h t li i b i
 Increase in budgets and realizations for animation movies
Future Trends  Use of animated content across sectors
 Indian animation movies are gaining international appeal especially the mythological characters
Indian animation movies are gaining international appeal especially the mythological characters
 Majority of the revenues for animation companies in India are from outsourced projects
 Indian animation companies are moving up the value chain by developing original content
Competition
 Some of the prominent animation studios in India are Big Animation, Crest Communications, Maya
Some of the prominent animation studios in India are Big Animation, Crest Communications, Maya
Entertainment and UTV Toonz
ANIMATION INDUSTRY – INDIA.PPT 2

3. •Market Overview
•Drivers & Challenges
Drivers & Challenges
•Future Trends
•Competition
•Key Developments
ANIMATION INDUSTRY – INDIA.PPT 3

4. India is becoming a hub for outsourced animation production
services as well as developing a robust domestic market
Overview Market size & growth
• Indian animation market is estimated to be USD 460 USD mn
mn in 2008 and is expected to grow at an annual rate 1,500
of 27% till 2012
f 1,197
+27%
• The sector is booming with overseas entertainment 1,000 942
giants like Walt Disney, Imax and Sony outsourcing 742
584
cartoon characters and special effects to India 460
500
• Future outlook for animation sector is bright as
Indian mythological characters gain international
0
appeal
2008 2009 2010 2011 2012
Animation revenues split ‐ India Market segments & share
Domestic services 2008 41% 26% 22% 11% 460
30%
USD mn
2012 33% 27% 23% 17% 1,195
70% Custom content development
Outsourced services Animation entertainment CAGR
40%
Multimedia/ web design
M lti di / b d i
Education
ANIMATION INDUSTRY – INDIA.PPT 4

5. Majority of the animation work in India is centered around the
production stages of the entire lifecycle of a film
Development Pre‐ production Production Post‐production Distribution
• Identifying • Preparation of • Development of • Final sound • Promotion,
existing IP or script specifications recording distribution
new idea • Character design regarding the • Color editing • Video/DVD
generation • Store boarding character • Testing release
• Asset • Layout • Background • Special sound • Cinema and TV
procurement development paint effects screening
• Funding • Inking and
• Integration of
g p
paintingg
resources • Visual effects
• Majority of animation studios in India are involved in doing pre‐production and post‐production work for foreign
animation studios
i ti t di
• Many domestic studios have established in‐house production
 Big Entertainment does complete production work for both domestic and international players
• Domestic animation studios are now focussing on creating their own Intellectual Property Rights (Hanuman,
Ganesha) which would enable them to increase their revenues through character licensing and merchandising
ANIMATION INDUSTRY – INDIA.PPT 5

6. •Market Overview
•Drivers & Challenges
Drivers & Challenges
•Future Trends
•Competition
•Key Developments
ANIMATION INDUSTRY – INDIA.PPT 6

7. Drivers & Challenges
Challenges
Drivers High set up production cost
Increasing domestic demand for
animation Manpower shortage
India‐ animation outsourcing hub Protection of intellectual property
Increase in institutions providing
animation education
Increase in character licensing
business
ANIMATION INDUSTRY – INDIA.PPT 7

8. Large amount of mythological content aiding growth of domestic
animated film production
Increasing domestic demand for animation Impact
• India is the second largest entertainment industry in the world, after Hollywood
• Animation studios in India are creating content for domestic market also and not dependent
merely on the outsourced work
• A long standing tradition and availability of mythological content is a huge source for idea and
story themes for animated films
 Success of animation films like 'Hanuman' ,'My Friend Ganesha' and extensive use of animation in recent
Bollywood movies such as Krrish and Dhoom 2 is part of the changing landscape
Bollywood movies such as Krrish and Dhoom 2 is part of the changing landscape
• A number of animation studios have set up hi‐tech studios equipped with state‐of‐the‐art
hardware and software to execute domestic projects
Number of domestic animated movies in 2008 Animation studios and employees in India (2007)
100 85 Title Number in India
50 Animation studios 300
28
Employees
E l 12,000
12 000
0 Freelancers 3,000
No of movies No of movies in stages
announced of production
ANIMATION INDUSTRY – INDIA.PPT 8

9. Significant lower production costs compared to other countries
is driving outsourced/offshore work to India
India emerging as animation outsourcing hub Impact
• India has a large number of qualified and employable professionals who are proficient in English
language
• About 300 animation studio in India are constantly improving on the skill set required for doing
outsourced animation work
• Cost advantage is also a major factor for global entertainment firms coming to India. Animators
can cost about USD 125 an hour in US against USD 25 an hour in India
• I iti ll
Initially outsourcing work involved low‐end bulk work, but Indian animation companies have
t i ki l dl d b lk k b t I di i ti i h
worked their way up the ladder and are now working on high‐end animation
Cost for producing 30 minutes 3D
Animation Film Cost (2008) Animation program (2006)
0 50 100 150 200
Country Animation cost (USD)
USD mn
USA & Canada 250,000 ‐ 400,000
USA 100 175
Korea & Taiwan
Korea & Taiwan 120,000
120,000 ‐ 150,000
Philippines 90,000 ‐ 100,000
India 15 25 Lower range
Upper range India 60,000
ANIMATION INDUSTRY – INDIA.PPT 9

10. Animation education and training business benefiting with
growing demand for skilled professionals
Increasing in institutions providing animation education Impact
• Animation education has improved in India with many institutes teaching high‐end animation
techniques
• Animation education and training market expected to grow at the annual rate of 40% from
2008‐12
• About 300,000 students are undergoing animation training in animation areas like film design,
game design, visual effects, web animation, 2D, 3D, illustration and special effects
Animation School Geographical presence Animation Areas
Arena Animation 80 centres across in India Animation, Visual Effects, Gaming
Maya Academy of Advanced Cinematics (MAAC) 23 centres across in India 2D, 3D, Visual Effects
International College of Animation Arts and Present in Mumbai,
2 D, 3D
Technology (ICAAT) Kolkata, Hyderabad, Delhi
Present in Mumbai,
Toonskool 2 D, 3D
Mangalore and Bangalore
Industrial Design Centre, IIT Bombay Present in Mumbai Animation and Game Design
National Institute of Design Present in Ahmedabad Animation Film Design
Takshaa Present in Bangalore 2D, 3D, Illustration
Anitoons Present in Delhi 3D, and Special Effects
Note: This list is not exhaustive
ANIMATION INDUSTRY – INDIA.PPT 10

11. Supplemental revenue from animation and character licensing is
also growing and becoming more common
Increasing character licensing business in India Impact
• Merchandise‐licensing business in India has been growing at more than 50% in the last three
year and total character licensing sales are estimated at USD 100 mn in 2009
• The Generation‐next kids who have been given choice with countless number of TV channels,
access to internet and mobiles are being targeted by cartoon developers through brand
licensing and collaborations
Domestic player
Domestic player Details
• Sold Indian satellite TV rights for Little Krishna, a 13‐episode animation film series to leading children's channel
Nickelodeon, for an undisclosed sum
Big Animation • Bought the rights to develop an animated television series on content from the Indian publication Chandamama,
which is owned by Geodesic
 25 episodes featuring popular characters and stories of Chandamama will be developed and ready in 2‐3 years
• Recently made a deal with License India, a licensing solution provider to market their famous characters to be used in
Diamond comics
animation films marketing campaigns and merchandising in children's properties – clothes, toys, stationary, etc.
Foreign player Details
Disney Consumer
• It occupies the foremost position in India, with Mickey and Minnie alone generating 43% of its revenue
Products
• A merchandise licensing firm of Hearst Corporation, that owns the characters like Flash Gordon, Popeye and Betty
King Features Poop has entered India
Syndicate
S di t • It is in talks with Indian corporates for licensing deals in food and beverages, kids apparel and footwear, stationery and
lk h d f l d l f d db kd l df d
toys, home décor and furnishings, and the wireless/mobile sectors
ANIMATION INDUSTRY – INDIA.PPT 11

12. High initial investment, shortage of talent, and concerns about IP
protection are key challenges
High set up and production cost Impact
• Animation movies require large investments for producing, which is the main reason why many
producers in India are not coming forward to make animation movies
• It cost between USD 3‐5 mn to set up a mid‐sized studio in India
• The budgets for animation movies in India would be ranging from 15‐ 25 mn USD which is very
high when compared to normal Bollywood movies
Manpower shortage Impact
• The growth in Indian animation industry is hindered by lack of skilled manpower, mainly due to
lack of facilities and preference for traditional career options
y , p g
• Only about 10,000 professionals are working in this techno creative animation field
• As the demand for animated content increase, lack of professionals with desired skills sets will
hinder the expansion plans of animation studios
Protection of intellectual property
Protection of intellectual property Impact
• Protection of their intellectual property has always been a concern for outsourcers to India
• India needs to strengthen its IP policy and ensure that companies operating in the outsourcing
sphere take stringent steps to take care of clients’ IP rights
ANIMATION INDUSTRY – INDIA.PPT 12

13. •Market Overview
•Drivers & Challenges
Drivers & Challenges
•Future Trends
•Competition
•Key Developments
ANIMATION INDUSTRY – INDIA.PPT 13

14. Investments and realizations in animated movies expected to
increase while applications will be seen in other sectors
Increase in budgets and realizations for animation movies
• Animation sector is poised to grow at a CAGR of 27% in India during 2008 ‐ 12
• With the growth of this industry, the production budgets and the average realizations for an Budgets &
animation movie are expected to increase over this period realizations are
Budget (USD mn) Realization (USD mn) bound to
increase in
future
2008 2.0 2.5 2008 7.5
2012 5.0 7.5 2012 12.5
Lower range
Upper range
Upper range
Use of animated content across sectors
• Animated strips are being used to convey a medical related issue to the layman or to
disseminate important health issues to a large segment of people
disseminate important health issues to a large segment of people
Increasing
• Ants (Animation Training School) is in talks with the traffic department and automobile vendors application of
to prepare animation strips, informing a new driver of the various rules to be followed and animation in
offering driving tips other sectors
g
• Increasing use of animated content will be witnessed in advertisements on internet and mobile
in future
ANIMATION INDUSTRY – INDIA.PPT 14

15. Indian animation movies are gaining international appeal
especially for mythologies creating a new revenue stream
International releases changes the split of revenues
• Indian animation movies are gaining international appeal especially the mythological characters
which brings a change in the split of revenues during the period 2008 ‐ 12
International
International
• Indian box office share of revenues will be divided with revenues coming from foreign
releases to get
consumption
foreign box
Revenue split: 2008 ‐ 2012 office revenues
2008 65% 15% 0% 15% 5%
2012 45% 20% 20% 10% 5%
India box office
New
Satellite TV rights
revenue
Foreign Consumption stream
Merchandising
Home video
ANIMATION INDUSTRY – INDIA.PPT 15

16. •Market Overview
•Drivers & Challenges
Drivers & Challenges
•Future Trends
•Competition
•Key Developments
ANIMATION INDUSTRY – INDIA.PPT 16

17. Major players (1/3)
Company Overview Work portfolio
• “Veneta Cucine”, an Ad‐Film done by the BIG Animation team won the
• Based in Pune
Big Animation Best Animated Ad‐Film of the year at FICCI Frames 2006
• Owned by Reliance Anil Dhirubhai
y
• Littl K i h ’
Little Krishna’, another superior delivery from BIG Animation, won the
th i d li f BIG A i ti th
Ambani Group
FICCI Best Indian Animated Content in 2007
• Majorly work for American Studios
Crest • Won an Emmy for animation production work done for the animated
Communications • 3D animation company based in series “Jakers: The Adventures of Piggley‐Winks in 2002
Mumbai • Working on three features for Lions Gate Family Entertainment
• Expected to produce and release “Sylvester and the Magic Pebble”
based on the story by William Steig the creator of ”Shrek”
• Warner Brothers’ Histeria
• 2D animation studio based in
Heart Entertainment • Tommy Nelson’s Crippled Lamb and Little Dogs on the Prairie
Hyderabad
• Done work for Walt Disney
• Working on an animated film series Lord Krishna and the crime caper
Bombay Dogs
Jadoo Works • Bangalore based animation firm
• Worked for US animation studios like Wild Brain and Guardian Angel
Animation (GaGa)
Note: This list is not exhaustive
ANIMATION INDUSTRY – INDIA.PPT 17

18. Major players(2/3)
Company Overview Work Portfolio
• One of India's oldest Mumbai based
Maya Entertainment animation studios • Special effects for The Mummy and Stuart Little
• It has an academic and training wing • A character called Wabo, to be used by the United Nations to educate
Maya Academy of Advanced worldwide audiences on the importance of fresh drinking water
Cinematics (MAAC)
• Bagged a project worth USD 8 bn from 4K Animation GmbH, a German
animation company; one of the biggest deals struck by an Indian BPO in
• A division of Satyam Computer
A division of Satyam Computer p
animation space
Nipuna Services Ltd
d
Services • Working on animatronics models for New Zealand Theme parks as well
as an animatronics dog for Animal Planet’s series K9 to 11 for a New
Zealand ‐ based company called Applied Gravity
Padmalaya Telefilms
Padmalaya Telefilms • Expected to make 104 cartoon episodes for USD 14 mn and distribute
p p
• A unit of India’s largest listed media Mondo’s library for USD 15 mn
firm, Zee Telefilms based in Mumbai • Has deals with British Animation companies like Mallard Media and
Ealing Animation
Paprikaas
• Worked with global firms like Disney
• Bangalore based animation firm
• Formed a strategic alliance with DreamWorks Animation SKG
Note: This list is not exhaustive
ANIMATION INDUSTRY – INDIA.PPT 18

19. Major players(3/3)
Company Overview Work Portfolio
Pentamedia Graphics
•A subsidiary of computer software • Animated 3D film using the “motion capture” technique,
company Pentafour based in Chennai • Sindbad: Beyond the Veils of the Mists
Silvertoon Studio
• Mainly engaged in subcontract work for U.S., French, and British
Mumbai based animation firm
studios, using digital ink, paint and compositing system
• The Adventures of Tenali Raman, Hanuman
Toonz Animation
Toonz Animation
India •Based in Thiruvananthapuram • Tommy and Oscar a 2D/3D combo project
•Worldwide marketing offices in • Worked with Italian producer Rainbow Productions
London, California, Singapore and • A 2D television series called Will o’ the Wisp (26 X 6 min) for Animoon
Australia Plc, United Kingdom
• A big‐budget 3D television series for major a US broadcaster
A big‐budget 3D television series for major a US broadcaster
• Bagged a USD 10 bn deal with an American company for outsourced
•Animation division of UTV Software work and Dutch deals to produce a musical cartoon series called
Communications and is one of the top “ClubNow!” and a fantasy series “The Donz”
UTV Toonz
ranking studios dealing in flash as well • A project with Cinegroup of Canada for the images for a sci‐fi series
as traditional animation based in • Working with companies in Scotland and Luxembourg for the
Mumbai development of series like “Clootie & Dumpling” and “Snow Queen”
• “Kong: The Next Generation” for New York‐based BKN New Media
Note: This list is not exhaustive
ANIMATION INDUSTRY – INDIA.PPT 19

20. •Market Overview
•Drivers & Challenges
Drivers & Challenges
•Future Trends
•Competition
•Key Developments
ANIMATION INDUSTRY – INDIA.PPT 20

21. Key developments
Date Key developments
• BIG Animation & Frameboxx have taken a new initiative Industry Academia Interface (IAI) under
09‐May‐09 which they have joined hands with a number of institutes to give its' students an exposure to the
production environment and also an opportunity to interact with world class artists at the studio
• DQ Entertainment, a gaming and animation content developer, has signed an agreement with the
06‐May‐09
French entertainment company Moonscoop to develop and produce Jungle Book
• Arena Animation, a leader in high‐end Animation & Multimedia Training will now offer a B.Sc.
16‐Apr‐09
16 A 09 Degree i M lti di and A i ti
D in Multimedia d Animation, i coordination with M
in di ti ith Manonmaniam S d
i Sundaranar U i
University
it
(MS University)
• India Tales Media, the animation filmmaker, has bought 41% stake in the Bangkok based animation
27‐Dec‐08
company, OPA‐Studio for an upfront cash transaction of $3‐5 million
• DreamWorks SKG to get USD 550 mn funding from Anil Ambani's Reliance Group (ADAG) allowing
08‐Aug‐08
Steven Spielberg's film studio to split from Viacom Inc.’s Paramount
• Nomura Holdings Inc is investing $16 million in Chennai‐based Real Image Technologies Pvt Ltd, a
media technology company
31 Jul 08
31‐Jul‐08
• Real Image specialises in digital media technology for the film, video, audio and animation industry
worldwide
• Ram Shriram's Sherpalo Ventures has invested in an Indian animation outsourcing firm Prana
05‐Mar‐07
Studios. Prana has offices in Mumbai and Los Angeles
ANIMATION INDUSTRY – INDIA.PPT 21

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