Animation Production in India - A Global Opportunity for Outsourcing

India's animation sector is witnessing a major boom. Overseas entertainment giants like Walt Disney, Imax and Sony are increasingly outsourcing cartoon characters and special effects to India. Other companies are outsourcing animation from India for commercials and computer games.

So what makes India a hub for animation? Why is the sector experiencing exponential growth? for this, we take a look at what makes India shine in the world of animation.

India has a vast base of English speaking workforce: Animation, which requires familiarity with the English language, benefits when the work is outsourced to India. A number of animation companies in the country are also creating skilled manpower for the animation market through various training programmes.

Presence of good studios: India has the second largest entertainment industry in the world, after Hollywood. Animation studios in the country provide a large supply of low-cost, high-quality software engineers. A number of Indian animation companies have set up hi-tech studios (equipped with state-of-the-art hardware and software) to execute overseas projects.

Low cost of animation services: The main reason why foreign entertainment firms are flocking to India is the cost advantage the country offers. For instance, in the US, animators can cost about $125 an hour; in India, they cost $25 an hour. Toonz Animation offers animation at 25 per cent to 40 per cent lower rates than other Asian studios and much lower than those of American studios.

A new outsourcing fever has gripped India.

Global entertainment majors like Walt Disney, Imax, Warner Brothers and Sony are signing up huge contracts with Indian animation companies.

And cities in India like Mumbai, Chennai, Bangalore, Hyderabad, Bhopal and Trivandrum have emerged as the country's major animation hubs.

The total cost for making a full-length animated film in America is estimated to be $100 million to $175 million. In India, it can be made for $15 million to $25 million.

Major US animation studios and producers are realizing this huge cost advantage that India offers.

"Due to changing viewing habits, channels or networks are being forced to bring down licence fees. As a result, the volume of work has been dropping.

In this situation, India's advantage of low production costs could be a boon to the domestic animation industry," said Margaret Dean, Sony Pictures' head of family entertainment group and a consultant to various animation studios in the US, during a recent India visit.

According to the National Association of Software and Services Companies (Nasscom), the total revenues of the animation production services sector in India were estimated by between $200 million and $300 million in 2004.

Nasscom estimates the animation sector grew at a rate of over 20 per cent last year. "Demand for animation production services from India is growing with the emergence of an organised animation production sector, with state-of -the-art of work required for international TV program production, at substantially lower costs," a Nasscom report said.

Last year, a Nasscom study on the animation industry showed that the global animation production market is set for major growth. The study, which is based on multiple statistical projections on the market, from segments such as industry sources, Pixel Inc and Arthur Andersen (Study on the Entertainment and Media sector) forecast that the global animation market would generate revenues worth $50-70 billion this year.

But which are the countries that India is competing with in getting animation outsourcing?

"Primarily, we are competing with China. But even here, our quality standards are much higher than Chinese studios"

And cities in India like Mumbai, Chennai, Bangalore, Hyderabad, Bhopal and Trivandrum have emerged as the country's major animation hubs.

A slew of companies across these cities have dedicated themselves to the outsourced world of animation and special effects. These include Toonz Animation, Crest Communications, Maya Entertainment, VRS RED Entertainment, Silvertoon Studio, UTV Toons, Zee Institute of Creative Arts, 2NZ Studios, Pentamedia Graphics, Prasad Studios, Acropetal, JadooWorks, Color Chips and Heart Animation.

Experts say the future of animation in India is bright. "India has great stories, good cartoon characters from mythologies, good artists and technicians. Above all, we offer a competitive price, which nobody can match."