Gaming and animation industry

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Animation

Animation or 3D is a big innovation.We can understand animation from the Greek word "animare" which means to give life to something without. Animation is a series of still pictures that are shown in rapid succession creates the illusion of movement because of persistence of vision, this means the image stays on the retina a fraction of a second longer. If we see many images (24 a sec) they will all link up. There are different types of animation computer games use animation for games such as tomb raider and frogger, the characters and settings are all animated. Cell animation is the process of taking a sequence of images and stringing them together to create movement. It is an old process that is still used today to create animation for cinema, television, and computers. An example of cell animation is in programmes such as superman. Cut out animation is a technique that is quicker than cel. Parts of the body of an animal or person are cut out and coloured, then assembled and reassembled into different positions instead of being drawn over and over again.

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Animation has developed a lot since the 1900s, the first animated feature film was made by Cohl and George Melies that was made in 1918.

India's, gaming, industry, $860, million, and, animation, industry, $1bn, 2012.

India's gaming and animation industry's are the 2 industries which are going at a fast rate. The compounded annual growth rate (CAGR) predicted for animation industry is 22%. For gaming industry it is 53%

NASSCOM, animation industry is a $494 million industry in 2008 and at the CAGR of 22% it will be $1bn industry. These are revised estimates where the growth estimates are cut. The global CAGR is estimated to be 10% much lesser than India's own CAGR. Animation globally will be a $100 bn industry (it is $68 bn in 2008)

Key segments in Animation:

o Entertainment animation,

o Animation education,

o Custom content development and

o multimedia/web design and VFX

o Gaming on the other hand

The segments are split as shown below :

animation-nasscom

Gaming is the fastest growing among the two and probably the fastest growing industry in India. It is $167 million industry in 2008. With an estimated CAGR of 53% it will be $830 million in 2012. Globally it is $21 billion in 2008 and will grow to $53.6 billion in 2012.

Key segments in gaming:

o Online games,

o Massively multiplayer online role-playing games (MMORPG),

o Casual,

o Mobile games,

o PC games

o Console games,

o Regular and Handheld

The segments are split as shown below :

gaming-nasscom

NASSCOM revised its 2012 forecast for animation industry from USD 1060 million to 830 million and gaming industry from USD 1163 million to 1000 million. Some of the factors which accounted for the revision were the global economic downturn, domestic box office for animation movies not picking up as estimated, End to end skill sets not being developed in the animation services industry.

Animation industry in India

India is emerging as an outsourcing hub for animation and visual effects with large number of international media companies entering into joint ventures with animation studios in India.

The Animation Industry in India though a late starter, is considered as one of the fastest growing segments of the entertainment and media industry. The Animation Industry in India gained significance as an outsourced destination for animation work due to low cost, skilled labour as its many advantages. In the recent past Indian animation companies and animation studios have been moving up the value chain to create their own intellectual property rights with Hanuman, Roadside Romeo, etc. and partnering with international studios to produce animated properties for the global audience.Though a majority of the work done by the animation industry in India is outsourced work, this is expected to change in the future with increased demand from the domestic entertainment industry. The Indian animation industry in 2007 was estimated at USD 0.31 billion and is expected to grow at CAGR 24% to reach USD 0.94 billion by 2012.

The Indian animation industry in 2007 was estimated at USD 0.31 billion and is expected to grow at CAGR 24% to reach USD 0.94 billion by 2012.

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Indian animation industry including market size, growth and key segments. Analysis of drivers reveals that growing demand for animated content in the domestic market, cost arbitrage opportunity in India, improving animation education and increasing character licensing business have helped growth of this sector in India. The key challenges identified include high set-up and production cost, talent shortage and lack of protection of intellectual property. The future trends identified include increasing animation application in other sectors, domestic animation movies earning revenues through international releases and increase in investments and realizations for animated movies in India.

Market size and growth rate of animation industry

With global players like Walt Disney, Imax, Warner Bros signing contracts with Indian animation companies for outsourcing and co-production, it is expected that the animation industry in India can touch $950 million by 2009 and is expected to grow at a fast pace over the next five years.

However, outside the Industry there is scepticism about the pace of growth because of the challenges like piracy, lack of intellectual property (IP) protection rights, acute lack of resources and investments the Industry is facing.

In an interaction with Business Standard, KPMG Advisory Services (P) Ltd Director Jaiddep Ghosh said, "Although India is the largest media consuming market in the world, only 1 per cent of the US market size which is estimated at $10 billion, so far the animation is concerned, it is currently pegged at $600 million."

Commenting upon the industry market size, he said, "The Indian market size is extremely fragmented with the top players accounting for 10-15 per cent of the industry turnover. Further, most of the players are direct or indirect off-shoots of the Indian BPO boom. This legacy and low indigenous demand forced most of the players to adopt the outsourcing business model."

Prominent players include Toonz Animation, Crest Communication, Maya Entertainment, UTV Toons, Zee, etc. Also, Pritish Nandy Communication has plans for five full-length 3-D animated bollywood films and has signed a $25-million deal with Florida-based animation company Motion Pixel Corporation. Crest Animations has entered into a three-movie co-production agreement with Lions Gate, a major movie studio. Also, animation studio DQ Entertainment has made a pact with US-based Electronic Arts to work on PC games.

With these developments, it seems that things will change dramatically in the near future. Further, Walt Disney, Imax, Warner Bros are signing contracts with Indian Animation companies for outsourcing and co-production.

"Animation needs a much larger investment and longer production circles. However, it has very long shelf lives and content leverage scope. A typical animation movie may take 2 years for completion unlike general movies. Further it is labour intensive, although with the advent of computers, the work has been simplified and is a relief from the days when each frame had to be drawn by hand. It is estimated that the labour may account for 70-80 per cent of the total costs for a 2-D animation production. It is lower for 3-D animation. Further, animation products are expensive to produce, on an average animation costs 5-15 times more than a live product."

The key challenges before the industry are piracy and lack of IP protection rights and an acute lack of resources, investment and government support. The slack IP laws and weak enforcement mean that studios can expect leakage of revenue at every stage.

Indian animation industry poised for growth

Right now, about 300,000 students are undergoing training in animation technology across India. "Most of the professionals are still at the entry level," The way the industry is growing, even these 300,000 professionals will not be enough to handle the work load in the coming years.

Good times ahead for Animation Industry apirants as "Hanuman", "Hanuman Returns" and now "Bal Ganesh"... the string of successful animation movies is an indication of the fast growth that the Indian animation industry is poised for after the development of some very advanced software.

"As far as the Indian animation movie production is concerned, a new phase has now started after advanced software has been developed. Technology is key to the growth of the animation sector.

India has about 200 animation, 40 VFX and 35 game development studios, but the country needs more workstations to make optimal use of the potential that the industry has.

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we get trainers from the US and Canada to train our staff and help them understand the current trends in animation in the world market. This ensures that the output is on a par with the acceptable levels for international standards, especially Hollywood.Animation movie making will soon emerge as a self-sufficient industry and attain a full-ledged stature.

The Indian animation movie production, however, had a rather shaky start. In 1984, when the renowned artiste Ram Mohan wanted to make an animation movie on the Indian epic Ramayana in collaboration with the Japanese filmmaker Yogo Sako.

The movie, "Ramayan," executed under Mohan's leadership, created a revolution in the international market in that it made the Western world aware for the first time of talent available in India to make animation movies.

India saw an outsourcing boom subsequently. But, due to the high cost involved, together with shortage of manpower and technology, animation movie making stagnated after "Ramayan" was released.

Some of them did create story-based animated work, but those were meant only for the advertising commercials. It was only since 2000 that corporate houses set their sights on producing animation movies.

UTV was the first corporate entity to plan animated versions of India Book House's popular "Amar Chitra Katha" series in the 1990s. But the project did not get off the ground. A decade later Percept Picture Company (PPC) brought to India its Hanuman series of animation features - "Hanuman" and "Hanuman Returns."

At a one-day conference on animation and gaming in Chandgarh recently, Punit Vatsayan, managing director of Mobera Systems Pvt. Ltd., said the Indian animation and gaming industry is projected to reach the $1 billion mark by 2010 from the current combined revenues of $402 million.

Navin Gupta, chief operating officer of the Maya Academy of Advanced Cinematics (MAAC), a Mumbai-based animation training institute, said the Indian animation industry is still hard-pressed for skilled manpower.

Made on a budget of about Rs.15 million, PPC's first animation movie "Hanuman" went on to earn Rs.70 million for the corporate entity. PPC followed it up with "Hanuman Returns".

Shemaroo in another Indian company that feels animation is good business. It has set up its own animation studio to create animation movies in-house. Though Shemaroo's maiden animation attempt, "Bal Ganesh", did not see the success of PPC's "Hanuman" and "Hanuman Returns", it scored in terms of quality.

Animation movie can be made here 15 times cheaper than the cost of a Hollywood production.

Supply chain governance and outsourcing in animation

As a result of all the potential of the animation market, the governance of animation production (i.e., where decisions on the supply chain) is dictated by the institutions which control whether content is produced and how it is distributed. Increasingly, these two aspects are connected. In the US, the distribution of animation is essentially controlled by the large TV channels such as the Fox Network, the specialized channels such as Nickleodeon and Cartoon Network, the larger distributor/studios or other content providers such as Disney. It is only when a production studio gets large and well-known enough that it can effectively dictate its own future.

Since most animation series are carried by TV studios, and since these studios may be in the broadcasting rather than production business, they rely heavily on contracting with creative talent of outside production studios. Specialized animation channels, and previously Fox, usually keep some internal pre-production and postproduction operations, and sometimes even hold onto the production internally. That is, they have their own creative talent, either for developing animation in-house, or for spotting or identifying concepts in the conceptualization and preproduction phase, which are then “outsourced” to animation studios.Post-production is often done in-house as well since it is really a follow-up stage that ensures that production meets the preproduction specifications. In contrast, the recent 3D movies have largely not been outsourced. The reasons for this will follow as we examine the creative production process for Pixar in more detail.

Unlike animation, the film industry has outsourced their computer graphics (CG) effects for the most part. This is partly because of the flexibly specialized nature of film production, which allows outsourcing, and partly because of the fact that the film industry has traditionally been dependent only on physical assets such as actors and locations. Increasingly, however, computer graphics effects are becoming more and more useful in film, blurring the line between film and CG or CGI animation. No where was this more evident than in the Lord of the Rings trilogy: All three movies used CG effects extensively for the main battle scenes, redefining the notion of what assets are needed for epic scenes or to define a movie.

Supply chain governance and outsourcing in animation

As a result of all the potential of the animation market, the governance of animation production (i.e., where decisions on the supply chain) is dictated by the institutions which control whether content is produced and how it is distributed. Increasingly, these two aspects are connected. In the US, the distribution of animation is essentially controlled by the large TV channels such as the Fox Network, the specialized channels such as Nickleodeon and Cartoon Network, the larger distributor/studios or other content providers such as Disney. It is only when a production studio gets large and well-known enough that it can effectively dictate its own future.

Since most animation series are carried by TV studios, and since these studios may be in the broadcasting rather than production business, they rely heavily on contracting with creative talent of outside production studios. Specialized animation channels, and previously Fox, usually keep some internal pre-production and postproduction operations, and sometimes even hold onto the production internally. That is, they have their own creative talent, either for developing animation in-house, or for spotting or identifying concepts in the conceptualization and preproduction phase, which are then “outsourced” to animation studios.Post-production is often done in-house as well since it is really a follow-up stage that ensures that production meets the preproduction specifications. In contrast, the recent 3D movies have largely not been outsourced. The reasons for this will follow as we examine the creative production process for Pixar in more detail.

Unlike animation, the film industry has outsourced their computer graphics (CG) effects for the most part. This is partly because of the flexibly specialized nature of film production, which allows outsourcing, and partly because of the fact that the film industry has traditionally been dependent only on physical assets such as actors and locations. Increasingly, however, computer graphics effects are becoming more and more useful in film, blurring the line between film and CG or CGI animation. No where was this more evident than in the Lord of the Rings trilogy: All three movies used CG effects extensively for the main battle scenes, redefining the notion of what assets are needed for epic scenes or to define a movie.

India's Advantages in the Animation Industry

India's attractiveness as an animation hub lies in the presence of an English-speaking workforce, high-quality software engineers, a large pool of creative talent, good studios and low costs. The cost of producing a 30-minute 3D animation programme in India is US$60,000 compared to US$250,000-400,000 in the United States and Canada. India has a cost advantage compared to the Philippines, which is another low cost producer of animations. The average monthly salary of an animation professional in India is US$600 compared to US$1,000-US$1,200 in the Philippines. The cost of outsourcing one hour of animation work to India is estimated to be 30% to 40% of the corresponding costs in leading animation centres in Korea, Taiwan and the Philippines.

India's advantages in low costs have been exploited by many multinational firms and production studios. The advent of digital animation coincided with the liberalization of the Indian economy and India offered the benefits of lower production costs, strong creative and technical skills and a large English speaking population. This has led to the development of state of the art animation studios in several Indian cities, and these studios are collaborating with global entertainment companies.

Main characteristics of animation

Animations for Education

Educators are enthusiastically taking up the opportunities that computer animation offers for depicting dynamic content. For example, PowerPoint now has an easy-to-use animation facility that, in the right hands, can produce very effective educational animations. Because animations can explicitly depict changes over time, they seem ideally suited to the teaching of processes and procedures. When used to present dynamic content, animations can mirror both the changes in position (translation), and the changes in form (transformation) that are fundamental to learning this type of subject matter.

In contrast with static pictures, animations can show temporal change directly (rather than having to indicate it indirectly using auxiliary markings such as arrows and motion lines). Using animations instead of static graphics removes the need for these added markings so that displays can be not only simpler and less cluttered, but also more vivid, engaging, and more intuitively comprehended. In addition, the learner does not have to interpret the auxiliary markings and try to infer the changes that they summarise. Such interpretation and inference may demand a level of graphicacy skills that the learner does not possess. With animated depictions, information about the changes involved is available to be read straight from the display without the learner needing to perform mental animation.

Animations Facilitate Learning

It seems that animations should be ideal for presenting dynamic content. However, research evidence about the educational effectiveness of animations is mixed. Various investigations have compared the educational effectiveness of static and animated displays across a number of content domains. While there have been some findings that show positive effects of animations on learning, other studies have found no effects or even negative effects. In general, it can be concluded that animations are not intrinsically more effective than static graphics. Rather, the particular characteristics of individual animations and how they are used play a key role in the effects that they have on learning.

Animations Make Learning Faster

Well-designed animations may help students learn faster and easier. They are also excellent aid to teachers when it comes to explaining difficult subjects. The difficulty of subjects may arise due to the involvement of mathematics or imagination. For instance, the flow$ of electric current is invisible. The operation of electric circuits is difficult for students to understand at the beginning. With the aid of computer animations, learning and teaching might become easier, faster and amusing.

Educational Effectiveness

It seems that when the subject matter is complex, learners may be overwhelmed by animated presentations. This is related to the role of visual perception and cognition in human information processing. Our human perceptual and cognitive systems have limited capacities for processing information. If these limits are exceeded when using an animation, learning may be compromised. For example, the pace at which the animation presents its information may exceed the speed at which the learner can process it effectively. You'll probably find it quite demanding to work out exactly what's happening in the accompanying animation (part of a pumping system) for this reason. But the solution is obvious: slow the animation down and accompany it with a written explanation. It is unlikely that superior learning is achieved by thoughtlessly substituting animation for a static graphic but by having it accompany textual explication. Another suggestion for addressing such problems is to provide user control for the learner over how the animation plays. User controllable animations allow learners to vary aspects such as the playing speed and direction, labels and audio commentary to suit themselves.

Perceptual Salience versus Thematic Relevance

Complexity of the subject matter may not be the only reason for difficulties that learners sometimes have with animations. It seems that problems can also arise from the perceptual effects of such presentations. In a poorly designed animation, the information that learners notice most readily in the animation may not be the information that is of greatest importance. Conversely, information that is relatively inconspicuous may be very important. You can see an example of this in the top right hand corner of the accompanying animation. Tucked away here is a small grey-coloured valve whose subtle movement lets air into this pumping system (which is where the bubbles come from). However, it's nowhere near as noticeable as the big, more central, orange-coloured valve that is going up and down so obviously. The point is that animations should not appear in a vacuum and most will require accompanying explanation.

Obviously, perceptibility of information does not necessarily correspond with its actual relevance to the learning task to be performed. Features of the animated display that are most conspicuous because of their contrast with the rest of the display are not always the best place for learners to direct their attention. In other words, there can be a poor correspondence between the perceptual salience ('noticeability') of a feature and its thematic relevance, and an accompanying text is needed to correct this.

The Top Ten Animation Companies in India

1. Toonz Animation India, is based in Thiruvananthapuram and has to its credit the successful series “The Adventures of Tenali Raman”. The team here is also working on a full-fledged feature film called Tommy and Oscar which is a 2D /3D combo project. This is apart from completing work for the Italian producer Rainbow Productions; a 2D television series called Will o' the Wisp (26 X 6 min) for Animoon Plc, United Kingdom and a big-budget 3D television series for major a US broadcaster. This company has tied up with First Serve International to form First Serve Toonz.

2. Pentamedia Graphics, Chennai is a subsidiary of computer software company Pentafour. It is best known for its animated 3D film using the “motion capture” technique, Sindbad: Beyond the Veils of the Mists.

3. Maya Entertainment, Mumbai has been doing outsourced work for a while now and has done the special effects for The Mummy and Stuart Little. It is also working on animating short films starring a character called Wabo, to be used by the United Nations to educate worldwide audiences on the importance of fresh drinking water.

4. UTV Toonz, Mumbai is the animation division of UTV Software Communications and is one of the top ranking studios dealing in flash as well as traditional animation. It has bagged a US$10 billion deal with an American company for outsourced work. Other assignments for international clients include like two Dutch deals to produce a musical cartoon series called “ClubNow!” and a fantasy series “The Donz”; a project with Cinegroup of Canada for the images for a sci-fi series. They are also working with companies in Scotland and Luxembourg for the development of series like “Clootie & Dumpling” and “Snow Queen”. It will also be working on “Kong: The Next Generation” for New York-based BKN New Media.

5. Heart Entertainment, a 2D animation studio is yet another big name in the animation sphere, which is doing a lot of outsourced work. Among the animation featured in its portfolio are Warner Brothers' Histeria, Tommy Nelson's Crippled Lamb and Little Dogs on the Prairie. It also has to its credit some work done for Walt Disney.

6. Padmalaya Telefilms, Mumbai is a unit of India's largest listed media firm, Zee Telefilms. It is expected to make 104 cartoon episodes for US$ 14 million and distribute Mondo's library for US$ 15 million. It has also inked some deals with British animation companies like Mallard Media and Ealing Animation.

7. Nipuna Services Ltd, a division of Satyam Computer Services, has recently bagged a project worth US$ 8 billion from 4K Animation GmbH, a German animation company. This assignment is among the biggest deals struck by an Indian BPO in the animation space. It is also doing significant work for a New Zealand - based company called Applied Gravity. The work includes animatronics models for New Zealand Theme parks as well as an animatronics dog for Animal Planet's series K9 to 11.

8. 8. Jadoo Works, Bangalore is working on an animated film series Lord Krishna and the crime caper Bombay Dogs. It has done work for US animation studios like Wild Brain and Guardian Angel Animation (GaGa).

9. Crest Communications, Mumbai, is a leading 3-d animation company and does a lot of work for American Studios. It came into limelight in 2002, when it won an Emmy for animation production work done for the animated series “Jakers: The Adventures of Piggley-Winks”. It is also to work on three features for Lions Gate Family Entertainment. Crest is also expected to produce and release “Sylvester and the Magic Pebble” based on the story by William Steig the creator of ”Shrek”.

10. 10. Silvertoon Studio, Mumbai, is engaged primarily in subcontract work for U.S., French, and British studios, using digital ink, paint and compositing system.

Challenges to Growth of India's Animation Industry

While it is true that India's animation industry is growing at a remarkable pace, the fact remains that this growth is largely a result of the mushrooming of “studios-for-hire.” In animation feature films, for example, while Indian companies carry out the animation work, most of the writing, character design, and storyboarding are done abroad. India is yet to become a successful player in concept creation, the high value-adding segment of the industry which remains a preserve of western firms. India's advantages of low costs in this industry will be too short-lived, and sooner rather than later, the country will have to start developing its own intellectual property. There are several challenges faced by the Indian animation industry.

Lack of Finance

Indian animation firms cannot match their western counterparts in financial strength. It is pointed out that state support in the form of tax holidays is crucial for success in the animation business. Canada, for example, offers major incentives to its studios for developing animation products. However, financial institutions in India have not been much forthcoming in funding projects in animation and interactive media. The long gestation period before fruition of projects discourages potential investors. This can be a major hurdle, and it has, in fact, led to the stoppage of a few production ventures. For example, Jadooworks had to stop production of animated epic of Krishna due to technical problems and lack of funding. The firm was supposedly on the verge of bankruptcy and this has led to the retrenchment of about Interestingly, Jadooworks is the same firm which drew appreciation from 250 workers.Thomas Friedman in an article in February 2004 for employing traditional artistes and transforming their skills to computerised digital painting - he was arguing that globalisation can have beneficial impact on traditional artists.

The experience of Jadooworks underlines the fact that it is still too ambitious for Indian companies to single-handedly enter into animation projects. Even a small project in the animation industry entails a budget of US$30 million, which is not affordable for Indian firms.

International Attention

Tata Elxsi Visual Computing Labs (VCL) in India tied up with Prologue Films in the United States to design the computer generated graphics for display at the academy awards in March 2004. This fact is not very well known. What this highlights is another challenge faced by the Indian animation industry - attention at the national and international level. While Indian animation companies do contract work for western firms, the entire credit, including ownership of copyrights, for the work goes to the western firm.

Paucity of Physical and Legal Infrastructure

As per the recommendations by a NASSCOM study, improvement of animation studios and better training for Indian animators are important for India's long term success in the animation industry.

India should develop an organized animation sector and also frame suitable laws and copyright rules. The infrastructural facilities have to be improved to attract more foreign investment and to enhance the efficiency of the industry. Also more emphasis has to be placed on the domestic industry as the domestic demand for animation in the entertainment; gaming and computer sectors are expected to grow multifold.

Need For Training

"There are no academic institutes like Indian Institutes of Technology, Regional Engineering Colleges, Polytechnics, etc., churning out animators by the thousands. What we have are only fine arts schools which teach the fundamentals but not the technical skills required for production," points out K. Chandrasekhar, General Manager, Media Works, Tata Elxsi. According to him, this is a major drawback for the industry in India.

Education in new media has to be embedded into the mainstream curriculum. Students have to realise that they can have a lucrative career as animators, and the government as well as educational institutions have to start programmes for their career development. The animation sector will benefit greatly by giving encouragement to the community of traditional artists as much as to technically trained professionals. In other words, integration of the rural and urban talent will prove highly beneficial. Also, NASSCOM's President Kiran Karnik believes that there is a need for an animation academy to build a steady inflow of animation professionals in the industry. NASSCOM extended its help to the government for framing the curriculum and also work with the industry players to enhance the academic-industry interface.

Government Support

Mr. Kapil Sibal, Minister of State for Science and Technology, identified animation industryHowever, compared to as one of the important sector for India's export oriented growth.governments in other countries, efforts by the Indian government to encourage the sectorhave been very minimal. The government of South Korea funds animation ventures on partnership basis. Bangladesh has a World Bank-funded support programme for theanimation industry. In contrast, there have not been many initiatives from the Indian government to promote the animation industry, at least till the past one year.

The Indian government signed co-production treaty with France about 20 years ago and efforts are on to reactivate it. A treaty was signed with the Italian government, which in turn sent a delegation to Goa. Efforts are also on to sign similar agreements with Britain, Japan, Brazil, Canada, Netherlands and China. These treaties will lead to sharing of costs by partner nations and also the dispersion of technical know-how amongst the partner nations.

New Moves by the Private Sector

Ittina Group, a property development firm, has invested US$5 million in an animation studio and school, Takshaa, in the Indian city of Hyderabad. The company plans to invest US$20 million by the year 2007. The school has the capacity to train 250 students and boasts of inculcating traditional artistic skills in addition to software training. The team heading this venture is renowned for its contribution to the global animation sector. It is planning to collaborate with universities in Germany and Singapore to offer university programmes.

Maya Entertainment has collaborated with international clients such as BBC, Nickelodeon (UK) and Electronic Arts among others. Toonz Animation's top customers are Disney, Hallmark, Paramount and Marvel Pictures. It also has co-production agreements with Eva (France) and Viva Vision (Canada). Maya Entertainment was nominated for the ‘Best Cinematics' award at the game developers conference for their work at the Electronic Arts School in 2004. It was also nominated for the Puldnella awards in animation for its work for the TV series The Tale of Jack Frost made for BBC. Tata Elxsi, in addition to the computer graphics work it did for the 2004 academy awards, also helped New York designers in their Hungama TV (in which more than 80% of the capital is bid for the 2012 Olympics Games.contributed by UTV) has plans to acquire overseas strategic investments. UTV has the option to invest up to 20% of the capital in a joint venture deal with Malaysia's Astro All Asia network for setting up a kids channel in Malaysia, Indonesia, Singapore and Brunei within three years.

Sun Network TV is planning to launch a kids cartoon channel in association with UTV. As per the discussions conducted so far, UTV will take care of the programming and marketing of the channel while the distribution of the channel will be handled by Sun TV.

Plans are on to create an Indian version of Sesame Street and the local version is expected to be called Gali Gali Simsim, and this will be launched on Cartoon Network. An educational research team led by Dr. Asha Singh is in the process of developing an innovative curriculum keeping the Indian kids in mind.

Animation Company Colour Chips has entered into an alliance with a South Korean government agency to explore possibilities for Korean film makers to tap the low cost technical expertise in India.

Professional Bodies in Indian Animation Industry

The Animation Society of India (TASI) and Association Internationale Du film D'Animation (ASIFA) have been involved in various animation workshops and events since their inception. Experts feel that it is a very important time for the Indian animation industry, both for professionals and budding animators. Organisations like ASIFA India and TASI have been nurturing talented artists in the animation industry

TASI has been in the business for almost four years and has been involved in more than 80 interactive sessions and numerous full day workshops. According to TASI secretary, Ranjith Singh, the objective of TASI is to promote the cause of animation industry through collaborative efforts with other organizations.'

ASIFA, the only internationally recognized organisation for animation, has opened up it first ever national chapter in India. The Indian chapter of ASIFA will be located in the Toonz Studios in Techno Park, Trivandrum. The need for creating more awareness about the animation industry among the public and market players was stressed by ASIFA. It will act as a manpower consultant providing artists to studios around India. It has also given a representation to the Indian Government to recognise the animation industry as a part of the information technology industry.

New Government Initiatives

A 25-acre Special Export Zone (SEZ) is going to be constructed in the outskirts of Thiruvananthapuram exclusively for the animation industry. The commerce ministry is said to have approved the creation of the SEZ within the Film and Video Park (FV Park) set up by the Kerala Industrial Infrastructure Development Corporation near Thiruvananthapuram. The state government is said to have created a 15,000 sq metres animation facility to welcome animation houses to create their bases. The FV Park made a good start when the Chennai-based Prasad Labs has made it its base to process all Malayalam films for the next two years. Kerala has been making efforts at convergence in the areas of information technology and cinema.

Animate' is a new animation academy in Kolkata. This offers programmes in basic and advanced 2D and CG (computer generated) animation with a curriculum that focuses on hands-on training. An alliance has been formed with Los Angeles-based Gigapix Studios to facilitate technical support, co-production and co-finance animation projects. The state government of West Bengal is providing much encouragThe Animation Production Association of India recently suggested to the Information and

Broadcasting Ministry of India that all TV channels must ensure 10% reservation for local animated content. The government can further encourage investments and participation in this sector by providing tax benefits. It can provide grants to Indian animators for participation in international conference and for taking up training programs abroad. ement to the animation industry.

Opportunities in Collaborations

Indian companies are trying to improve quality and making attempts to compete globally with the market leaders in the industry. It is said that the year 2004 is a watershed for the Indian animation and gaming industry (according to the Federation of Indian Chambers of Commerce and Industry [FICCI] report on the Entertainment Industry). The year was marked by increased use of animation in the Bollywood segment. According to the FICCI report, the

increasing demand for downloads of games on mobile phones will enhance the opportunities for gaming companies and bring in new entrants.

Several Indian companies are entering into collaborations with foreign new media companies, which outsource their work to the Indian companies. Recently, Toonz Animation floated a joint venture with First Serve International LLC, a global media company which aims to produce and distribute top-notch animation programming for the world market. The new venture will be headed by former Walt Disney executive Ed Borderding. In 2004, a Chinese company also invested in India Games Ltd.

Toronto-based entertainment products company Kahani is collaborating with Mumbai basedAnimation Bridge. In this venture, Kahani is expected to invest US$30-US$40 million overthe next three years to engage in film production. The storylines and scripts will be completedin Canada whilst product development and promotion are expected to be done in India. Thecompany is also planning to tie up with Bangalore and Hyderabad-based studios. Zee'sanimation arm, Padmalaya Telefilms, has signed a US$14 million contract with Italianproducer-distributor, Mondo TV, to co-produce four new animated series. Padmalaya alsohas collaborations with British animation companies Mallard Media and Ealing Animation.

International Cooperation in the Animation industry

The Indian government is signing co-production treaties with other countries. Professional organisations too are trying to promote the Indian animation sector abroad. ASIFA, India, organises film festivals, conducts workshops and animation film competitions at the international level. Kahani and Animation Bridge have showcased their animation shows at Cannes Mipcom (a summit where mobile, broadband and interactive professionals from 95 countries interact with broadcasters, producers and distributors) in October 2005.

X-media Lab has been floated to help local, independent digital media producers reach theiideas successfully to the market with assistance from outstanding international new mediaprofessionals, who act as mentors to the companies and project teams. The second lab held inSingapore from 17 - 19 November 2005, "Creating Successful Computer Games”, attractedworldwide response. Indian developers have also been invited to interact with eight of thebest games people in the world. There is also a plan to do a lab in India next year.

According to Mohit Anand, Country Manager, Microsoft Entertainment and Devices Division, Microsoft India, “Gaming in the last 7-8 years has really come a long way but it still has a long way to go. Critical factors like PC penetration, organised retail, broadband, and gaming hardware need to be addressed to help the industry. Those factors are gradually changing and the future definitely looks bright. India is the youngest country in the world, and the new generation is completely tech savvy. We believe that gaming is definitely here to stay and evolve.”

opportunities for engagement between India, Singapore and other Southeast Asian countries in the field of interactive media and animation industry. To begin with, Singapore and Southeast Asia will be an important market for products from India's animation industry. Singapore has significant expertise in telecommunication and media industry. Harnessing the favourable trade and investment climate offered by the Comprehensive Economic Cooperation Agreement between the two countries, firms in Singapore should consider investing in India's animation and media business. Maya Academy of Advanced Cinematics, a leading player in the Indian animation industry, is planning to extend its operations to Singapore. It is currently working on a project for BBC and has also been involved in the video games division.

Entertainment is one of the fastest growing sectors in India-ASEAN relations. The entertainment industry is expected to grow at a compound annual growth rate of 20 percent from 2002 to 2007. The entertainment industry, with total revenues of US$3.6 billion in 2002, is projected to grow up to US$8.7 billion by 2007. ASEAN is a big market for Indian films. There are tremendous collaboration opportunities between India and ASEAN in the area of 3D animation, graphics, etc.

The Philippines was, until recently, a fast growing animation industry, rich in creative talent, and it was a major destination for outsourcing by animation firms in the United States. However, with rise in costs, the animation industry in the Philippines has begun to decline, and Filipino workers in the industry have been migrating to India and Singapore in search of jobs. India, the Philippines, Singapore and even China must realise that there is little to be gained in the animation industry in the long run by competing with each other on costs.

Rather, they should seek avenues for cooperation, and direct their efforts at acquiring intellectual property rights in this creative industry.

SWOT ANAYSIS

SSTRENGTH Sstrengths

ssSTRENG

· RICH HISTORICAL HERITAGE- MYTHOLOGICAL CHARACTERS ETC.

· LARGE ENGLISH SPEAKING BASE .

· 8-10% LOWER PRODUCTION COST THAN ABROAD.

Weakness

* RELUCTANCE ON THE PART OF INDIAN PRODUCERS TO INVEST IN FULL FLEDGED 3D ANIMATION.

* LIMITED MARKET TO SHOWCASE MYTHOLOGICAL CLASSICS.

* LESSER NUMBER OFD STUDIOS (75) AS COMPARED TO COMPETING COUNTRIES (SOUTH KOREA- 400).

* SHORTAGE OF SKILLED MANPOWER.

* LARGELY UNORGANISED SECTOR.

Opportunities

* HIGH GROWTH ESTIMATES, NASSCOM STUDY PREDICTS IT TO GROW TO $ 1.5 BILLION .

* INCREASING DOMESTIC MARKET, FEATURE FILM/TV PROGRAMMES, ADVERTISING, GAMES, ONLINE EDUCATION, AND INDUSTRY SPECIFIC APPLICATIONS LIKE ARCHITECTURE, MEDICAL AND LEGAL.

* ENCOURAGING GLOBAL SCENRIO - GLOBAL SECTOR TO GROW TO $ 51.7 BILLION .

Threats

. COMPETITION FROM CHINA

Pestle analysis

Economic factors

Nasscom declared that it has cut down its forecast on animation and gaming industry for 2012 because of the effect of the recession. As per the new revised forecast is concerned the industry had entrusted $830 million for gaming industry in place of $1,060 million and $1,000 million in the animation industry in place of $1,163 million.

As per the information given by the President of Nasscom, Som Mittal, the animation industry of India is estimated to increase at the CAGR of 22% in order to attain the mark of $1 billion on the other hand the gaming industry is expected to raise up by 49% in order to reach the mark of $830 million by the year 2012.

As per the report presented by Nasscom and Ernst and Young showed a through details of the advancement of the growth divers, issues and challenges and business models for the purpose of gaming and the animation industry in the coming few years. They have also mentioned the other factors that are simultaneously affecting in order to change the forecast. They were the lack of availability of skills for the animation industry, merge growth of the box-office for the animation movies and the proof of the content and the IP creation are not up to the mark.

PEST ANALYSIS

Conclusions

We have presented two faces of the animation industry: one at the very high end of 3D animation, as represented by Pixar, with all its internal technology development and total self-sufficiency in content development; and another, as represented by various studios in the Philippines doing 2D cartoon animation as contractors. Essentially, the technology-driven nature of Pixar, and the need for constant creative interaction dictate an in-house approach to production. Pixar's model will come under increasing pressure as other animation companies develop the technology and creative processes to compete. The model is also not a guarantee in an industry where hits and misses cannot not forecasted, even up to the point when the product is released. We have also illustrated how animation outsourcing occurs. It now appears that when labor- intensive production processes mature, along with substantial mechanisms for coordination and specifications, production can be located almost anywhere. In our second model, we also illustrated how political economy shapes the outsourcing pattern in the Philippines.

Philippine executives and officials have often argued that while Asian competitors offer animation services at lower prices, the Philippines boasts a cultural affinity to clients.

However, this has not been enough to protect the industry from the vagaries of the markets, and especially from itself, when wages went far higher than the market could sustain. The entrance of new players like India and China who work much more cheaply, combined with the Philippines too high wages, has caught the Philippines industry in a squeeze.

In addition to this, there is a deep divide between these two cases of the animation industry. The Philippines studios are essentially doing less creative work, and will not likely soon have the opportunity to participate in the conceptualization stage of creative production for global