The business model of co-production in animation is more relevant now than ever before. The new model comes in the wake of the increasing difficulty in finding funding for animation series as well as garnering advertising revenues to completely fund content. The speakers at the sessions on animation, titled 'Co-production: A win-win game', at FICCI FRAMES '05 agreed that co-production is the way forward.
Among the reasons cited were the shared risks and revenues in co-production, making it a constructive and safer option, when compared to singularly producing animation content. The additional revenue streams, enhanced publicity and credits, co-promotion options and synergies (through core competencies of multiple partners) were reasons enough, it was said, to make co-production the predictable future course of the animation industry. The extent of geographic spread also resulted in a wider market, making co-production the best option for the industry, they said.
The bulk of the US $25 billion industry is in TV animation series, DTH videos and DHV/DVDs. And the speakers felt that gaming was yet to take off in India in a big way. Tapas Chakravarti, Managing Director and CEO of DQ Entertainment, said, "The substantially shrunk licence fees, increase in production cost and reduction in funding options explain the thrust on co-production."
Chris Rice of the UK-based Cinnamon gave the investor's perspective to developments in the animation industry. He explained that it was not a margin business, but a rights business, stating, "It is only in India that the animation business is looked at as an extension of the software business. Elsewhere, it is an extension of the media business."
There was unanimity in the premise that the Indian animation industry is poised for a giant leap. Rice summed up the thought by saying, "India is a very vibrant society, with a lot of talent. In the next 4-5 years, India is going to become one of the key content centres of the world."
Most speakers also concurred on the view that the Indian Government needed to emulate steps taken by those such as the Singapore Government, which has entered into treaties to grow the industry locally.
A third of all developmental resources in animation is wastage: Christopher Thompson
Minimising the huge wastage in the animation industry could be a sure-fire route to increasing efficiency of operations, felt Christopher Thompson, GM-Asean, Electronic Arts (EA). He explained that EA's success was largely driven by minimising the wastage in developmental resources.
Speaking at a session titled, 'Project and Schedule management in Animation and Gaming', Thompson said, "Around 30 to 40 per cent of all developmental resources employed in the animation space globally is wastage. Managing and minimising this wastage is critical to the success of an animation enterprise."
Thompson urged the need to increase efficiency in operations, while saying that planned pre-production and a corrective approach makes the difference between profits and losses. Concurring with the view, Deepak Ail, Head - Delivery, Indiagames Ltd., said, "We have grown in the last two years due to some of the systems put in place in the early years. These included ERP systems and a 'bug-tracking' system. Both are necessary for successful project and schedule management."