Finances are a major hurdle in the growth of animated movies; many believe co-production is the way ahead
The Rs 2,800-crore animation industry in India is struggling to stay in business. At the Ficci Frames 2011, experts raised concerns over the finances and said a dearth of original story ideas is hampering the growth of the industry.
While KPMG pegs the industry to clock a compounded annual growth rate (CAGR) of 19 per cent to reach Rs 4,000 crore in the next two years, N R Panicker, chairman, Accel Animation Studios, voiced his concerns that lack of incentives can hamper the expected growth rate.
One of the primary issues, Panicker said, is that there were not enough enthusiasts to finance projects. An average 2D animation film can take up to two years for production and up to Rs 10 crore-Rs 15 crore.
Ashish Kulkarni, CEO of Big Animation agreed that industry players do not have access to finance in the Indian markets. Several others said lack of co-production opportunities have also affected new financing routes. "Several countries offer co-production treaties to encourage the local animation industries but we donÃ¯Â¿Âœt have any such treaties in place by the government," said Panicker.
"Countries like Cananda, Malaysia and France have policies that allow firms to co-produce. They also provide for tax benefits. When they co-produce, at least 60 per cent of the funding is made up for within these countries, then they go global," said Munjal Shroff, director and COO, Graphiti Multimedia.
In the absence of co-production opportunities, companies like Accel and Big Animation have begun working as partners on film projects to manage costs. Big Animation will take care of ideation, visualisation, pre-production and post-production responsibilities while Accel Animation is concentrating on asset creation and animation production.
Kulkarni said: "It reflects the ability of the industry to create collaborative home productions that will have international potential. We plan to distribute the film in international markets too." Accel and Big Animation are confident that Shaktimaan will turn out as a landmark production and will create a quality benchmark for Indian properties in digital 2D for broadcasting.
The challenge is also about profitability or making money once these films are released. Seven Indian animated movies were to be released in 2010. But only three made it to the silver screen. And these three – Toonpur Ka Superhero, Luv Kush – The Warrior Twins, and Ramayana the Epic – bombed at the box office. This has further hampered the prospects of Indian animation.
However, Kulkarni remains bullish about his forthcoming productions. "Collaborate and grow should be the mantra for Indian animation companies who want to reduce the cycle time to bring new properties to the market. The international market for Indian animation is opening up and joint efforts will only help us leverage on each otherÃ¯Â¿Âœs strengths to produce world-class properties."
TurnerÃ¯Â¿Âœs Mark Eyers noted that most large Indian animation studios have ventured into co-production with studios in Europe and North America. For instance, DQ EntertainmentÃ¯Â¿Âœs The Jungle Book with ZDF Group and TF1, Peter Pan with Method Animation and France Television and Crest Animation Studios recent production Alfa and Omega with Lionsgate are examples of recent co-productions with overseas studios.
"This enables studios across different countries to pool expertise and open new markets for their films and television series. The participating countries benefit from positioning themselves in the international marketplace, favourable fiscal policies (including subsidiaries, grants, etc.) and access federal and provincial tax credits," said Eyers.
Accel Animation, a four-year-old studio, with a motion capture facility in Trivandrum and Chennai is working on eight properties and has its own intellectual property, the Indian Fables. AccelÃ¯Â¿Âœs short animation projects like Raju the Rickshaw are due for release in French markets, marketed and distributed by a local company in France.
"We are also working on a feature film project with a UK-based producer called Breakthrough Films, where we are doing the VFX work for that property. We have just signed a contract with a US company to make a 26-episode animation series," shared Panicker, adding that the company has decided not to enter into projects where it cannot find a producer.