India Represents a Lucrative Animation Market

 

Animation companies in India have a reason to set new targets and tread on growth path after the announcement by NASSCOM that the animation industry will generate revenue of US$ 1 Billion by 2012 from an estimated value of US$ 494 Million for 2008, as reported by Bollywood Hungama.

 

At the NASSCOM Animation & Gaming Summit 2009 organized in Hyderabad (India), a report was unveiled containing elaborate information of key challenges before the animation and vfx (Visual F/X or VFX) markets. Among these challenges, limited demand for animation has been guiding others because companies suffer from inadequate promotional budgets and confined theatrical distribution. Tough competition from foreign animations and poor availability of long-term financing for animated movies and limited use of vfx in Bollywood are some critical problems faced by the animation companies.

 

According to a recently released report 'The Animation and Gaming Industry in India' by Ernst & Young, the global animation market was estimated at US$ 68 Billion for 2008, and is expected to grow at a CAGR of 10% to touch the value of US$ 100 Billion by 2012.

 

The incorporation of 3D effects has improved the quality of animation movies and enhanced the visual appeal. A new trend of outsourcing animation content to Asia has also evolved in recent years.

 

Moreover, the Indian Ministry of Human Resources Development (HRD) has adopted a new approach of talent development by including animation and gaming as its focus area. This change in approach will have positive impact on the growth of the industry as more and more people will make it a career option.

 

Nevertheless, the industry is currently facing a severe talent crunch. “A career in entertainment industry wasn’t considered a mainstream profession earlier. But with the influx of television channels, it’s a much sought-after profession now. Similarly, animation and gaming is still not a mainstream profession, but as the industry grows, we hope demand will increase,’’ said K Rajesh Rao, CEO, Dhruva Interactive, as reported by Express Buzz.

 

According to a Research Analyst at RNCOS, “The overall Indian gaming industry generates revenue from the service market, consumer market and non-development activities such as technical support services to international firms. The animation industry should follow the Bollywood example of having a restructured model that generates more profits after recession.”