Indian animation finds digital niche
By CNN's Geoff Hiscock
 |  At Gotham Studios India in Bangalore, a Spider-Man animation takes shape on the computer. |
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 Old meets new as India attempts to balance its high tech future with a traditional past.
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MUMBAI, India (CNN) -- What do you get when you cross the glitzy entertainment panache of Bollywood with India's prowess in information technology?
One possible answer is a thriving special effects industry in which Indian creativity, computer skills and low business costs have dealt it a preferred seat at the global animation table.
And while animation is just one niche of the entertainment industry, it is still big business -- the worldwide market for digital animation could reach $70 billion next year.
That covers more that just the animation component of blockbuster films such as Shrek, Finding Nemo and Lord of the Rings. It includes direct to home videos and DVDs, gaming, merchandising, theme parks and toys.
So far, India's share is still quite small -- a total revenue of $150 million a year for leading companies such as Crest Communications, Pentamedia Graphics, Animation Bridge, Toonz Animation and Paprikaas Animation.
But the potential is huge, particularly as the needs of the film and television industry evolve and India's capability becomes better understood.
One driver is the content itself: the emergence and commercial success of fully animated film and television series in Japan, the United States and Europe (think Princess Mononoke, Final Fantasy, Toy Story, Star Wars).
Another is the ability to use technology that goes beyond the traditional movie theater -- what Mumbai-based industry veteran Biren Ghose says is the explosion of mobile communication devices in Asia that all require hot content to win user acceptance.
"Mobile phones, games, PDAs ... audiovisual content is being added to all these platforms," Ghose told CNN recently.
According to Ghose, who is managing director of Animation Bridge, special effects have always been part of a film's budget.
"Even a simple story would have 10 to 15 percent of its budget for special effects, even just to save costs," he said.
Producers saw that using computer animation could help them minimize the impact of uncertainties such as the weather, and provide a definite production timeline.
Ghose maintains that the cost of large-scale animation projects in Japan and the United States became financially untenable " a long time ago," leading to the outsourcing of this work to lower-cost countries such as South Korea and Philippines.
But these were simply service contracts, not creative partnerships.
Now there is a new approach -- one in which he says India has an edge.
Ghose says it is hard to be prescriptive about Indian computer skills, "but they adopt new software very quickly -- faster than the rest of Asia."
"The new business model in animation today is co-production," Ghose says. "It accounts for 70 to 80 percent of programs."
Tighter margins
|  The 1997 Japanese feature Princess Mononoke became that country's biggest box office success. |
Ghose says that in the last three to four years, the margins in animation work have tightened and there is stringent cost control, with more money being spent on branding and marketing.
That means the big U.S. and European studios want to find partners willing to share risks, budgets and future developments -- understandable when labor and computer time in India can be anywhere from 10 percent to 40 percent of the cost in the United States.
Companies such as Crest Communications already work closely with U.S. television networks. Crest, which has its main computer animation center in Mumbai, is the creator of the cartoon series, Jakers! The Adventures of Piggley Winks for the U.S. PBS network.
Pentamedia Graphics, based in Chennai, has gone more for full-length features. It created India's first computer animated feature film, Sinbad: Behind the Veil of Mists, and has followed it up with Alibaba, Buddha (a co-production with Singapore) and the just-released Son of Alladin.
Proponents of India's animation industry argue that while it employs high-powered computer technology, it offers more benefits than plain BPO (business process outsourcing) -- the other industry spawned by India's success in information technology.
"This (animation) is a business that is people and skill-led," Ghose told CNN.
"It is not just price -- there is always going to be somewhere cheaper. What is important is the quality of the people coming into the industry and their skills," he says.
The co-production model allows the Indian animation companies to work with film-makers from Japan, North America, Europe and other parts of Asia.
"When both parties bring resources to the table, there is more upside for everyone," Ghose says.
And, he might add, more content for the marketers to offer to a multitude of entertainment "platforms."
