Held on Day 2 at Frames 09, the session, ‘Challenges facing the Animation & Gaming Industry: Managing in Turbulent Times‘ was moderated by DQ Chairman Tapas Chakravarti and panelists included Member of Parliament, Yashodhara Raje Scindia, EXIM Bank Chief General Manager Matthew John, Turner Entertainment Networks Asia Director for Programming, Acquisitions & Development Vishnu Athreya and Think London Head of Emerging Markets Alison Porter.
“A downturn could just be the challenge to energize and restructure our sector” opened Tapas adding, “when the economy falls, the demand for escapist entertainment rises. In the great depression, Hollywood saw a 22% Boom. This does not mean we are recession proof as an industry but recession resistant.”
The recession means that funding will be selective for risk free content and high quality IP with a radical reduction in ad spends and budgets.
Talking about survival strategies, Chakravarti shared, “Co-productions are the key, including international multi party co-pros as well as domestic co-pros for local IP. We need to leverage the power of public funding and tax credits through these co-productions.”
He further mentioned “The Slumdog millionaire effect is immense and this movie has shown the west that a lot can be done with India.
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Presently there is a 12.5% service tax for outsourcing by EOU‘s, Domestic sales has service taxes. Special incentives have to come to promote this industry.
Chakravarti continued “Also needed is prudent budget management. Animation companies should go for an optimal budgeting by exploiting collective strength.”
Giving examples of the Government of Korea, Canada and France, he shared, “Indian animation industry too needs a stronger support from our government.”
He further added “We need to convince the government that investment in this industry will result in revenues from the global animation industry and employment creation for thousands of white collar specialists.”
Training in this field is very essential. The Indian market requires highly skilled workforce for 70 odd original features. Students need to be provided with proper animation education to enhance their knowledge with specific skills set. Inviting global animation experts to train the people here and also the government‘s establish animation as a mainstream career and reduce training costs.
Shared Vishnu Athreya, “We can all be boisterous about the opportunities in recession, but it also calls for us to be more prudent and have introspection. We need to decide amongst ourselves, what can be done and what cannot be done. It needs to be a partnership between various bodies to help sail through.”
Further he explained what our animation industry needs- ‘The 10Ps‘, The first one is Planning. Business men need to be creative, creative men need to be more business savvy. Process, without it, no point again, this is the crux of any animation produced in India, we need to innovate in our process. A great idea is an idea only when it sees the light of the day. Production, with the economics you are dealing with, what you can do with your production, example Pricing. Japan innovated and brought production costs down. Korea has its own distinctive style, does India have its own style on the basis of its economics. There is a big difference between animation made in India and animation made for India. Positioning, again is incredibly important, Today when a studio is asked what they can do, they are ready to do anything, 2D, 3D whatever you want.
One needs to specialize and develop a core competence. What‘s your key position? Next is Promise, It is easier to over promise and under deliver but it should be opposite and it should be internalized. Place, understanding the market, the channel, is very important. Indian animation at this point in time works in India. One needs the patience because It takes time to green light. The power of partnerships, the studio, the funds, the broadcasters, no one can work alone, your broadcaster needs good animation content, sit and understand what‘s the need of the channel, its not always about the funds. Phenomenon, the brands did not happen over night, Pokemon, Ben Ten. It takes time, Turner is taking baby steps with Chhota Bheem, this can happen when everybody in this room is on one page. And if all of this does not work, then Plan B.
Member of Parliament, Yashodhara Raje Scindia added her insights about the current conditions, “I went to LA as part of a FICCI delegation with Madhya Pradesh as partner state. I was amazed to find a lot of animation outsourcing was being done in India. The net result has been we started an academy of excellence for animation, mentored by DQ, 1st public private partnership of its kind for Madhya Pradaesh. DQ was offering a 100% job guarantee. The student‘s fee, paid for the DQ mentors and other infrastructure, government was never asked for a budget. It ended up being a model for my government, We started the academy in 2007 February, today that academy has already produced a 125 children working oat DQ right now. That means government can do it and PPP can happen as well. What we established was intent, credibility and till today we are running. Now Rajasthan also has the same PP Model for animation education with DQ. I am here today, as a living example of what the government can do if it wants to do it”
It is the best time for local market to get established, we need to focus more on quality content than the quality.
“Today even in turbulent times, if he has quality, that person will always have work. The final analysis is even though there is a thin line between recession and depression. The animation industry come hell or high water and content will always be sought and consumed.” She added.
Matthew John of EXIM bank shared, “We were set up especially to help exporters and to take companies globally. Our mandate clearly says we should be working with companies who are exporting or earning foreign currency. In the year 2000 the film industry was given the industry status and that when the banks moved towards the film Industry. IDBI was the first and we went to it in 2004. We started off with Hum Tum , Dhoom & VEER Zara, in 2005 I was invited by an animation studio and was very impressed with the kind of work that goes into making animation. We are looking at working with studios who are doing outsourcing, IP creation as well as those companies that are acquiring overseas studios. We provide finance by way of term loans, working capital and also for acquisition activity. For us as an institution, we work as a bank, a proposal that comes to us, it should be a bankable proposal. We are not Venture Capital.
Structuring that proposal in different ways, we will help you. We are very happy to play a role in making the Indian company go up the value chain.”
“It‘s not about the quality of animation it‘s about the script and the content. For eg Shinchan and Simpsons, we need to go and move up the value chain and also getting into the creative side. And develop the industry in a rounded manner.”
Alison Porter of Think London shared, “We have heard a lot about India in this panel. I want to share about the landscape in London for animation and about how Think London will be able to address those opportunities. London is home to a lot of the big names in animation and gaming. We want to see more Indian companies working in London and the idea is to make the dialogue with you. In London we have 49 games companies; we have a 2 Billion Dollar Industry going on there. We have 189 film companies in and around central London, 57 post production companies and 513 TV companies in London, a good source of customers for you and they all are talking about recession. My job is to be a match maker between India and London.”
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This is the best opportunity, in 2012 For the Olympics with massive screens, there is potential for a lot of content with 9.9 million household with UK broadband. In London, cost is going down, 25% pound rate, and 30 % poverty . Buying office now is a good time for Indian.
When asked by the audience about the next venture between DQE and Turner, Vishnu stated, “We are working with DQE on a business model before an animation model since several months where there is a win- win situation which includes broadcast, studio and the viewers. And the benchmark in terms of quality is always maintained.”
“We worked in a much planned manner with deep research; We were planning with CN for a long time for local content. Realization for local content was long ago but we wanted to make a mark in the industry. We have planned 7 home grown content including one feature.” Concluded Tapas Chakravarti.
A very valuable session to attend indeed!