As per the FICCI EY 2024 report titled “#Reinvent – India’s media & entertainment sector is innovating for the future,” the leaders from the animation sector were optimistic that as FY24 progresses, demand and activity within the animation sector would rebound, potentially reaching Rs 40 billion. However, even after finalising great collaborations in terms of projects, the sector did not grow as per expectations of the industry insiders. The global slowdown had affected the overall growth of the industry. Also, incorporating technological innovations like artificial intelligence (AI) in their workflow was challenging for many.
Despite the challenges, the sector is consistently solidifying its ground in the media and entertainment sector. Prime minister Narendra Modi, in his monthly radio program Mann Ki Baat, spoke about the animation industry and the vast opportunities it presents. This recognition reflects the country’s growing acknowledgment of the sector as a dynamic and promising field with immense potential. It is a testament to the recognition and importance the sector is gaining on a national level.
Let us look at some of the achievements of various animation studios and understand how the year was in general. Also, inputs from some of the studios give a sneak peek of what is in store for this year.
Major milestones and projects in 2024
Mumbai-based Assemblage Entertainment worked on two major projects – a preschool show Morphle & the Magic Pets created in partnership with Guru Studio and Moonbug which premiered on Disney Junior and is available on YouTube, and an adventurous series Press Start! alongside Cyber Group Studios which is streaming on Peacock.
2024 was a busy year for Toonz Media Group who saw multiple partnerships and co-productions. The company partnered with London-based Giffi to co-produce and co-distribute the animated series Adventures of Rusty based on the stories by Indian author Ruskin Bond; it collaborated with basketball superstar Anthony Davis and his JA3KMAN Productions to co-produce the feature film Pierre the Pigeon Hawk; collaborated with Mediawan Technology on the project Witch Hunters; partnered with Idea Tank for Hangry Pets; collaborated with India studios Studio Eeksaurus – for animated musical short Croak Show – and Ele Animations – for 2D animated series Jay Jagannath. In addition, Toonz will be working with Driver Studio on Blah. The company completed its 25 years, marking a milestone in the industry.
For Kerala-based Prayan Animation, the YouTube original series Super Sema has been a significant project. The studio worked on an unannounced IP from a major IP franchise. The project is currently under consideration with major OTT platforms, details of which are expected in 2025.
Charuvi Design Labs’ (CDL) major focus has been expanding beyond television to diversify its creative divisions. While it was actively involved in TV productions, feature films, and short films, this year marked a significant milestone as the studio ventured into designing immersive experience centers and public art installations. These projects have allowed them to push creative boundaries and connect with audiences in new and innovative ways, showcasing their ability to deliver impactful storytelling across diverse mediums.
Business and growth
Talking about the studio’s growth and revenue, Prayan Animation CEO & co-founder Vinayan V said, “The year 2024 has been slower in terms of business, but we’ve made some positive connections and worked on interesting projects. In terms of the studio’s growth, we have achieved significant progress by entering into partnerships with two studios in the U.S.”
Last year posed significant challenges for the animation industry as a whole, and Toonz Media Group was certainly not immune to its effects. “When the industry experiences a slowdown, it impacts all of us, leading to a more global deceleration,” said Toonz Media Group CEO P Jayakumar. “As a result, our growth has not met the ambitious targets we had set. However, when compared to some of the larger players in the industry, we have performed relatively well,” shared Jayakumar.
Interestingly, last year has been positive for CDL, with revenue growth exceeding that of previous years. The studio’s team has expanded and is actively recruiting to support its growing projects and ambitions. The studio founder and director Charuvi Agrawal mentioned, “We’re exploring new partnerships and diversifying our portfolio to sustain long-term growth. As we move forward, we remain focused on scaling operations and creating impactful content that drives both creative and business success.”
The industry is thriving due to several other key factors. The country’s cost-effectiveness allows studios to deliver high-quality animation at competitive prices, making it an attractive outsourcing hub for western studios. The boom in streaming services has fuelled demand for original animated content, providing opportunities for domestic growth. Government initiatives, such as tax incentives and the AVGC policy, have further strengthened the industry, with the establishment of a National Centre of Excellence promising advanced facilities and skill development. Additionally, India boasts a skilled talent pool, trained in global techniques, making studios capable of handling sophisticated projects.
Reflecting on the overall growth of the Indian animation and VFX industry, Assemblage Entertainment CEO Arjun Madhavan said, “The AVGC industry globally is experiencing a massive transformation that is offering a level playing field and a master reset. With its remarkable creative and technical talent pool and a growing local consumption ecosystem, India is well positioned to capitalise on this enormous opportunity.”
Trends identified in 2024
According to Jayakumar, advancements in AI and ML (machine learning) have begun reshaping the animation industry. AI-powered tools are streamlining animation workflows, automating repetitive tasks, and assisting in complex processes like character rigging and in-betweening. This has made animation efficient and allowed animators to focus on creative aspects. Animation studios are increasingly exploring VR and AR to create virtual environments and interactive media for entertainment, education, and marketing. A notable trend is the blending of 2D and 3D animation techniques to create visually striking, hybrid styles.
Agrawal too thinks AI adoption is picking up. However, most studios are still figuring out how best to integrate AI without relying on it completely. Its potential to revolutionise the industry is undeniable, she added, which is why it’s important to strike a balance. AI should augment creativity, not replace it.
Challenges faced by studios and industry at large
Since there was a downturn in the announcement of new projects and a decline in major investments in animation projects, it also affected the flow of service work to India. This was a challenging situation for Prayan Animation, resulting in a decrease in the amount of work from outside. However, they were able to overcome this challenge to a great extent owing to their existing clients and new partnerships. Additionally, their expertise in other fields of art, such as children’s book illustration and comic work, provided valuable support to the studio during this tough time.
One of the major challenges faced by Toonz was keeping pace with rapid technological advancements, which have been constantly evolving and transforming. Additionally, there was the ever-present global competition, and the challenge of staying at par with it, while maintaining cost efficiency. Managing both the workload and workforce was another ongoing struggle.
For major studios in India, creating IPs is a key goal. However, this is a resource-intensive endeavour that requires significant investment—something that Indian studios often do not have the luxury of. To mitigate this, Toonz Media Group sought international collaborations and co-productions to share both the creative and financial burden.
The challenges for CDL were largely consistent with previous years. “Attracting and retaining skilled talent continues to be a significant hurdle, as does gaining access to affordable capital to fuel growth and innovation. While advancements in technology have made certain processes easier, widespread adoption across the production pipeline is still at an early stage. Additionally, the fluctuating market economy and competition from global studios add layers of complexity to sustaining a competitive edge,” shared Agrawal. “To overcome these challenges, we have focused on upskilling their team, fostering collaborations, and optimising workflows to maximise efficiency. We’re also exploring partnerships and alternative funding models to address financial constraints. Looking forward, we believe that broader adoption of technology and a stronger emphasis on nurturing talent will drive positive change for both our studio and the industry at large.”
According to Vinayan, the major challenges faced by the animation industry during this time include the introduction of AI and the delays or cancellations of new or already announced projects. “The introduction of AI has created significant uncertainty among artists and companies regarding its impact on jobs and the industry as a whole. But as per some reports, an increased demand for kids’ content gives hope to the animation industry.”
Jayakumar observed that the US and European markets have largely rebounded from the disruptions caused by the pandemic. “However, challenges persist, particularly with the decline in the television industry. This downturn is reflected in falling television subscriptions and production revenues, while streaming platforms have increasingly taken control of content creation and distribution.” Despite these challenges, his team is confident in navigating these disruptions and believe that their engagement with western customers will continue to thrive.”
At the same time, the Indian market is earning recognition for its immense talent pool, which opens the door to promising partnerships. However, to fully capitalise on this potential, it is essential to navigate content regulations effectively and adopt sustainable practices. Overall, the current landscape presents significant opportunities for Indian creators to collaborate with western industries, promoting a mutually beneficial exchange of ideas and fostering creative growth.
Agrawal noted that the lack of creative expression is taking over in a big way. While the country has been an outsourcing hub for a while, seeing high-quality home-grown creativity has become a challenge. This does not bode well for the future.
Technology adaptations in 2024
Below are some major technology adaptations that the Indian industry witnessed in 2024:
- Focus on integrating AI tools to streamline production processes and improve efficiency.
- Adapting the latest technological advancements to enhance animation productions. “We upgraded our software infrastructure to support higher-quality visual outputs and better collaboration across remote teams,” shared Vinayan.
- Integration Unreal Engine for CGI. “By leveraging Unreal’s real-time 3D creation capabilities, we can create dynamic and immersive environments with high visual fidelity. This has allowed us to drastically cut down production time and costs, particularly for our 52 x 11 or 26 x 22 international productions, where real-time rendering enables immediate feedback on lighting, textures, and camera angles. It provides greater creative flexibility and faster iteration, reducing reliance on traditional render farms,” pointed out Jayakumar.
- Embracing the USD (Universal Scene Description) pipeline. “USD’s cross-platform compatibility and adaptability make it an ideal choice for handling the increasingly complex VFX workflows. By integrating USD into our pipeline, we are trying to ensure seamless collaboration across departments, improve their efficiency, and streamline the production process,” said Jayakumar.
Projects, plans and new path for 2025
Toonz Media will focus on its collaboration with Culver Max Entertainment Pvt. Ltd. for the CID series, the upcoming release of the feature film Pierre the Pigeon Hawk, and the project Misfit Manor which it is co-producing with Ele Animation.
Agrawal highlighted, “For the Indian animation industry as a whole, the takeaway is clear: greater investment in IP is crucial to reducing dependence on outsourcing, which remains a highly competitive and challenging space. Looking ahead to 2025, the focus must shift toward building original content that showcases the industry’s creative potential and establishes a stronger global presence.”
According to Vinayan, the Indian animation industry is expected to grow. “Mostly, there will be an increased demand for high-quality content, particularly in the children’s segment, and more collaborations between studios and international partners. With continued investment in technology and creative talent, the future looks promising for the industry,” he said.
The rise of gaming and platforms like Roblox offers new avenues for animation content, presenting opportunities for studios to expand into these areas. These trends could lead to more integrated and interactive experiences, blending animation, gaming, and virtual worlds to captivate audiences and enhance engagement.
“I believe that AR will gain traction in the animation industry. As AR technology becomes more accessible and user-friendly, it could open up new opportunities for immersive storytelling and interactive content, especially for children’s programming and interactive learning experiences,” concluded Vinayan.
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