Animation Industry in india

The market in India is estimated at USD 500 million in CY 2009 and is expected to grow
at a rate of ~23% p.a. to reach USD 1161 million by 2013. The animation industry in
India has three key segments: Animation Entertainment, Entertainment Visual Effects
(VFX) and Custom Content Development. Among these segments, Custom Content
Development is the largest (~50%) followed by Animation Entertainment and
Entertainment VFX. However, it is the Entertainment VFX segment which is expected to
grow the fastest at ~28% p.a. Almost 70% of the revenues of the Indian Animation
Industry are from the outsourcing work done for the overseas clients. Though the
demand in domestic market is picking up, this trend is expected to continue.

Key drivers expected to influence the growth of Animation Industry in India are:

•  Increased Outsourcing by Overseas Players: The recent economic slowdown has

forced the organizations to increase focus on cost reduction leading to greater
outsourcing to Asian countries, both for Animation entertainment outsourced by overseas
production houses and custom content development outsourced by the corporate sector.

•  Greater outsourcing share for Indian players: Indian players currently command only ~8% of the outsourcing work. This is expected to increase, especially with increasing recognition of the Indian players in terms of providing timely and quality work.

•  Significant evolution of Indian Players: Indian players have moved up the value chain by developing animation content end-to-end. Moreover, the players are increasingly adopting the ‘Co-Production’ model (Revenue-Sharing). This trend opens high revenue opportunities for the Indian players.

•  Increasing usage of Visual Effects in Bollywood is expected to give a boost to the industry. Animation and Gaming Industry in India 5

•  Increasing adoption of e-Learning by corporate sector and higher education institutions in India is a significant opportunity for Indian players, offering ‘Custom Content Development’.