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Hollywood forays into India
By Siddharth Srivastava
NEW
DELHI - While an anti-outsourcing bandwagon spreads
across the United States, in India key players are
girding themselves for what is being seen as the next
big opportunity in business and process outsourcing
(BPO) - post-production of Hollywood motion pictures, TV
serials and commercials.
With Hollywood movies
as well as international television networks witnessing
an increasing confluence with information technology
(IT), given the high dose of special effects, animations
that pepper any script, India with its huge IT manpower
and technical expertise is being seen as an ideal
destination. The mantra is the same for every other
business that outsources - low cost (often at a quarter
of that charged by US companies), combined with quality.
A recent study by India's Federation of Indian
Chambers of Commerce and Industry, suggests that
Hollywood's entry into India is a spillover of the
immense image that India enjoys as a software and IT
destination.
Of course the latent talent has
also been honed by India's huge movie industry
(Bollywood, a coinage by BBC that has stuck) that churns
out over 800 films every year. Over 2.5 million people
are involved in this cauldron of creativity with movies
being produced that sink without a trace in the box
office, and others that make an international mark. This
has resulted in cities such as Mumbai, Hyderabad and
Bangalore offering a state-of-the-art mix of software
skills, production and animation expertise and studio
infrastructure. These are being continually upgraded to
meet international standards.
Ramoji Film City
in Hyderabad has been involved in the making of seven
Hollywood motion pictures over the past six years by way
of providing equipment, crew, sets and post-production
facilities. In Mumbai, ace director Subhash Ghai's Mukta
Arts now boasts of worldwide clients. In Delhi, Sandeep
Marwa's Noida-based Film City Studios has struck deals
with several big names across the world.
Till
now, post-production of movies from the US have been
outsourced to locations such as Japan, Taiwan and Korea.
India is the new entrant. As a matter of fact, Asian
countries, too, are passing their work on to India,
given the enormous savings involved.
Going by the
money saved, it is not hard to see why India will make
it as a BPO base for digital content, special effects
and animation. According to estimates, the cost of
outsourcing one hour of animation work to India is
estimated to be close to US$60,000, versus the
$160,000-$200,000 that other leading animation centers
in Korea, Taiwan and the Philippines in Asia charge. In
the US, it would cost between $250,000-$300,000 to
produce one hour of animation.
Though CNN and
movies such as The Matrix are not yet being
produced in India, inquiries are pouring in. Global
entertainment and media giants such as Walt Disney, Fox
Entertainment and Time Warner are looking to tap Indian
resources.
Industry experts say that the
business being generated can be broadly classified into
two areas - the first being special effects, animation,
editing and post-production work at Indian studios,
including work for TV soaps as well as commercials. The
second area includes strategic as well as back office
IT-related work sourced from Indian software giants such
as Infosys, Wipro, TCS and Cognizant to plug specific
requirements that are a result of the convergence era.
These include low-end jobs such as digitizing visual
content to tools for restricting unauthorized online
video and music downloads and protecting misuse of DVDs.
Indian IT companies such as Infosys and Cognizant have
set up exclusive arms to tackle the new media wave and
the attendant technologies needed to tackle areas such
as broadband, and new revenue models of the music
industry.
One of the areas of special interest
to international players is animation and special
effects. Given the time consuming and labor intensive
nature of the job, it is ideal stuff to be routed to
India. With low-cost, high quality engineers available,
India is likely to make a killing in this field. The
total animation outsourcing market in India is valued at
$100 million and it is exploding by 200 percent per
annum, The global computer graphics and animation
industry is expected to touch the $50 billion mark by
2005.
Given the vast business opportunities,
animation companies have mushroomed across India -
Pentamedia Graphics in Chennai, Jadoo Works in
Bangalore, CD India in Chandigarh, UTV Toons in Mumbai,
Moving Picture Company in Film City, Noida, Heart
Entertainment Ltd and Color Chips India in Hyderabad,
and Toonz Animation India in Thiruvananthapuram in
Kerala.
Pentamedia Graphics has implemented 3-D
animation in films such as Sindbad and
Alibaba and its clients include players from
Japan, Korea and France. Kerala-based Toonz Animation
India has clinched a co-production deal with the United
Kingdom-based Treehouse Production for a fun, spooky
animation series. Animation company Color Chips has
entered into an alliance with a South Korean government
agency to explore possibilities of Korean film-makers
tapping low-cost technical expertise in India.
The National Association of Software Service
Companies (Nasscom) estimates that computer graphics,
character animation and data digitization raked in about
$200 million in 2001, with over 27,000 people employed
in this sector. Nasscom forecasts huge revenues from
this segment of the entertainment industry. "By 2008,
the digital content development, animation and
engineering and design industry would touch $1.5
billion, employing about 300,000 people."
With
the intent of tapping a larger chunk of the global
animation business, animation production houses have
formed an association to market India as a center for
outsourcing content. The Animation Producers Association
of India was formally inaugurated late last year.
Indeed, unlike call centers where the verbal
skills of Indians have been questioned by clients as
well as customers, nobody has and can argue against
India's technical expertise, unless the current
anti-outsourcing outrage in the US puts a spanner to
Indian hopes. But given the powerful voice of private
business concerns in the US that favor outsourcing, it
does seem unlikely.
Siddharth
Srivastava is a New Delhi-based journalist
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