It was yet another action-packed year for the Indian entertainment segment! The huge talent crunch did not deter the industry from growing by leaps and bounds and the churn that happened over the year. Whether it was about newer avenues opening up, or about new global partnerships, mergers and acquisitions, VFX and animation, or gaming, it was all perfectly packed up.

While many players forayed into the space, and new partnerships blossomed in the backdrop of the rich prospects forecasted, what was important was the fact that the industry came to be taken much more seriously. All this and much more took the Indian entertainment and gaming industry to an exciting level of maturity. While making inroads into the world of movies and TV broadcasts, visual effects and animation got bigger and better. Gaming too caught up in the race. Looks like the Indian entertainment story has just started to unfold.

As a result of growing confidence in the Indian animation and gaming industry, foreign players increased investments here, while the Indian players looked overseas to expand their fortunes.

The Indian animation industry was abuzz with acquisitions, agreements, and new ventures; with major players like Sony Imageworks and Thomson getting into the space. At the same time Walt Disney and many other players too collaborated with the local animation and VFX players. Many more western shops scouted for serious business here, underlining the fact that India has finally made a place on the world entertainment map.

Animated Times
The sector, which initially struggled to establish a foothold, now consolidated its hold. Currently, there are about 300 animation companies employing 12,000 people, in India, with nearly 3,000 freelancers working in the industry.

During the year, the overall entertainment animation market grew by an estimated 32% over FY 07, indicating steady growth. The movies became more technology-centric. According to industry estimates, there was a 50-60% increase in budget allocation for VFX and animation in the mainstream Bollywood movies. However, what was sad was that it was still a miniscule portion of what Hollywood spends on some of its highest grossers.

The year marked the release of some of the biggest VFX films. Bollywoods first futuristic film, Love Story 2050, had 1,200 special effects shots. Four firms including three major international special effects housesWeta Workshop of New Zealand (Lord of the Rings trilogy, and King Kong), Rising Sun Pictures (Harry Potter, Superman Returns), and John Cox of Australia, executed the special effects for the movie along with Prime Focus.

This years big epic drama, Jodha Akbar was another movie which had a lot of VFX. Visual Computing Labs (VCL), the VFX arm of Tata Elxsi, rendered the visual effects for the movie. There were over 200 shots in the movie, planned during the pre-production in computer-generated imagery (CGI) for the three battle sequences in the movie.

Interestingly, this year there was a deeper involvement of VFX studios right from the script stage. The trend, which had just started off a year before, picked up fast during the year. This led VFX studios to get more involved at the stage of pre-production of the film, as a result bringing up overall quality standards. At the same time, a number of directors have started to understand the significance of using VFX as a tool to significantly add value to the film.

With revenues close to Rs 204 crore for FY 08 Prime Focus continued to be the market leader, followed by VCL at Rs 120 crore. Crest Animation Studios, DQ Entertainment, and Shah Rukh Khans Red Chillies Entertainment were some of the other big players. Pixion, EFX, FutureWorks, Maya Entertainment too contributed to the good health of the industry.

Shah Rukhs Red Chillies was a big slice on the VFX and animation plate of India this year. Given the pace at which Bollywood is expanding and how big budget movies are more the rule than the exception, the technology edge of VFX is definitely brimming with potential. Little wonder that Red Chillies VFX has hived off as a separate business unit.

Entertainment Snapshot: Indias VFX and Animation Industry
The Dream Merchants Company Revenue(inRscrore) Prime Focus 204 Visual Computing Labs 120 Crest Animation Studios 51 DQ Entertainment 92 Red Chillies Entertainment VFX 62
Source: DQ estimates
From a saucy Katrina in Race and a sultry Priyanka in Love Story 2050 to a cool dude Hrithik in Jodha Akbar and six-pack Shah Rukh in Om Shanti Om, VFX was instrumental in spicing up Bollywood like never before. Increasingly, even international projects started coming to Indian shores; the industry is right now at the point where software services was just in the pre Y2K days

Red Chillies, bid not just to pick home productions, like Om Shanti Om, but outside productions, Jhoom Barabar Jhoom, Honeymoon Travels, and Don have been some key projects. The company announced its Go Hollywood agenda and itsplans to produce Indias most expensive movie at Rs 100 crore, to showcase the strength of the subcontinents special effects and animation industries to world cinema.

While Prime Focus too had some exciting moments with films like Race, Sawaariya, Love Story 2050, and Welcome, in its kitty during the year. Its forthcoming ventures include, Ramesh Sippys Chandani Chowk to China, for the first time in association with Warner Bros. Apart from financing and producing the venture, Warner Bros India, is also globally distributing and marketing the film.

VCL too was associated with some big films including, Ta Ra Rum Pum and Aaja Nach Le for Yash Raj Films; Gandhi-My Father for Anil Kapoor Productions; Taare Zameen Par with Aamir Khan and the big hit of 2008, Jodhaa Akbar directed by Ashutosh Gowarikar. There were also some international projects which included the big Hollywood hit of 2007Spiderman 3.

The animation front particularly blossomed with some major collaborations happening there. Walt Disney and Yash Raj Films entered into a tie-up to produce culturally relevant CG Animated features for Indian audiences. The collaboration promises one animated movie release every year.

One of the most notable developments of the year was the spate of animation films announced for the domestic market that were produced or announced for production. By 2011, with the industry expected to nearly grow three times in size and investments, looks like good times for the animation space. Disney is one of the biggest names in animation globally, and the collaboration between the two majors was a landmark event in the Indian animation and entertainment business.

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