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In November last year, the lights had literally gone off for the Hindi film industry or Bollywood, as it is renowned across the globe. The Federation of Western India Cine Employees (FWICE), the confederation of around twenty-two trade unions representing different vocations, had given a call for a general strike against payment issues for thousands of workers who work for a pittance and are quite ruthlessly exploited by film producers. The effect was unambiguous as almost all the work in the film industry came to a virtual standstill, as no shooting and no post-production took place for almost a week, till the demands of FWICE were not met by the recalcitrant producers.

Sitting at his rather cramped office in Karthik Complex, Mumbai, the general secretary of FWICE, Dinesh Chaturvedi, might be gloating over the success of the general strike that he led. Yet, he must have little realized the domino effect of the strike; as the industry shut down, all the schedules, dates, production, etc, went for a complete toss. Result: an already economically battered Bollywood was caught in an uncanny mess and through the next few months tried to cope with effects of that one week of November. Nonetheless, it could only manage to grow by some 13%, and the collective size of the film entertainment sector touch Rs 109.3 bn mark.

CyberMedia Research                                                                                              DQ Estimates

Most of the post-production studios are based out of Mumbai, the Mecca of Indian film industry, though there are a few smaller ones in Chennai and Hyderabad. However, its not only Bollywood, but increasingly Indian studios are doing more work for Hollywood and other US/Canadian/UK TV programs. Though opportunities for offshore outsourcing are increasing and domestic Indian film industry is also becoming sophisticated, the animation/VFX industry is now grappling with its biggest challenge: the lack of adequately skilled manpower

Yet, while different segments related to the entertainment industry might have suffered because of the tepid box office releases or such action taken by film unions, one segment continued to post a robust and healthy growth of over 20% over last year. It was the animation and visual effects (VFX) industry. The reason why this segment grew in spite of all the trial and tribulations lies in the way the leading players in the industry have adopted fabled global delivery model of the Indian IT industry. Almost all major studiosranging from Prime Focus, VCL (Tata Elxsi), Crest, Rhythm & Huesand even smaller set-ups like AniBrain are collaborating with foreign film makers and working on major Hollywood projects.

Sanjay Singhanias painfully violent story in Ghajini; the curves and racy machinations of Saif-Katrina-Bips-Akshaye in Race; Saif-Kareenas voiceover in Indias first fully 3D animated film Roadside Romeo; were all captured on celluloid and then made to undergo a makeover through VFX

Its quite a regular news now that Indian animators have worked on Hollywood flicks like Superman, Spiderman, Chronicles of Narnia, Terminator 4, etc. In fact, these days for any major film that comes out with massive use of special effects, there is bound to be an Indian connect somewhere. In the past few years, these studios have been able to convince studios and producers in the US and the UK with their work and talent. Hence, even though it might have been a rather staid year for the domestic industry, it was not so for the animation and VFX segment as approximately 60% of the revenues accrue from international work.

Nonetheless, Indian films did indeed require the support and creativity of the animation studios to tell their stories to the audiences. One such case was that of a historical film made by Ashutosh Gowariker on the Mughal emperor Akbar, namely Jodhaa Akbar. As story of the film required mammoth sets and battle sequences, the director enlisted the help of Tata Elxsi or VCL to recreate the grandeur of the Mughal era. In fact, one of the reasons attributed for the films success is its use of VFX and the way it was woven into the story. Besides Jodhaa Akbar, another film that used fairly high amount of special effects was the runaway hit Ghajini. It had numerous sequences and scenes that were brushed on an animators table rather than the studio.

Besides all Hindi and regional films using VFX extensively, steadily there is also a trend of release of completely animated feature length films. As Hanuman proved some years back, there is indeed a significant segment of viewers who dont mind paying for a classily animated film. Sadly, some of the films that have followed up Hanuman, have been damp squibs simply because of shabby animation. Even the fully 3D animated film, Roadside Romeo, was not well received by the audiences. Similarly, Hanuman Returns and Bal Ganesh also faltered on this front. Therefore, it is obvious that the discerning Indian viewer is not going to part with his hard-earned money for anything but the best. And if animated films in India have to succeed, they have to at least match up with Hollywood standards, if not cross them.

Prime Focus seems to be the runaway leader, bagging most of the lucrative films like Race, Tashan, Bachna Ae Haseeno, Singh is King, New York and Love Aaj Kal. However, Shahrukhs Red Chillies could emerge as a front-runner in the future on the back of doing VFX for all of King Khans blockbusters

Meanwhile, animation studios continued to ramp their facilities in the face of competition from other destinations like South Korea, Taiwan, the Philippines, and China, and are thus venturing out overseas. Earlier, Prime Focus had done acquisitions in the UK, and in the last fiscal Pixion acquired two London studiosMen-from-Mars and Molinarefor an undisclosed amount.

The biggest draw continues to be the outsourcing model, with foreign studios sending out labor-intensive work like creation of animation and lip synchronizing, that do not require much creativity. But that is changing as well. For instance, recently animation studio, Anibrain worked on John Woos upcoming flick Red Cliff, creating over 300 VFX shots for the film ranging from complex arrow shots, arrows right from close ups to wide shots of the epic battle sequence.

The biggest challenge still faced by the industry is that it is still categorized as a service industry and not that of a product. Hence, it is essentially replicating the IT industry model, solving problems not really creating IP. The need of the hour is to look in a major way on that front. Even Nagarajan S, COO of VCL opines the same, Indias animation and VFX market is highly fragmented with over 200 players. It is still evolving and nascent. Apart from cost attractiveness, growing domestic demand especially for VFX and increasing international exposure are helping Indias growth rate.

The issue here is two-fold. One is the lack of substantial infrastructure investment in the industry. Even today, a lot of the animation studios, chiefly the small and medium ones, are unable to invest into latest gadgetry, simply because they are not able to source funds from financial and banking institutions on favorable terms. As there is no real government support to the industry, that indeed works out to be a hindrance. The other is the talent pool issue. Even though there are quite a few animation institutes that have cropped up in the past few years, there is still a yawning gap between supply and demand. And even the quality of animators is not really up to global standards because of the poor exposure. This needs to be done by the big studios that could open training institutes and share with their students the learning that accrue from working on foreign projects. If and when these issues are sorted, the animation and VFX industry will surely benefit from the same and probably it would be much better sealed from external exigencies wrought by the likes of Chaturvedi and his trade union FWICE.

CyberMedia Research                 DQ Estimates

The console gaming market recorded the highest growththat would be music to the ears of Microsoft or Sony who have not been able to increase their Xbox or PlayStation sales significantly in India. While, this was a reflection, in general, of India not yet developing a proper gaming culture, the growth in mobile gaming indicates there are opportunities waiting if the right avenues are tapped

Game On?
The irony of the gaming industry is that idespite India being one of the youngest nation in terms of its youth population, the gaming industry has not yet picked up the way it should have. And that too, when India has the second fastest growing mobile market in the world. Gaming per se, is still divided into three segmentsmobile, console, and PC & onlinewith mobile gaming segment still accounting for the largest chunk, followed by console and finally PC & online.

Drawn by the potential of mobile gaming, a lot of small-time bit players had entered into the space some years back. But considering the revenue tussle between content generators and mobile companies, a lot of these outfits are either bleeding to death or have already shut shop. The revenue tussle stems from the fact that mobile companies are not ready to split the revenue generated evenly. Usually operators tend to pocket around 70-80% of the revenues, leaving the rest for the content generator. This has created an absurd situation where only big players in this market are able to survive, since they can generate high volumes to offset low revenue share. Little wonder then, that players like Nazara, Hungama Mobile, and Jump Games control around 80% of the market among themselves. Unless these issues are sorted out, the industry is not going to grow exponentially, even though it has the potential to do so.

On the other hand console gaming, which happens to be the largest money churner globally, is steadily catching up in India. Heavy marketing by both Microsoft and Sony for their consoles has led to a lot of interest and it is shown in increasing sales. Customization is also the key here. For instance, Sonys launch of a game Hanuman, the boy wonder, for PlayStation consoles was quite well received in the market. The biggest challenge to the industry comes from the gray market as the custom duties are fairly high, especially on the software. This has led to a wide gap between legitimate and illegitimate prices. Doing away the disparity and reducing the prices of games will benefit the industry immensely in the coming years, as the urban youth have undoubtedly fallen for console gaming in a major way.

Meanwhile, the PC gaming industry is waiting on the wings to take off as PC penetration increases over a period of time. Already, gaming websites like Zapak, have found favor among users. Concepts like gaming cafes and massively multiplayer online game (MMOG), have found much support from the young net-surfing audience. The biggest problem that still ails the industry is the piracy issue, as still most of the CD Roms circulated are pirated. This can be countered the way the film industry has dealt with itby massive reductions in cover prices.

Nonetheless, for all the trials and tribulations, the gaming industry is sure to boom in the coming days and we just have to thank our young brigade for it.

Shashwat DC
shashwatc@cybermedia.co.in

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