The Indian animation industry is poised to attain a market size of Rs.40 billion (US$980 million) within the next four years from the current Rs.13 billion (US$320 million), according to a report by the Federation of Indian Chambers of Commerce and Industry of India (FICCI) and PricewaterhouseCoopers (PWC).

At present, India has about 200 animation, 40VFX and 35 game development studios, but the country needs more workstations to make optimal use of the industry's potential, especially with the fast growth that the Indian animation industry is poised for after the development of some very advanced software.

Indian animation movie production suffered several setbacks in the past. In 1984, renowned artiste Ram Mohan applied to make an animation movie on the Indian epic Ramayana in collaboration with the Japanese filmmaker Yogo Sako.

Mohan was denied permission by the government. The government said that the sanctity of the epic would be lost if a "cartoon film" was made on it. Finally, Mohan went to Japan to make it as he and Sako were determined to present the Ramayana as an animation series.

The movie, "Ramayan" executed under Mohan's leadership made the Western world aware for the first time of talent available in India to make animation movies. Subsequently, India saw an outsourcing boom.

But, due to the high cost involved, together with shortage of manpower and technology, animation movie making stagnated after "Ramayan" was released. Although animation studios sprang up in Mumbai, Bangalore, Hyderabad and Thiruvananthapuram, they were preoccupied with outsourcing work.

Some of them did create story-based animated work, but these were meant only for advertising commercials. It was only since 2000 that corporate houses set their sights on producing animation movies. UTV was the first corporate entity to plan animated versions of the popular "Amar Chitra Katha" series in the 1990s. But the project did not get off the ground.

A decade later Percept Picture Company (PPC) brought to India its Hanuman series of animation features--"Hanuman" and "Hanuman Returns." Made on a budget of about Rs.15 million (US$347,000), PPC's first animation movie "Hanuman" went on to earn Rs.70 million (US$1.75million). PPC followed it up with "Hanuman Returns".

Shemaroo is another Indian company that feels animation is good business. It set up its own animation studio to create animation movies in-house. Though Shemaroo's maiden animation attempt, "Bal Ganesh", did not see the success of PPC's "Hanuman" and "Hanuman Returns" it scored in terms of quality.

"Wait till our next animation production 'Ghatothkach, The Master of Magic' is released. Animation movie-making is still in its infancy. It will take some time for it to stand on its own feet," according to Shemaroo vice-president, Smita Maroo.

While the Indian animation industry has huge business potential and the industry is beginning to scale new heights, however, content development is the need of the hour in order to sustain the growth.

"Indian animation industry is definitely booming and it has a very bright future ahead. However, it needs to mature up its content and reach out to a wider audience," Jean Thoren, president and CEO of Animation Magazine, USA, said while addressing a one day conference entitled "Developing Animation Content: lessons learnt from around the world"--as part of FICCI-Frames 2008, a media and entertainment meet held in Mumbai.

"There's a huge future for animation in India. However, while visually we are achieving perfection we need to focus more on developing the content. We need to consider the responsibility of the characters we are portraying," added Joanna Ferrone, president and founder of the New York-based Honest Entertainment.

"While drawing the characters, one has to realise that these cannot be perfect and that the world is not an even playing field. It's important to draw what's within you," Ferrone added. Honest Entertainment is the creator of popular characters such as Tele Tubbies and Fido Dido among others.

Siddhartha Jain of iRock Media Pvt. Ltd stressed: "Indian animation industry needs to look beyond mythological figures as they are neither catching on with children and nor, definitely, with teens or adults. The industry needs to push creativity both in writing and also in visual. The talent pool needs to be broadened and the current trends need to be understood," he said.

Agreeing Nandish Domlur, CEO, Paprikaas said: "The Indian animation industry is definitely going places but there are challenges. There has to be more quality content catering to a global audience."

To India's advantage, an animation movie can be made on the sub-continent 15 times cheaper than the cost of a Hollywood production. Global players like Walt Disney and Cartoon Network are increasingly looking at the country for content - with the same level of specialisation but at lower cost.

Walt Disney, the Hollywood media giant, is poised to invest Rs.13.14 billion (US$327 million) in two UTV group firms. The last year alone has seen Thomson and DreamWorks invest in Bangalore-based Paprikaas Animation; Disney's pact with Bollywood's top-ranked live-action marquee Yash Raj Films to make three animated films; and UTV commit to build a full-scale animation "pipeline."

Pritish Nandy Communications Ltd (PNC) has struck a Rs.1.8 billion (US$45 million) deal with DQ Entertainment (DQE), one of the world's leading animation and gaming production companies, to co-develop and co-produce six animation movies over the next three to four years.

PNC had also signed a five-movie deal with Motion Pixel Corporation (MPC), a Florida-based animation company that has its animation studios, Estudio Flex, in Costa Rica.

As both international and domestic investors are jostling to grab a share of the pie, it has become critical to address every issue of the trade with utmost care, say experts.

"The absolute key to this business is having strategic partners. It's important to ensure that a property lasts 15, 20, 30 years," said Dean Koocher, managing director of Honest Entertainment.

"While ensuring the revenue stream for such a business, one also needs to look at certain other critical aspects such as territories, which is very important in keeping the product consistent," Koocher said.

Jiggy George, executive director for Cartoon Network Enterprises in India and South Asia, said: "It is very important to understand what revenue model we are looking at, how margins should be defined. The opening of the retail business could prove to be a huge revenue earner for the Indian animation industry."

George also highlighted the retail aspect of the business with a plethora of merchandise such as accessories, apparel, stationery, toys, books and crockery among others, which is growing at 20 per cent year-on-year.

Munjal Shroff, chief operating officer of Graphiti Multimedia, stressed the importance of protecting property. "No doubt, IPR (intellectual property rights) laws in India have become stricter. With a little time and effort, the process may well take one and a half years, one can be sufficiently protected."

Navin Gupta, chief operating officer of the Maya Academy of Advanced Cinematics (MAAC), a Mumbai-based animation training institute, said the Indian animation industry is still hard-pressed for skilled manpower.

Right now, about 300,000 students are undergoing training in animation technology across India. "Most of the professionals are still at the entry level," Gupta said, adding that the way the industry is growing, even these 300,000 professionals would not be enough to handle the work load in the coming years.

UTV's recent deal with Walt Disney Studios is expected to provide a good impetus to take the Indian animation moviemaking sector to a higher level. UTV already has four animation movie projects in the pipeline and a US$20 million co-production deal with Overbrook, Hollywood actor Will Smith's production house.

It is also planning a US$10 million co-production with Porchlight Pictures. "Right now, we have five animation projects on hand," UTV movie production Alpana Mihsra said.

"Twenty years ago the boom began to happen for the software industry in India; now it's animation's turn," says Taapas Chakravarti, who heads DQ Entertainment, which recently listed on the Alternative Investments Market section of the London Stock Exchange, and also chairs FICCI's committee on animation. "The IT industry has brought tremendous organizational and educational skills into this country."

He also points to young Indians' growing interest in nontraditional jobs. "We are not shy anymore. Media has opened the eyes and ears of many Indians, and you don't have to be a civil service clerk to get on in life. You could go to one of those new animation schools."

"Of course, cost is an advantage, but compared to other competitor countries, China or the Philippines, India has a huge talent pool," says animation house Toonz prexy Prabhakaran Jayakumar. "Plus we have English-language skills and a huge entertainment market at home."

Until recently, that home market in India was not a big consumer of Indian animation. But, powered by a mushrooming TV market, domestic demand for animated content is projected to grow at a compound annual rate of 49 per cent for the next four years, according to a recent Nasscom research report. That means animation production for the local market is going to keep pace with the growing overseas demand for Indian toons.

FICCI has been lobbying the government for help in developing the home market. So far support has been slow in coming. Animation was not given "industry status" automatically when the rest of the film sector achieved normality in 2000; protective quotas were not forthcoming; and federal and state governments have been reluctant to fund the establishment of training colleges.

But adversity has strengthened the business. Just as is happening in the steel and software industries, Indian toon companies are now becoming more aggressive in the global hunt for projects and more predatory at the corporate level. DQ this month bought a 20 per cent stake in the French animation house, Method Films.

And it is unlikely to be the last investment by an Indian company.

INDIA'S LONG TRADITION OF ANIMATION

India has produced animation sporadically for 83 years and steadily for more than half that time, facts that are generally buried beneath the hoopla given the popular and gargantuan Bollywood feature film industry.

Animation reaches deep in India's twentieth century history. In 1915, the father of Indian cinema, Dhumdiraj Govind Phalke, produced the animated Agkadyanchi Mouj (Matchsticks' Fun), followed by Laxmicha Galicha (animated coins), and Vichitra Shilpa (inanimate animation). Because the war in Europe had slowed imports, including film, Phalke was forced into making shorter works than features, so he resorted to cartoons and documentaries.

The first Indian animated film with a soundtrack, On a Moonlit Night, was released in 1934, and credited to composer and orchestra leader R.C. Boral. A few others followed, but not frequently or consistently, like Lefanga Langoor (1935), produced by Mohan Bhavani, Superman Myth (1939), directed by G.K. Gokhale and produced by Indian Cartoon Pictures, and Cinema Kadampam (1947), supervised by N.Thanu. However other film cartoons must have been released to justify the existence in the late 1930s of the Mumbai-based Indian Cartoon Pictures.

With the opening of the Cartoon Film Unit, part of the government-operated Films Division, true animation production came to India in 1956. The U.S. International Cooperation Administration helped financially, and former Disney animator Clair H. Weeks, in India as part of a cultural exchange program, provided training. Weeks also collaborated with veteran animator Gokhale to bring out the unit's first work, Banyan Deer, adapted from a Buddhist Janaka story.

The Cartoon Film Unit released a new film biannually until 1962 when production doubled to four films per year. Most of the animated shorts had educational or social themes. However, a few art films were produced and a notable exception was Radha and Krishna (1958).

Based on a Hindu legend and Pahari painting, the film was directed by Shanti Varma and Jehangir S. Bhownagary and received several awards. Pramod Pati also directed art films in animated form. Many prominent animators owed their training to the Cartoon Film Unit; they included V.G. Samant, A.R. Sen, B.R. Shendge, G.M. Saraiya, R.A. Shaikh, R.R. Swamy, V.K. Wankhede, Shaila Paralkar, and Rani D. Rurra, the latter two are among the earliest women in Indian animation.

Outside the Cartoon Film Unit, opportunities opened up for animators in the 1970s and 1980s, with the launching of independent production houses and the National Institute of Design (NID) in Ahmedabad. Chief among independents were Climb Films and Ram Mohan Biographics. The first to specialise in computer animation, Climb Films was started by Bhimsain, a musician and producer-director of live-action film.

Not much formal animation training occurred in India before NID was set up. Initially, in the late 1970s and early 1980s, the institute invited foreign animators such as Weeks, Roger Noake, and others to teach its staff of graphic designers and artists. After these NID trainers (key among them are I.S. Mathur and R.L. Mistry) were taught by the outsiders, a two-year animation workshop program was created to recruit and train new animation faculty, and finally, in 1985, a two and half year advanced entry program for students was developed.

A condensed one-year scheme was added in 1986. Both faculty, especially Mistry, Binita Desai, and Nina Sabnani, and students have produced a body of animated film that emphasized educational and developmental issues such as dowry, road safety, energy, and family planning, as well as artistic and literary themes.

Several organisations (particularly Cartoon Film Unit and National Institute of Design) and individuals (notably Phalke, Gokhale, and Bhownagary) attempted to advance Indian animation during the past eight decades, but without much sustained success.

The situation now seems to be different and more encouraging, at least for two reasons. First, the merger of Ram Mohan Biographics and United Studios Ltd. has made available resources that were missing, namely equipment, space and know-how.

Second, the tie-ins with animation firms elsewhere, either through co-producing or subcontracting, allowed Indian studios to upgrade their technical skills and enlarge their budgets.

This relative obscurity may be about to change as foreign animation houses move further into Asia to mine inexpensive labour pools, as Indian television channels proliferate and demand large chunks of programming, and as domestic studios and training centers open up to serve these and other needs.