Outsourcing fuels boom in Indian animation biz

Industry foresees 24% yearly growth

NEW DELHI -- The Indian animation industry is expected to achieve revenues of $869 million by 2010, according to a report by Indian software and industry services body NASSCOM.

Titled "Animation and Gaming Industry in India -- 2007," the report was released during a two-day conference on the animation and video-game industry that concluded Thursday in the south Indian city of Hyderabad.

According to the report, the animation industry in 2006 clocked revenues of $354 million, a 24% growth from the previous year, with similar annual growth predicted until 2010.

The global animation market, estimated at $59 billion in 2006, is predicted to reach $80 billion by 2010.

The Indian gaming industry, estimated at nearly $48 million in 2006, is expected to cross $424 million by 2010, representing an annual growth rate of 72%. The worldwide gaming market, which stood at $21 billion in 2006, is expected to reach $42 billion by 2010, an annual growth rate of 19%.

NASSCOM president Kiran Karnik said the industry "has taken off in a big way in the last two to three years, owing to recognition of India's IT expertise and creative skills."

The trade group estimates that there are about 300 animation companies employing approximately 12,000 staff and another 3,000 freelancers.

Indian animation growth is largely fueled by projects being outsourced here by overseas companies, which account for exports contributing 70% to total revenues.

But NASSCOM chairman and founder of leading IT company Satyam Computer Services, B. Ramalinga Raju, said that a shift in focus to the local market is a new trend. "The introduction of special effects in (Hindi-language films), and regional and animated films is also providing an impetus to increasing levels of interest in animated movies in the local market," he said.

The success of such homegrown animated features as "Hanuman" and special effects-heavy Bollywood blockbusters like "Krrish" have been a major boost.