Toon makers under creative stress

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: Animation, the sunshine industry India’s creative minds have pinned great hopes on, is facing a new growth trajectory. Most of the animation studios in the country, big and small, are moving up the value chain, thereby shifting the focus from outsourcing to creation of intellectual property (IP) or home productions. Every studio is trying to get onto this new exciting bandwagon, but the roadblocks remain.

When an Indian studio works on any outsourcing project, it doesn’t pay any separate service tax since the billing is done in dollars or in other foreign currencies. Neither does the studio shoulder the onus of recovering the cost of production even though it pays an accumulative tax to the government at the end of every financial year.

But, no other costs and risks are involved besides that.

However, in terms of creation of intellectual property (IP), the tax regime is the same as it is for any live-action feature film. Besides, a live-action Hindi film can be completed and released within 6-8 months. A 90-minute animation film takes anywhere between one-and-a-half years and two years to complete, depending on the scale of production.

Foreign studios like Pixar, responsible for films like Finding Nemo, sometimes take over six years on a single project. Moreover, in case of a live action film, the producer sells various rights like distribution, music, overseas rights, DVD/home video, merchandising and so on, based on the equity of the actors in the film before its commercial release.

For example, a producer working with Shah Rukh Khan can easily sell these rights much before the completion of the project and, therefore, recover the entire cost of production using an actor’s brand equity. In addition, the producer can approach all the brands that the actor endorses for a seamless integration in film, which will also fetch a few more bucks. Modern retail has opened up various merchandising options for producers. The market was flooded by Om Shanti Om and Saawariya appa-rels, and gifts and novelties, when Shopper’s Stop and Pantaloons floated these products, respectively, during the previous Diwali.