The global digital animation industry is poised to grow to $70 billion by this year. The Indian animation industry is expected to reach $15 billion by 2008. Big numbers, pointing to India's next big outsourcing boom. Labor arbitrage numbers are absolutely fantastic: $125/hour in the US versus $25/hour in India for animators. $75 Million to $175 Million for a full-length features film in the US versus $1-$15 Million in India.

As in the software industry, much of the growth is driven by off-shoring and contract services. Original productions are still very rare, although this month, an animation feature called Hanuman has been released by Sahara India Mass Communication and Percept India in association with Silvertoons. Hanuman is the Hindu monkey god, a superhero of sorts who can move mountains, eat the moon, fly (of course) ...

The quality of indigenous animation films have traditionally been quite pathetic, because of huge budget constraints. Networks pay in the range of $500-$1500 per 20-25 minute episode of an animation TV series, where it costs a good $5,000-$10,000 per minute of finished animation, bringing the cost of that episode to $100k+. The economics of television, as it stands, does not work, and need to be re-engineered, if the animation channels need to continue broadcasting quality productions.

Film economics, on the other hand, DOES work. $1- $5 Million is still a relatively low budget film, and if India can develop enough sophistication in story-telling, direction and animation, I see this as a very viable route to attempt to build a genre a la the Japanese Anime. Princess Mononoke, the crown jewel of this genre had a production budget of $20 Million, and grossed $150 Million+ worldwide. It was, needless to say, enormously successful in Japan, first, but also grossed a decent $2.3 Million in the US (dubbed in English).

So, for India, the goal should be to develop a genre like Anime with deep and exciting plots, exotic imagery and ambience, make the films successful in India first, and then market abroad. The film economics can be extremely compelling.