"Crest to increase television presence" : AK Madhavan-Crest Communications' international business head

Crest Communications Ltd, one of the leaders in 3D animation in India, has big plans for the future with a number of major projects on the anvil. Crest was incorporated in May 1990 and operations began in 1991. The company's main business is 2D and 3D animation and graphic services for ad films, feature films and TV serials. Crest has received several awards for the quality of its work and service. It has recently declared itself a debt-free company and plans to fund all upcoming projects through internal resources. met A K Madhavan, senior vice president international business for a lowdown on the company's plans. Excerpts from the interview:

In the genre of animation,where is crest concentrating its efforts?

Crest is more into 3D than 2D animation at this point and though we do a lot of 2D work, it is in 3D that we are concentrating our efforts.

Any particular reason for that?

While the animation industry here is growing at a tremendous pace, nobody has seen real results as yet. The industry is still finding its feet. And if we look at 3D markets, they are growing in geometric progression at a rate two to three times faster than 2D markets.

If no one has seen results as yet, is the effort really worth it?

In this business, revenues could get delayed but there is almost unlimited shelf life of good products. Worthwhile animation, whether 2D or 3D, is something that will never become dated because there will always be an audience for it.

Could you elaborate on why you feel no one has seen results in India?

Animation costs for a half hour episode work out to around Rs five million and no channel will pay that kind of money. The immediate returns on a hit soap are much higher. Actually, the Indian and Asian markets have not matured as yet so all of us are looking to the west to sell our products.

Wouldn't the same logic apply there also?At least for a producer of animation shows?

There's a huge difference in the West, which is why we say that markets there are matured. Take an example of a show like the The Simpsons. A half-hour episode costs $1.8 million. But they still manage gross profits of $2 million a month for a show that is aired once a week.

The production costs seem a tad high, don't they? It's not as if the cartooning is very elaborate or anything.

That's true but the real costs for a show like The Simpsons are from voice casting and scripting. The cartooning itself is nothing extraordinary.

Leave aside The Simpsons, which is in a different league, what are the average costs of making a half-hour episode in the US?

The cost breakup in the US is typically $200,000 to $400,000. The same quality of work in India can be achieved at $50,000. Basically, the principle applied in the Asian markets, and that includes India, is of sweatshops.

But even here , it is countries like the Philippines and Vietnam that are dominating. So where does India stand in all this?

That is the problem when you work within the sweatshop formula. There will always be someone who can provide the same thing at a lesser cost. We have to try and get out of this and create quality products for which there will always be takers.

That is what the world markets really need. The problem in India is that we lack schools that can churn out individuals with the required skill levels. At Crest, we are trying to get around that by conducting in-house training programmes on a regular basis.

Talking of skills sets, Crest was supposed to have signed a merger deal with the American company Rich Animation. Has the deal gone through?

It's a 100 per cent acquisition really. The buyout was achieved at a cost of $2 million and was completed in February. The American company is now called Rich Crest Animation.

What drew you to Rich Animation?

The main attraction was that it had the experience in making full length animation movies. It has made four till date. The Swan Princess and The King and I were Rich Animation products.

Wasn't The King and I a feature film where Jodie Foster played the lead?

The Rich Animation film happened to be released around the same time as Foster's film, but it was certainly a different one.

If the company is so good, a $2 million price tag seems really low.The Pentamedia buyout of American company film Roman is reportedly going through at a cost of Rs 15 million.And why was Rich Animation up for sale in the first place?

As far as Rich Animation goes, all I can say is that we were really lucky. The parent company Nest Entertainment decided to get into the Internet business in a big way sometime in April last year which is why they put it up for sale. Everything just fell into place, really speaking.

And as for the Pentamedia deal, I think they are having some problems, so I have my reservations about the sale going through.

There were reports that Crest and Rich Animation were working on a $20 million 3D movie and aiming for a Spring 2002 release. What's happening on that front?

The budget has now been upped to $40 million and we are looking at a Spring 2003 release. We are still in pre-production work. We are in the final stages of talks with a Hollywood major and expect production to start in June 2002. We will be signing a completion bond with the studio to complete the film within 104 weeks.

What is the film about?

It is an action-cum-animation film set in a car plant with the plant's robots as the main protagonists. We're quite excited about the project.

What about television? What sort of work are you doing in that field? Crest is a fairly new entrant into television programming but we are planning to increase our presence here. We have done three serials till now, but none have been animation based. They are Mere Angane Mein, a sitcom on Sony Entertainment Television; Meri Marzi, a chat show for tweens (nine to 14-year-olds) on Doordarshan Metro. And Purush Kshetra on Zee TV which was hosted by Kiron Kher and modelled on the lines of Oprah Winfrey's celebrated talk show.

What are your forthcoming projects?

At present, Crest is working on the pilot of a game show for children which will have a high level of interactivity as well as technological innovations. An idea being explored is to use phone lines not only for calling in, but also to allow a participant to play using the keys on his phone instrument as a game console. For this, Crest is in contact with national telephone services provider MTNL.

Do you plan to get into TV production in a bigger way?

We have set ourselves a target of having six programmes on air before the end of 2001.

What kind of projects are you looking at?

Of the six projects we are planning, two will be high quality products with the kind of production values seen in the critically acclaimed TV series Malgudi Days. The other four would be your average bread and butter variety of soaps and sitcoms, the kind which are proliferating across the small screen at present.

What are the costs involved?

The top rung series will cost in the region of Rs 600,000 per half hour episode, while the other four will cost between Rs 2,00,000 and Rs 3,00,000 per half hour episode.

With all these new projects, are you expanding your operations?

On the animation front, we are in the process of expanding from 40 to 100 graphic stations.

And how are you as far as funds go? The Crest scrip has been mauled in recent times and Kotak Mahindra has come out on CNBC saying a major reason for this was that the company had too many debtors.

If you're taking about our share value, I think the bourses have been bad for everyone. As for the Kotak Mahindra quote, we had responded to them immediately afterwards and asked them to corroborate their statement. Which they failed to do.

For the record, I would like to state that Crest is a debt free company. There was a period where we faced financial difficulties and had problems servicing our outstanding loans, but we are over that now.

Funds for all upcoming projects will be raised through internal resources.

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