Low cost outsourcing model is not sustainable

Low cost outsourcing model is not sustainable

MUMBAI: Demand for animation content is rising and the sector is expected to grow 30 per cent annually over the next three years, from its current size of $550 million.

"There is also scope for animation companies to exploit from the gaming industry. Besides outsourcing, we are also seeing a surge in domestic demand from kids TV channels and film producers," said DQ Entertainment Tapaas Chakravarti while speaking at Nasscom Animation & Gaming India 2007.


Animation companies in India will have to focus on quality and scalability, other speakers said in a session on "Outsourcing from India.".









"The low-cost model is not sustainable. It is quality that will drive outsourcing in the long term rather than cost," said Paprikas CEO Nandish Domlur.

The animation industry also faces the challenge of creating a large talent pool and needs to transition to IP-driven models over a period of time. There is also a lack of experience in digital product pipelines and project management.


"The services legacy has provided exposure to work flow and processes in the global arena. The hybrid service model should grow into a more matured engagement on co-productions," said Domlur.


Animation companies also should look at acquisitions and equity positioning as scalability becomes an issue.


On the gaming front, it is essential for companies to get into annualised contracts as production schedule can be volatile, cautioned Dhurva CEO Rajesh Rao.


Developing a continuous training structure is also imperative as the industry moves up the value chain, said Lakshya Digital CEO Manvendra Shukul.






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