Have you ever heard of a report entitled “Global Animation Industry: Strategies Trends & Opportunities 2012“? It’s a rather serious-sounding affair with a pretty serious price too, €5,350.00 (or $5,000.00…hey, wait a minute, that isn’t right, is it?). Click here if you have any doubt. The report is put out by Research and Markets who bill themselves as “the leading source for international market research and market data”. Basically they provide data for market research purposes, the gist being that you can just pay them for it instead of having to conduct it yourself.
The description contains some fairly bland and generally known information about the industry (“animation is increasingly used in video games, and movies are also increasingly reliant on animation and computer graphic special effects”) but also lists the chapters of the report.
Now while I was all up for reading and reviewing the entire report. sadly $5,000 would create a sort of a cash flow, uh, crisis for me in this quarter and for possibly a good few after that, so instead, let’s see if I can’t come up with my own report instead. I’ll even leave it here for you to read, free! OK, let’s go!
1. Animation Segments
When you think of “animation segments” what do you think of? If you thought theatrical, TV, web and so on, guess what, you’d be wrong hahaha. You see the report considers animation “segments” to be different types of animation. I.e. flash, 2D, 3D CGI and stop-motion are all considered different “segments”.
Hmmm, that doesn’t make a lick of sense to me. Visual FX may get a pass because the nature of that work does differ from traditional animation. So let’s re-write these animation segments shall we:
- Theatrical films
- TV shows
- Shorts
- Web series
- Commercials
- Video games
- Visual FX
- Etc. (educational and so forth)
These are the technique’s main areas of proliferation. They are where you can expect to find it, and they are where you should consider when deciding to create animation.
2. Forecasting Animation Content Demand
This chapter looks at animation demand around the world. Needless to say, things have been on the way up for many years now. North America has a decent market driven by features and TV shows.
Europe remains a very strong market thanks to various indigenous cultures, languages and producers. Of note is the industry in Ireland which has grown from near nothing to worldwide powerhouse in the space of 20 years. Creators in France and Italy continue to produce works for broadcast at home and abroad.
Markets in the far east are a bit trickier to say (at least from my place in the world) but one would assume that markets there, being significantly more developed than those in the west, are staying the course for the most part.
As for forecasting demand? Moderate growth in all markets would be a very conservative estimate.
3. Future Developments
A bit vague this one, but again, it can be broken down into a few easily digestible areas:
- Technology – Expect ever more reliance on technology in all aspects of the business; from design, to animation to distribution. Digital platforms will become ever more a part of the overall content strategy for all ages and genres. It would be wise not to discount the effect it will have.
- Audiences – Audiences won’t change drastically in terms of size (a steady growth as mentioned above is most likely) but I predict a greater number of young adults demanding good quality animated content and who are currently underserved.
- Revenues – As I’ve talked about before, the revenue model for all forms of entertainment has been upended by the internet. Traditional models of licensing to networks and broadcasters is disappearing and will likely be replaced by online viewing or pay per view in some form. Extracting revenues from audiences will command the successful creation and exploitation of a fanbase. That’s fairly tricky to accomplish but is not impossible. Either way, it is how things are going.
4. Animation Software Market Landscape
Much is given to the kinds of software that are available (there’s an entire section dedicated to plug-ins) but the gist of the matter is that software will continue to proliferate, but a gradual consolidation will begin to occur. Simply put, with an increase in complexity comes an increase in the amount of experience that is needed. More experience means higher wages. As a studio, it will become impractical to use software that is not in widespread use. The result is that the larger players (Adobe, Autodesk, Toon Boom, etc.) will corner the market. One will eventually get bought out.
That said, there could always be open source alternatives on offer…
5. Animation Content Creation
You know what’s going to change here? Not much, besides the increased use of digital and online tools for collaboration. Having animators in multiple locations working concurrently is nothing new. It stands to reason that the traditional methods of producing animation will continue in the same vein that they already inhabit. Interestingly enough, ‘ink and paint’ is a section here. Must be a ton of traditional animation being produced somewhere…
6. Audience Dynamics
Because your audience is always moving, eh, eh? No? Oh well, Pixar is the poster child here for obvious reasons. Marketing and audience targeting get a mention, but c’mon, the easiest way to gain an audience is to simply create good quality content. Market research is a great tool, but it will only tell you so much, and it can so easily lead you astray.
Of note here is ‘Pixar’s Technological Advantage‘. While we don’t know what this section says, it is known that whatever advantage they did have has been eroded significantly since the heady days of the 1990s. While Pixar may continue to produce stunningly beautiful films, the competition has worked hard to catch up. Both camps are rapidly approaching photo-realism anyway, so on-screen advantages are mostly moot at this point. Interestingly though, DreamWorks has worked quite diligently to create and foster their IT platforms and software and they may hold an advantage over Pixar in ways that are not visible on-screen.
7. Economics of Animation
This one should be simple right? Make animation > sell for money > profit!
Things aren’t so simple though, and by the looks of things, the report goes into detail about licensing (pay to use my work), merchandising (pay to put my creation on your product), distribution (getting your work seen in different places) and exhibition (getting your animation on TV, DVD, etc). All of these require lengthy and costly negotiations and it’s well worth noting that even with the internet, these systems remain very much in place around the world.
That said, times are changing and it’s very much worth your while to keep in mind alternative options like YouTube and digital distribution. The report does not devote a section to it, but it is absolutely the single most volatile part of making animated content at the moment not only commands attention, it requires it.
Two sections are given over to copyright. Again, what they contain I do not know, but I’ve discussed copyright before and I would caution that relying on copyrights alone as a tool for extracting compensation or revenues is a false hope.
8. Guidelines for Setting up an Animation Studio
Already covered by this post!
9. Managing an Animation Studio
It’s just like any other business! Take in more than you spend, and make sure you have enough money to pay the bills as they arrive. Other than that, there really isn’t something in this section that you could not learn from a good business book down at your local library.
10. Animation Content Outsourcing
Ah, a contentious one this. Should you outsource? Are the cost savings worth the extra hassle? Which country should you outsource too?
These are all questions that will very much depend on the circumstances. It would be unwise to delve into them here.
The Rest
The remainder of the report goes through different global areas such as Europe, the USA, Korea, Japan and so forth with sections on how the industries operate, how large they are, how they do business and so on.
Conclusions
The bottom line is, this report is only worth paying for if you wanted to set up a studio and had absolutely no idea what the heck you are doing. Is it worth $5,000? I don’t think so. (I could easily do a detailed blog post on each and every section with what’s freely available on the internet.)
What does the report prove? Why that there’s a ton of money in animation of course!
Would you pay $5,000 for a report like this? Explain why with a comment!
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