off-shoring out-sourcing

Are Indian Animation Studios an Overblown Threat?

Hey Krishna
Screenshot from Indian feature film Hey Krishna

There’s been a lot of talk lately about the rise of India and China as potential global animation superpowers. Many believe that this will be accomplished by quote/unquote ‘stealing’ jobs from other, more expensive countries such as the United States. Other believe that the rise of Indian cinema means that those same Western countries face a deluge of cheap, Indian features coming their way at the expense of local output. Both view are hogwash, but it is undeniable that India is looking to grow its animation industry. They are, however, doing so in a normal way, so much so, that Indian animation studios are really an overblown threat. Here’s a few reasons why.

The Culture Is Too Different

India has a vast, varied culture stretching back thousands of years. Its modern moviemaking industry is very much rooted in this culture and is reflected in pretty much ever film that’s released. Yes, the country shares a colonial history with Britain just like many other countries, but so dose America, Australia and South Africa. Yet the influence of the British is much stronger in those countries than in India, despite the latter gaining independence much, much later.

Film (and animation) is dependent on culture and cultural norms. India’s culture is extremely strong within the country itself as well as within ex-pat and emigrant communities. It is not strong in areas outside of these. Indian films are quite distinct from Western tastes (generally running much longer and dealing with different themes).

The country’s animated output either mimics local cultural norms or attempts to mimic Western ones. It succeeds with the former but falters with the latter. The simple reason is that it is extremely difficult to make a film that completely satisfies all the criteria for being culturally relevant. No, Slumdog Millionaire doesn’t count; it was a Western film with Indian themes but nothing more.

Disney has famously avoided such obstacles for decades by making films that are culturally obtuse; hence all the fairytales. DreamWorks unfortunately learned the hard way with Monsters Vs. Aliens; a film with plenty of gung-ho Americana that didn’t resonate well with foreign audiences.

Indian films will be similar. They will accurately reflect their origin and its culture, but until said culture and its filmmaking norms establish a large following among foreign audience, don’t expect films such as Kiara the Brave to be much of a threat.

It’s Not All About Cost

A ton of focus on India and its competitive abilities have centred on cost, particularly labour cost. The first thing to get out of the way is that it isn’t all about costs. Yes, they play a large role, but ultimately, any studio that decamps to India on the basis of a lower wage rate is playing a mugs game.

The reasons are simple. Wages and salaries are only one cost that must be controlled when making a film or series. Sure, lower wages generally do reflect lower overall cost by virtue of their significant piece of the total cost pie. But they are not the be all and end all and it is unwise to use them as the sole reason to move abroad.

Sure, Indian animators may be cheaper, but there are many differences that must be overcome; cultural, administrative (taxes, permits, etc.), geographical (yes, this still matters in the internet age), and economical (GDP, purchasing power) all play a role in the decision to off-shore work. (These are handily summed up in the CAGE framework.)

Studios looking to move operations to India must look at all of these categories to consider whether it is beneficial to move. At the moment, even though cost is a major factor, the rest combine to make keeping animation US-based attractive for many companies. DreamWorks is moving ahead with its Indian and Chinese studios, but although these will handle some US work, my guess is that the ultimate aim is to get them producing their own content and that American productions are a simple way to get their skills up to speed quickly.

Work ethic also plays a role and even with all the abuses in the US VFX industry, it may stand to reason that Indian animators really are more productive. Maybe their isolated from the internet at work or they just don’t engage in office gossip, I don’t know. But if they can knock out more animation in a week, shouldn’t we be looking to them to discover their secret? I would as it would mean I could keep more people employed in the US.

Think Big as Well As Small

Much of all this ballyhoo has focused on the big players (Disney, DreamWorks, etc.) but not much has been mentioned about the smaller players. There are hundreds if not thousands of them and they certainly face similar pressures to the larger studios in terms of labour costs. What’s different though, is that smaller studios can survive even in areas where larger studios aren’t really viable anymore.

Take for example New York City. Large-scale studios have been absent from the city for quite some time, and yet the industry adapted and remains the hub the animated commercials. It also has a thriving independent scene as evidence by the one-man feature film production team that is Elliot Cowan.

The point is that even though large studios may be the ones who are making the most noise, smaller studios must put up with the same pressures, and they are the ones who will most likely be able to adapt.

Being Close To Home Still Has Its Advantages

For all the talk about the internet and the elimination of borders and distance, the truth is that both obstacles and more (time zones, etc.) continue to have a massive bearing on businesses. Studios are no different and when it comes to the client-studio relationship, sometimes it really is beneficial to have a close on rather than one that spans almost an entire hemisphere.

Email may be quick, but if its the middle of the night where the recipient is, that induces wasted time into the process. That may be tolerable for short projects, but for longer ones, it has the potential to add weeks to the schedule; an intolerable probability for many studios, even with all the cost savings taken into account.

Since the vast majority of animation projects are time-sensitive, for that and other reasons, studios large and small will continue to demand that work be carried out close to home. India may be cheaper, but when time is of the essence, being within arms reach is priceless.

The Crunch: Will Indian Animation Kill Off The American and European Animator

The short answer is no, it won’t.

The long answer is much more dependent on how American and European animators choose to react. If Indian animators constantly up their game and become more productive and proficient in Western culture, then yes, there is a real threat. If not, then Western animators can rest a bit easier. That said, technology is constantly improving to the point where it will be quicker and cheaper to send films to India for the monotonous or automated tasks (rendering, et.c.) Western animators will have to adapt to plying their advantages in their animating skills and abilities. If you can recognise that then you haven’t much to fear.

Animation Operations and Supply Chain Management

Apologies for the profoundly boring title. Knock off the ‘animation’ at the front and you pretty much have the class I’m taking right now. It’s basically about operation decision-making within a company and how to manage the supply chain of a business (don’t get too excited, it’s an entry level course).

Therese Trujillo and Eric Robles of the Frederator/Nickelodeon Production fanboy & ChumChum with the show's schedule behind them.

It got me thinking though, when it comes to animation, the supply chain is somewhat flexible yet inflexible at the same time. It’s flexible in that if you have a bunch of great artists who can crack on with the job and churn out exactly what you’re looking for, then you might be able to squeeze things a wee bit and wrap up early. If you run into delays, that sends a shockwave down the rest of the production pipeline.

Right now, we’re looking at shoes and how they are ordered months in advance of the season for which they are intended. Not too different from animation, eh? The interesting thing about the three cases we’re looking at (Crocs, ECCO and New Balance) is that all three take quite a different approach to their manufacturing and supply chain (outsourced but flexible, vertically integrated and some outsourcing but some manufacturing in the US).

Perhaps surprisingly, animation, really has developed supply chain-wise since the hayday of Hollywood. Things have changed dramatically since then, what with the off-shoring of the actual animation in the 70s and all, but we have gradually seen a return to the rather flexible nature of doing everything in-house.

The introduction of Flash certainly helped as it made animating in the US cost-comparable. Secondly, the internet has meant that the cost benefits of off-shoring or outsourcing can be had without sacrificing the immediacy of working in a studio. Daily production can be supervised closely from the other side of the planet without much effort.

My point is that while the animation industry has not seen the kind of seismic changes (such as off-shoring) in quite a few years, there have nonetheless been advances in how animated films and TV shows are created. Increased efficiencies in this area have only lead to better quality content and lowered (relative) production costs. Just something to keep in mind.