I wrote an article last Fall called Indian Anime. If you are looking for another multi-billion dollar outsourcing phenomenon, animation could be one.
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.
From a venture investment point of view, the market opportunity is squarely in the outsourcing space, not in title production.
Down the road, this may change, but in the immediate term, Animation is a straightforward labor arbitrage opportunity.
There is, however, a skill-base developing in India of animators and animation film-makers. The first ever Indian animation film, Hanuman has done okay in the box office. There will be an opportunity to move up the value chain, and create India’s own genre like the Japanese Anime in the future.
This segment is a part in the series : Concept Arbitrage