The Hindu Business Line : That's the spirit!

QUITE often the hard work that goes into animation is overlooked as a minor detail should the film succeed, and forgotten without a second glance, if the box office verdict is failure.

It's the stuff of craft and like all good craftsmen, animation too is tucked away in the bylanes of anonymity.

So, for the craft and its practitioners, it may have been logical that one of the real instances of the Indian entertainment industry graduating to the global league should come from a small, Rs 29-crore company.

Crest Animation Studios recently announced that its 87 per cent-owned US subsidiary RichCrest had entered into the co-production and co-financing of three animated feature films with Lions Gate Entertainment, an independent producer and distributor of motion picture, television, home entertainment, family entertainment and video-on-demand content.

"This is a significant milestone for Crest and a pioneering feat for the Indian animation industry," Seemha Ramanna, Managing Director, Crest Animation, says. While India is still largely associated with strengths in 2D animation, Crest — one of the early entrants in the business — had gone ahead and focused on 3D work. 3D animation is done with the help of digital computers and specialised 3D software.

Crest had been steadily inching its way up in the world of Computer Generated Imaging (CGI). At present, only five studios are involved globally in 3D animation feature films — Pixar, Dreamworks, DNA, Bluesky and RichCrest.

Over the last 10 years, 15 3D animation feature films have been made. Some of the more recent releases have raced alongside mainstream Hollywood films for topping first-week collections at the box office. In a sign of the growing marketability of the genre, four of these 15 films were produced in the first five years; the remaining five years saw 11 films released. An overwhelming 85 per cent of the market for such films is constituted by the US and Europe. Typically, it costs anywhere between $55 million and $90 million, to produce a 3D-animated film. Notwithstanding the perception that animated films are not real cinema, that's a big figure when compared to budgets in the Indian film industry and certainly in the medium range, even by Hollywood standards.

Being an Indian company with all the cost advantages associated with the country, Crest does have cost to its advantage as it competes with established studios in the business. Production costs can be as low as 35 per cent of quotes abroad, when done in India.

Like others of its ilk striving to put a film under its name on the global box office, Crest too was for long doing outsourced work from international producers. In this, it had to move up the rungs of the 3D animation industry — from work for television, to DVDs and now, a break-through into films.

In television and DVDs, the company progressively upped its competence to cover the entire spectrum of production, although it never got around to making original content or owning that most bankable asset of every craftsman — the Intellectual Property Rights (IPR) for his work. Which is why the understanding with Lions Gate Entertainment, disclosed on August 25, is special to Crest. For the first time, it has a deal that promises 50 per cent ownership of IPR. Having a library of original work matters much for the valuation of creative companies, like those engaged in animation. The Lions Gate agreement will be a start. IPRs also assume importance for 3D animation films, as they are then able to garner revenues beyond box office collection.

"Box office accounts for only 35 per cent of a 3D animation film's total revenues,'' says A.K. Madhavan, CEO, Crest Animation. "With this deal, we do everything from start to finish. We have to move to the next level of deliverables." The feature film agreement covers three films. Lions Gate will distribute the films and their derivative works such as sequel, video games, television serials and merchandising worldwide, except in India, where the rights are vested with RichCrest.

Both companies will share cost of production and profit, equally. It may appear that shared revenue and profit is a poor second to the ideal situation of both accruing full to the creator. But according to Vinayak Purohit, Chief Financial Officer, Crest Animation, every animation company has traditionally followed a unique revenue model and Crest has a good deal on its hands. Even Pixar, the biggest player in animated feature films globally, has to share earnings with its distributor, Disney. The first film under the Crest-Lions Gate deal will be Sylvester And The Magic Pebble, based on the Caldecott Medal-winning story by the creator of the blockbuster Shrek. A second, currently untitled, feature film is in development while the third project will be identified in the future. It has been proposed that RichCrest will do the complete CGI-production of all the films in conjunction with its Indian holding company. Simply put, that means Crest's studios are headed for busy times. Crest will be adding another 150 animators to its existing team of 350 animators. A further intake of 150 animators is planned for next year.

"There is tremendous growth potential for quality, CGI feature films in the family entertainment space,'' says Ken Katsumoto, Executive Vice-President, Lions Gate Family Entertainment. All of which should be good news for craftsmen. Limelight is sweet when one comes from anonymity, and returns to its peace.

eworld@thehindu.co.in

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