Animation on licensing mode

Animation has become the talk of the town with children’s properties, contributing $75-100 million for retail sales in India. Rajiv Chilaka, Founder and Managing Director, Green Gold Animation, shares his experience in the present market.

Over the last three years, the licensing and merchandising (L&M) business in the country has been growing at more than 50 per cent coupled with the total character licensing sales in India to be estimated at Rs 500 crore. Popular comic character licensing has become an effective mode for giving a kick to the merchandise sales across the country and abroad.

We can refer to a couple of examples in this regard. The character of Mickey and Minnie from Disney’s stable alone generate 43 per cent of its revenue. The Popeye character alone generates sales of $2 billion annually, indicating the prospect of licensing business. Dubai-based SpaceToon Media’s Kids Media India has launched licensing and merchandising business in India and SAARC countries. Kids Media has been appointed as the agent of the Hong Kong registered Animation International Ltd, which is the licensor for Doraemon and other well-known media properties, and licensing partner of World Wrestling Entertainment for its consumer products.

Rajiv Chilaka, Founder and Managing Director, Green Gold Animation, says, “I’m still fresh with the memories of the first day of airing of Chhota Bheem’s first episode on 6th April 2008 on Pogo. Little did we know that Chhota Bheem was going to be a life changing event for all of us at Green Gold.  Since then, time has flown by for us and not a day has gone by without Chhota Bheem, which has become a household name in India.”

“Prior to making Chhota Bheem, our company has produced animated shows like Vikram Betal and Krishna, four-part movie series, for Cartoon Network. Currently we are producing the second season of Krishna and Balram series for Cartoon Network. Till today we have created over 801 characters for all our series put together,” adds Chilaka.

Concern and expectation

On the negative side, Indian animation movies are yet to do well at the Bollywood box office, and as a result there are not many companies that are willing to take risks in this area.

With kids’ content increasing heavily on television, there is another area which is bound to grow. That is Licensing and Merchandising. Today, there are a very few established players in this area. Also, it is understood that these players (as of now) are pretty much content with distributing or licensing international brands.

However, the next five years in this industry would be very interesting as we will see emergence of new players who would have the first mover advantage for decades to come. Due to the growth of organised retail in India, selling merchandise is set to become far easier than it has been in the past.

Chilaka comments, “The success of Chhota Bheem has created multiple opportunities for our company and that is why we have ventured into newer areas, such as comics, home video and apparel.  We launched Chhota Bheem comics towards the end of 2008, and till today we have published and distributed over 25 titles and 300,000 numbers in all.” These comics are available in all the metros and tier II cities and currently Green Gold Animation is publishing two original comics every month. He further opines, “One day we would like to emulate the world’s largest comic publisher, Marvel, who produces about 80 comics every month. In the past two years we have created a vast distribution network and using the same we have launched DVDs and t-shirts of Chhota Bheem.”

Advantages: Animation and Kids’ content
•   More than 50% of Indian population is below the age of 35 years
•   More than half of television viewers in India today are children below 15 years
•   Today only 6-7 of the 150+ channels are catering to the needs of the children
•   Most kids’ channels have become marketing outlets for brands altogether to India. Even advertisements not related to children, like Insurance, cars, etc, have increased on children’s networks due to the influence of children over their parents.
•   Advertising on kids’ channels has increased by almost 2.5 times in the last 2 years
•   Increase in locally originated programmes for children
•   As majority of the Indian households are single TV households, while kids are watching their favorite kids’ shows, even adults are exposed to advertisements on children’s channels












Animation Revenue Pie

The above is an estimated ‘Animation Revenue Pie’ which illustrates various sources of income possible for a company that owns an animation property. Many Indian companies are struggling to make both ends meet as pretty much the L&M pie is missing from the Indian Animation Scenario. But this trend is changing very fast and soon this would be a big plus for companies operating in this space.

Offer in store

Indian animation industry is expected to touch USD 1163 million by 2012, against USD 460 million at present, reporting a CAGR of 27 per cent (according to a report prepared by NASSCOM and Ernst & Young). There are now more ways to consume animation content than ever before with more TV channels, increasing and easy accessibility to the Internet, proliferation of mobile devices and increasing popularity of mobile, video and computer games.

When it comes to the animation sector, India has a lot to offer for its rich heritage of mythology that can always serve as interesting content. Cost of production is almost 60 per cent lower in this country coupled with English speaking professionals. However, for the lack of training institutes, the country does not produce enough creative skill which can otherwise be utilised in the fields of mobile gaming, merchandising, simulation and special effects in Bollywood.

Also, it must be kept in mind that India needs to build strong defensive measures against piracy of software which went up to 73 per cent in 2006 despite having a well chartered Intellectual Property Right, Patent Acts and Rules. Effective implementation of licensing can surely contribute to stopping these unscrupulous activities.

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