Technology Is Pushing The Animation Industry Towards More Organized Functioning – Kalyani Rane, Cosmos Maya

Founded by internationally acclaimed Indian filmmakers Ketan Mehta and Deepa Sahi, Cosmos-Maya is a Singapore and India-based animation company that produces high-quality 2D and  3D animated content primarily focusing on creating IP in the kids’ animation space. The studio presently has 18 shows on air and 10 in production, including four finished  European co-production series & an International Animation Feature Film, ‘Dogtanian and the Three  Muskehounds’. 

Kalyani Rane, Chief Financial Officer, Cosmos Maya talks to Siddharth Shankar from BWBusinessworld about the Indian Animation Industry, Perception, Growth opportunities, New technologies and Future plans. 

Excerpts

COVID has disrupted almost all the sectors, how has the pandemic affected the animation industry?

In a strange way, Covid had been a boon for the animation Industry. Animation as a business has taken an upward turn in the pandemic because WFH was manageable unlike Live Action and the importance of entertainment has increased in the current times. It also blends very well with live-action. The audience watching live-action is appreciative of the VFX/animation used in the film. The growth of this industry is seen by way of growth in viewership, and the growth in popularity of various OTT platforms. People need the entertainment to keep their stress at bay. Kids are now digitally exposed, and parents are monitoring what they see. If I have to talk about Cosmos Maya IP’s these are characters that are part of kids’ lives and they influence them positively.

What is the perception of Indian Animation industry? and how can this sector present a lucrative opportunity for investors?

Entertainment, an essential:

• General time spent on TV / OTT has increased more than 25% in case of adults and significantly so for kids. No one had deduced kids would be home for so long.
• Substantial increase in viewership and subscriptions. All segments of animation industry are showing double digit growth.

Increase in the market size:

• Dedicated kids’ TV channels are mushrooming in India which is the biggest indication of the market demand for the category here, especially considering that TV isn’t growing as much in the other evolved, western markets.
• Similarly, OTT platforms are adding dedicated kids’ tabs, with kid centric platforms are popping up too. Kids’ tabs are gaining focus because OTT plyers have understood that while adult-oriented content drives subscription, kids’ content offers the stickiness which is as important and has gained greater momentum in the post pandemic world.
• Animation blends well with live action content and is also substituting it in many cases. Need gaps of live action due to human limitations are now filled by animation, especially in a post pandemic world.
• Rising demand of animated content by ed-tech clients will provide huge growth to animation, as all of them are using animation to make study material more relevant and engaging.

From an investor’s Perspective: 

• There is substantial increase in consumption of Indian animated content. India has ample talent and has great potential to produce quality animation locally. As consumption is already on surge, and cost of local resources working on animation is comparatively cheaper, it’s profitable, and sustainable. 
• Growth which is scalable, profitable, and sustainable makes it lucrative for investor.     Company like Cosmos – maya, who has given 4X returns to investors and that too multiple times, has proved time and again that Animation is done in a wise manner, can guarantee profitable exit to investor. Reward is high even with low risk. 
• It’s not a capital-intensive business, hence it doesn’t require much upfront investment. Models like freelancing, retainers, and WFH are mutually acceptable, turning major costs into variable costs. This makes PNL more versatile and reliable.
• An animation business in India just needs working capital funding as initial fuel, and then it runs like well-oiled machinery. IP production keeps giving returns in a cascading manner, claiming good valuation multiples. Maybe we’ll see some IPOs in the animation Industry soon.

2D 3D animation-based content has seen immense growth in the last decade globally, where do you see the industry going in this decade?

Surge seen in the industry during Covid has opened many doors of opportunity for the industry. In coming times industry will grow multifold, and various factors will be responsible for it. It will be interesting to see how the industry evolves.

Animation business - moving towards a more mature phase:

• Mergers and Acquisitions of smaller studios into bigger players, Indian Giants joining hands and investing into global studios or vis-à-vis. Consolidation will also prove helpful for the industry. 
• Companies like ours are setting trends by repeatedly giving extremely profitable exists to investors, raising general interest of investors for this sector. Infusions by good investors will definitely give good push to the sector.

Animation as a career becoming a popular choice: 

The animation industry used to face a talent scarcity. However, there’s a greater social acceptance for animation as a career option and in the next few years, talent pool will be larger. There is lot of awareness in young students and they are seeking animation as a career option.

The government may extend support: 

As it happens in Europe, Canada, or Asian countries like Malaysia, Korea, Singapore; Indian Government can design subsidies for the animation industry. As it’s a known fact that growth in this industry can contribute immensely towards the economy.

The new technologies coming, how is it changing the animation industry?

In animation, quality and timely execution at affordable costs are essential. Cloud technologies, production tracking, cloud rigging, etc. are making it feasible and reliable. Technology is pushing the industry towards more organized functioning. There is a huge demand for content, and without the use of the right technology support, efficient execution is not possible. AR/VR combined with VFX and Animation can completely turn around the vision of the animation industry. Animation will be ready to make every dream a visual reality. 

While we know, Cosmos Maya presently has 18 shows on air, any content you are working on for the international markets?

It would be a bit too soon to get into details about the same but yes, a structured global growth plan is being hatched out for Cosmos-Maya right now. The holy grail for the entertainment business is North America and the key focus is out there while further entrenching CM's footprints into Europe. More details will be shared at the right time. International markets are exciting as it opens up a new big door of opportunities. We will be making wise decisions taking in consideration financial viability and brand building. 

From the start of the decade till now, what changes have you seen in the animation industry?

Animation Industry is becoming more organized and has developed financial awareness over time. It has struggled a bit to cater to rising demand, due to scarcity of resources, lack of technology advancement, thin margins but now that picture is changing fast. P&Ls are becoming more viable with versatile working models, investors are showing interest, the government is keenly observing the performance, and the talent pool is becoming richer, making it visible that animation is a gold mine to be explored.

What are your expansion plans?

Cosmos Maya will grow organically and also inorganically. It will further substantiate and hold on to its leadership position in various ways. We will reveal details at the right time.