Animation Business in China - An Uncertain Outlook

The future for China's animation industry is uncertain.companies who produce their own original content in
Since the late 80s, China has been a choice locationan effort to encourage better production quality. But
for outsourcing 2D cartoon series to due to its lowcreativity is something cultivated by decades of media
cost. But since a couple of years back, the number ofexposure and cultural freedom - both of which China is
outsourced projects to China has decreased, and thelacking in. It did not help that the Chinese government
future for China's animation industry is uncertain asrestricted the broadcast of foreign content on local TV
homegrown animation products are also not bringing instations, effectively restricting the dissemination of
the cash.creativity that these foreign content bring. The
At of this moment, the China economy is rising at amonetary incentives did encourage more companies
meteoric rate and wages are also increasing due toto create their own original content, but did little to
higher standards of living. The higher wages andincrease the quality of the content. They could at best
increasing costs are discouraging some companiessell to China provincial TV stations (which paid very
from outsourcing their work to China. In the wake oflittle or nothing at all) and some low-paying countries
countries like India, Thailand and the Philippinesaround the world, hardly recouping their investments.
competing for a piece of the outsourcing pie, ChinaThe animation companies then looked at licensing
struggles even more as it loses some ground due toopportunities for the characters that appear in their
the language barrier. Most outsourcing companies hailcartoon content as a secondary source of income.
from English speaking territories and the Chinese areHowever, piracy is rampant in China and many
more lacking in English than their Indian and Filipinomanufacturers and consumers do not respect
competitors.intellectual property rights. With a population of 1.4 billion
Due to this, China animation companies figured thatpeople, the merchandising potential is enormous if this
they had to stop depending on outsourced work andsituation can be improved! Strangely though, they
start creating their own intellectual property. If theseem to respect foreign intellectual properties much
foreigners could make their billions through animation,better. Walt Disney, Looney Tunes and some Korean
why couldn't they?brands are apparently enjoying healthy sales over
After all, they have the expertise and experiencethere.
garnered through years of outsourcing work right?At this moment, China animation companies are fighting
Well, not quite right. The problem is - they area tough battle for their survival. Many have collapsed
technically sound but creatively weak! 90% of theamidst failed venture funds and mounting debts. The
cartoons produced by homegrown companies are soones that are surviving are doing just that - surviving. A
bad at their concepts and story-telling that even localsmall handful appear to be doing fine due to a healthy
broadcasters refuse to broadcast them. And of theinflow of outsourced work. But how long can the
10% that are accepted as the 'cream of the crop', onlyoutsourced work keep coming in? And when the tap
some are good enough to sell to the rest of the world.finally stops flowing, will the China homegrown
And by rest of the world, I mean just a handful ofanimation products finally mature enough to make it to
territories.the world market and grow secondary income through
Enter the Chinese government, who came up withlicensing and merchandising?
policies to grant monetary incentives to ChineseOnly time will tell.