TV Animation

The arrival of high speed fibre optic cable in more parts of Africa has opened opportunities for graphic-intensive export businesses in Africa, since developed country clients require rapid access to the production process. This is an historic and remarkable change, in that remoteness from markets is a major reason for competitive disadvantage in exporting faced by most of Africa. Many African countries face very high costs of bringing physical goods to a port, meaning that exports are only competitive if returns to producers are extremely low, among the lowest export incomes in the world.

Now, for the first time in the modern era, the effective distance of African producers from export markets, for a range of digitally transmitted products, has become virtually nil. This is a dramatic levelling of the playing field in international trade competitiveness, perhaps unprecedented in world history.

It will take some creative business thinking to capture the opportunities that high volume data carriage offers Africa. Television animation, as an example, may stimulate some of this thinking.

The worldwide animation market is worth about $50-75bn with a further $100-150bn coming from merchandising. The market has changed dramatically in recent years. Broadcasters’ fees now cover only 10% of production budgets, forcing producers to look at how they can reduce their upfront budgets. Typically, a producer will write, design and story-board the animation show and ask an off-shore company to handle the line production – the colouring, rendering and production of frames.

The artistic skills, IT support and management skills needed for line production exist in a number of African cities that are newly connected with fibre optic cables of large capacity.

Animation production had shifted from the US and Europe to East Asia at much the same time as light manufacturing made the same shift. Creatively as old as film-making, it was a television production industry driven by the US market until the early 1990s. By then, several developing countries had a share of line production, notably South Korea and the Philippines. Regrettably, both countries failed to develop significant creative capacity, so they were dependent on labour cost advantages for a purely price-based export business. Both countries lost market share to China and India throughout the 1990s.

For animation, a phased strategy might be built up from an initial joint venture to provide production capacity for developed country producers in the very cost-sensitive TV production industry. A key element in a long term strategy would be the training and development of creative staff working for an animation studio to become designers. Once a studio has the ability to contribute to the creative element of new animation and the finance to share ownership of rights, it becomes an Intellectual Property owning business, with greater income security.

A joint venture between a foreign creative producer and an African production company could provide a cost-based export business in the short term and a strong base for creative TV and animation work in the mid term. Within Africa, demand currently exists for commercials, television bookends, filmmakers, special effects and education. While there is already some animation capability in a number of African countries, annual incomes of more than $1m is thought to be rare.

Given the size of the global animation market and the potential scale of the business, it would be reasonable to speculate that a country could build export income in the order of $40-100m per year. The impact would be several times higher if several countries or companies also set up animation capacity, as the market is large.

Further opportunities lie in digitally transmitted export products. In the long term, such businesses and industries need to develop creative and design skills to have greater potential and security of income, as true Intellectual Property owners. The export income estimates for this sector are shown at $40-100m per year in the summary tables, but these estimates should be revisited in two to three years time.

Reference materials will be available here shortly.