Producing an animated film based on a localised concept

Since I came back from our last IP seminar in Jakarta, many artists have been writing to me. Asking me business questions about producing animated content based on their localised concept. Some expressed disappointment. Even though their content is of high value, their investors don’t seems to be interested at all.

In general, if your animated content is too localised, you need to make sure that you have a strong domestic market to sustain the animated film. Overseas audience may not understand or appreciate immediately as it takes time for the culture to propagate across the globe. The same idea applies to how the Japanese Anime or Korean Drama grows internationally.

Lets use a Spicy Chilli Crab Analogy to illustrate the idea. If your Chilli Crab is targeted only at Singaporeans. And if you refuse to customise the taste for overseas market. Then you need to make sure you have a strong domestic market to sustain your business. It takes a very long time to establish it locally and accumulate enough foreigners to appreciate the acquired taste before a new worldwide fan base is established. If your domestic market is not strong enough to sustain your business. It will collapse locally even before it starts to grow overseas.
However, there is another way to do this if your local market is too small like Singapore. You can modify the taste so that you can expand your market share by tapping on both domestic and international market at the same time. It’s like making Spicy Chilli Crab for the locals and Sweet Chilli Crab for the Western market at the same time. What Lakon Animasi did for “Pada Suatu Ketika” is interesting. This is what I call Chilli Crab for the Global Market with a strong potential for merchandise.

If you want to make an animated feature film strictly for your own market. First, you need to find out what is the potential box office for both the foreign films and local films in your country.

Lets use Indonesia as a case study:
Indonesia Box Office in 2012

Based on the above link. The estimated potential of the Indonesian box office in 2012 for Live Action Films seems to be USD$1.4M The estimated potential of the Indonesian box office in 2012 for Animated Films seems to be USD$700k. Now lets say you are producing a localised animated film. Without the super marketing budget like the foreign films, do you still think you can hit the above local box office?  Is your local audience supportive towards local content? Does your country has a problem with people downloading pirated films or buying pirated merchandise? All these consideration will affect your bottom line.

In cinema business, 50% goes to cinema rental. 25% to 30% goes to distributor. The remaining goes to advertising and publicity. You are left with very little money. Is this enough to cover your production cost based on the estimated box office returns above? If the answer is YES. Then you have a strong domestic market to support your localised film. If not, then it is a Red Flag to investors. This is a reality check and it is what runs through the investors’ mind. If the money left in the box office is not enough to cover your cost. Then the next question is whether there is any merchandising opportunity based on your current designs. Are your designs merchandise friendly? If you want to produce an animated film to maximise the opportunity, you need to target G Ratings for Children. (Family Entertainment) Not just for Geeks (Otaku) like you and me. ha ha. 😛 This widens the market. Hence you need to understand the kids’ parents. They are the ones who bring their kids to the cinema. Not the kids themselves. You need to ensure the parents feel safe to take their children to watch your animated film. Which in turn drive the merchandise. Can the local merchandise market cover your cost? Do you have a huge population to support sales of merchandise? Is that enough for your investors to consider your project? Your investor might ask whether your animated film can travel overseas to make even more money?

In the past, Japan has a strong domestic market to sustain their localise content. They do not need the global market. Unfortunately that is history now. Their economy is doing down and their market can no longer even sustain the production cost. That is why they need to go global. That is why the new generation of the leadership is to look at creating content for the world.

China on the other hand has a super strong domestic market now. They do not need the world. Hence all content created in China must have some sort of Chinese history or cultural relations if they want their government to support them.

Some Latest Animated Films from China
神笔马良 – The Magical Brush

Little Door Gods – Light Chaser Animation

End of the day, we are still talking about business. If you demonstrate that your animated film has a global potential, investor might feel safer to invest in you. You might not agree with what has been written so far. If your film focus only on art festival and prepared not to make any money, then it is ok. Else you will need to convince the distributors and investors to support your vision where most of their concerns is about making money. You also need to convince cinema chains to exhibit your film in many cinema halls and at the prime time slot. If they have no confident in your animated film, they will rather keep these slots for blockbusters. And exhibit your film in a few cinema halls at bad time slots. This will then hurt your box office sales.


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