The challenges you should know in producing an animated series these days

(The following is written based on my own experience. It is meant to give independent producers a clear view of the current market situation. The following does not apply to big studios who has deep pockets or with strong commercial channels)

I have attended a Children TV Trade Show in the US recently. At the event, I have met a couple of independent producers. When they presented their IP to me, I am quite surprised that they are still trapped in the old system; expecting the TV licensing fee alone to cover the production cost. (Covering production cost is hard these days. Not to even mention profit. Even DVD market is dead.) One really need a licensing/merchandising strategy. It is no long an option. It is really hard to create an animated TV series or IP just to tell story without a commercial strategy in mind. I know it sounds horrible in a creative stand point. It is really not easy to raise funds these days.

I hope the numbers below will help you. When I first started, I was looking all over for such facts. Its not easy to locate them. This is first hand experience.

When I first step into the US, I heard that you can sell a half an hour episode at USD$50k. In 2007, (my personal experience) I sold at USD$25k per half hour  episode. In 2010, it drops to USD$15k per half hour episode. Now I have buyer in the US asking for free. I am not joking. The market kept changing for the past

Assuming your full production budget is about USD$5M (When I first got into the market, I was told that this budget should be able to recoup just by TV sales) and you are able to sell the TV series to 80 to 100 countries (which is not easy for indie producer) The TV licensing fees add up for these countries  can only cover between 1/4 to 1/5 of your production cost. I have seen independent producers still looking at producing it at USD$7M to USD$9M at the recent trade show. Its going to be very risky.

I am not saying there is no exceptional case. If you have a strong executive producer to back you up, hopefully it could be more. I am just being conservative. Last I heard is that some US OTT channel is looking for original content . They can finance up to 60% of the production cost. This does not include additional dubbing cost of 20 languages. Payment is made in every 3 months and can only come in after you have delivered the entire series. It takes up to 1 year to pay you back the 60%.

Typically, there are only about 6 countries who are able to pay between 4 to 5 digits per half hour episode. Or if you are lucky, you can get a couple of pan regional deals (e.g Pan Asia or Pan Europe Deal) which will also pay about 4 digits per half hour. The rest of the world is paying only 3 digits per half hour especially in Asia. If you add all these numbers up, you will know it is not easy to cover more than USD $4M of your production cost.

Currently, some of the countries that you might be able to get subsidy or investment to offset your cost is Canada, France, Ireland, Malaysia, Korea and China. The rest of the world is not that easy.

One need to have a strategy in place. Your IP needs to be able to engage the sophisticated audience not just on TV. But also on all new digital platforms. Your concept and designs probably needs to have Toys, Computer Games and Themeparks (China) in mind. (Now even Netflix has started to look at Toys now.) There are some  strategic investors looking for good IP to feed their business. These strategic investors will come in right from the beginning. No longer after the release of the series.

Korean producers are very savvy and focus. You will see many of them armed with concept based on the needs of strategic investors. The only challenge is you might end up having too many similar concepts. Hence to challenge your creativity, you need to find a way to create a concept that stands out from the rest.

Don’t get me wrong. I am not discouraging indie producers NOT to work on your own IP. In fact, if your primary survival is servicing (outsource work), you should work on your own IP as competing in prices in outsource work is not the way to go for long term survival. What I am trying to put across here is to change your strategy. Know the market. Build your connections. Get yourself updated with the latest trend. The world economy and technology is shifting its place. In business, there will always be a change. As long as you move with the change. You will survive.

Something I wrote previously. Hope you find it useful as well.



Lessons learnt in Leadership


One of my staff asked me the following question :
“Sometimes what is sad is after training someone to be a good leader, they will go away and move on. Isn’t it tiring to keep training new ones?”

Here are my answer.
“If you are a good leader. Your disciple will stay. If he choose to go, it could be because he does not fully understand the true meaning of the leader’s work. It’s a transition and growing up. Sometimes when he goes out there to see the world and experience himself, he might slowly appreciate what he has learnt from his previous leader. And maybe someday he will return.

If he does not return, then I can only say that I have to work harder as a leader to deserve him. That is how I consistently improve myself.”

Her Second Question:
“When you give a connection to people, do you feel afraid that they will take that potential job away from you?”

Here are my answer.
“In business and entrepreneurship, it’s all about relations and trust. If one is afraid of everything and do not trust anyone, one cannot get things done.

It’s all about integrity of your disciple and the client you choose. And most of all, the values you bring together in a company. I am selective over my long-term clients and most of them became my friends. That is how I run my business.

If your disciple can easily steal your client. Then you know that you are weak in your business relationship and you are weak in evaluating the right person to be chosen as a leader. So you have to pay for the price. The more mistakes you make. The sharper you will be.

Treat people with your heart and sincerity. You will attract the same kind of people to you. (Both client and employee) With this, no one can steal anything from you.”

The IP creations for Animation is growing in China


Chinese companies are slowly moving away from servicing work to IP creations. Not only they are interested in IP creations for their own domestic markets. More and more are looking for overseas partners to learn how to create content for the global market. Though they have started much later than most Asian countries. In terms of learning how to monetize their IP and gain knowledge in licensing & merchandising, they have caught up very fast. In fact, I would say faster than some Asian countries like us who has started even way before them. With their huge capital, population and box office, I anticipate that they will slowly catch up with US. Or might even replace their position eventually.

There is a potential that some of them can become the next Mattel or Hasbro in the East. Or even Turner or Disney who has the entire eco system. Some of the big players already have their own TV stations, Film Production Company, Distribution Network, Toy Manufacturing Arm, Games Companies, Themeparks etc.

The Themepark owners, Toys Manufacturers and Computer Games Companies are especially the ones most interested in IP creations and learning how to globalize it.

I see a trend of them setting up a pre production arm in LA to tap on the best talents there. Or they will buy over good IP from overseas. Then slowly looking at outsourcing their productions to cheaper countries. So that they will focus on IP management, licensing / merchandising and stay at the top of the value chain.

Currently there are still companies who are willing to learn how to globalize their IP. Initially I was estimating maybe in another 5 years time, they probably already learn all they need and will be independent enough to operate on their own. In 5 years time, they might already have the entire value chain setup. But looking at the rate they are progressing, I think maybe another 3 years (Not 5 years anymore) they will be ready and will NOT need others help anymore. So if you are heading to China for opportunity. I say, it has to be NOW or NEVER.

Even if you are not a rich kid, you still can be successful.


During the peak, we grew up to 120 artists with no external investment

Recently I have come across 2 articles. After reading them, I started reflecting my own journey.
“Entrepreneurs Aren’t A Special Breed – They’re Mostly Rich Kids”
“Entrepreneurs don’t have a special gene for risk—they come from families with money”

These are from my own experience. Hope it encourages you. Sometimes the more you have, the more you are afraid to lose. Its only when I lost almost everything. (My bank went zero a few times) Only then I have more courage to do what I am doing. When you are hungry, you will fight to survive. So not being rich is not a disadvantage. It helps you understand some valuable lessons in life.

I didn’t come from a well to do family. My dad was a taxi driver. I didn’t take a single cent from my parents or myself or investor to start my business.
“Reference: How did I first started the studio without external investment?”

Entrepreneurship has taught me some valuable lesson in life. It has taught me to stay clam during crisis. Stay focus, make fast decision and solve problems. Most importantly is the will to keep fighting until you reach your goal.
Reference: It’s the journey that matters. Not the destination.”

I am not saying all rich kids cannot make it. But I have witnessed quite a few in the following situation. When they do not understand the value of money, they tend to anyhow burn their resources. When they face crisis, they tend to give up and go back to their rich parents for more money easily. When they fail, they will just wait to inherit their family business. As they are not hungry enough to fight. When crisis come, their family business will go down with them. So not being rich might sometimes better prepare you for the journey.

In business, not everyday is Sunday. There is always a wind of change. It’s a cycle. One must remain clam. Focus. Hold on tight and fight on through this change. If not, they will be wiped out. Look at the situation now. The current Digital Disruption is changing how business has been running. Those who do not change their business model, will probably have to shut down eventually. (E.g e commerce killing shopping mall etc.)

When I first started, I only manage to borrow a room from my brother’s back office that fits 4 freelancers. In 2007, we eventually move to a 2000 square feet office. One year later, we were fortunate to be able to expand and move to a 10,000 square feet office. From 4 artists, we grew to 120 artists during the peak with no external investment. I am not saying it is easy. I am not saying we are successful. In business, we go up and down like a roller coaster. We have come a long way. But it is possible if you are persistent.

Next year will be our 10th year. The last 10 years, this is what I have learnt. Investment is not what matters most. It’s the strategy, the persistence to hold on and the core team who has the same values to fight side by side with you. (And not to forget a supportive family) Strategy is the key. This reminds me of a Chinese Chancellor (or prime minister) in the Romance of the 3 Kingdoms period known as Zhuge Liang (Kong Ming)  I have learnt a lot from his stories and applied in my business at times. His victory proves one point. Size does not matter. It’s all about strategy. This is how we have come this far.

Hope what I wrote encourages you. Even if you are not a rich kid, you still can be successful. Don’t give up your dreams.

(An abstract from the movie Red Cliff  and the part on Zhuge Liang using his intelligence to win the enemy of a much larger size)

Getting Kickstarter Right With Crowd Funding Tips

Thanks James Phang (Tiny Island Productions – Business Development Manager) for the documentation. Kudos to UCreative and e2i for organizing it! As it is not easy to locate it on facebook group later. I have decided to archive the documentation here since quite a number of people asking it.

Fantastic Sharing Session by Ian Gregory Tan of Witching Hour Studios, which successfully crowdfunded Masquerada: Songs and Shadows to 133% of their Kickstarter target in only 14 days.

Some of the pointers to take note:

1) The most important part of your Kickstarter campaign is actually the pre-campaign. They spent close to a year on that before launching the kickstarter.

2) Get people ready to open their wallets right when the campaign starts. Aim to hit 40% of your goal within 3 days.

3) Get evangelists to promote your game for you. Aim to get major news sites cover your project. Build your fans in the right channels. (In their case, Reddit, NeoGAF and RPGWatch)

4) Look for similar projects to “cross-pollinate”: You talk about their projects, and they talk about yours in updates. Backers are more likely to fund something that falls within the same area of interest.

4) At the end of the campaign, convey your gratitude as personally and sincerely as possible, and keep the updates going. This builds continual goodwill.

5) Even if you fail, there is actually a silver lining: A comeback kid story can work well for your your next kickstarter.

6) Indiegogo is good for raising smaller amounts, and they are more active and aggressive in helping you make sure your campaign succeeds

Met Ian Gregory Tan of Witching Hour Studios today. A good tip he shared. Something I experience myself as well.

For Singaporeans, its better to register a UK company over US company for kickstarter. This is due to the 30% withholding tax.

When you do a service work for a US company, there is no withholding tax. But if you make money from royalty. (Like Kickstarter) you will be tax 30%. For Uk company. There is no 30% withholding tax. Believe we have some agreement with UK.

Something good to note.

How did I first started the studio without external investment?


Many people asked me how I bootstrapped my company when I first started. In fact, for the past 10 years since I first started, I’ve been bootstrapping my business, till today. (Read past article with regards to getting the right investors)

(Reference: Bootstrapping in business means starting a business without external help or capital. Such startups fund the development of their company through internal cash flow and are cautious with their expenses. Generally at the start of a venture, a small amount of money will be set aside for the bootstrap process.)

When you first get started, try to keep your overhead as small as possible. We have tried working from home and linking everyone up via FTP. DIY most things on our own. From assembling our own PC / network to basic decor of the office.

In 2007 – this was the first time – I setup my own permanent facility. I was first offered to produce 3 episodes for an animated series project. The project only lasted for 6 months. (Don’t do it like me. Ha ha. Try to ensure you have a project that can last you for at least 12 months. Else it’s too risky.) That is how I started.


(Our first permanent office at Beach Road. We did all the decor and installation, ourselves)


When I first started, I had maxed out all my 4 credit cards to buy equipment and furniture. 2 of my cards and the 2 cards of my wife. You need to ensure the first 30% down payment can repay your credit card bills and at least last you for 3 months.

2 Important Things to cover: Labour and Rental. (Try to get an office with at least some basic renovation e.g air conditioning to save cost) If there is something simple you can do on your own to save cost, do it. (I have painted the office myself. This time, the network is more complex. Luckily my lead TD helped me to set it up as I have to doubled up on training and line producing.

For Hardware and Software, pay by installment: Else, it will wipe out your down payment. One of the sources I used was Hitachi Credits. This is known as hired purchase. There are also other sources of installment plans in the market. (Its fortunate that 3d software these days allow you to pay by usage per month) There are a lot more resources these days as compared to when I first started.

You need to ensure you control your cash flow well. Else, you will be in trouble later. If your down payment CANNOT cover your initial cost – (3 months rental, 3 months labour cost, 3 months installment for the Hardware / Software) then you know the project budget probably cannot sustain you and it’s too risky to go ahead.

You also need to make sure the second payment comes in at least one month before you use up the down payment. Therefore, make sure you deliver the milestone on time so that you can collect the second payment.


Before you start working on a series, make sure you are familiar with the whole process and pipeline operations. If it is not you, someone senior in the team must have experience in this.


You need to ensure you have a few key people (or your close friends whom you can trust) who can fit into some of these key roles. (Modeling, Texturing, Rigging, Layout, Animation, Effects, Lighting, Compositing, Editing, IT support.)

Besides the above roles, we were also working on story development and pre production. Hence we also needed to ensure we had expertise in these areas.


You cannot suddenly assemble so many people at one go. You probably need to build your network and relations through time. (Read our past article on Maintaining Healthy Relationship with Potential Employees ) So that when the time is right, you know you are ready to assemble the people together. Based on my own experience, you need to have at least 50 artists (from start to finish) to produce 2 episodes a month.

It might sound very straight forward. But one really needs to plan carefully before execution. End of the day, you need to ensure you will not be in debt if the deal does not work out smoothly. Do the above only when you have secured a project.

Hope the above helps you.


Establishing multiple revenue streams

(Working with our partner – Presence Pictures)

In business, we are always facing changes. Whenever there is a change, its like a Tsunami. It wipes out those who cannot hold on when it comes. Entrepreneurship is about persistence. It’s about holding on and staying alive during these times. As long as you are fast to identify the new wave and move with the change. There is a chance to survive.

Diversification is a must for survival. You need to have multiple revenue streams. So that if one stream is facing danger, you have other streams to depend on.

In Tiny Island, we are always looking at new advance technology that has potential to propagate. Technology means nothing without Creativity. We treat Technology like a pencil. By understanding how the technology works, we can creatively create new engaging product.

But R&D in new technology could mean spending indefinitely with no results if not handle with care. This is especially difficult for small companies.

So what we do in Tiny Island is we form an alliance with technological and business partners so that we can provide a variety of services which makes us more competitive.

For Example: We team up with consulting agencies who are strong in locating MNC clients. At our end, we use our creativity to push the technology beyond its boundaries with the help of our technological partners. With this, we provide a list of new media solutions. (Stereoscopic 3d, Auto-stereoscopic 3d, AR, VR, MR etc) to our clients. We leverage each others strength and form a strong consortium. Together, we appears to be a much bigger organisation which helps us engage a variety of new businesses and opening new markets.

Many startups die within the first few years. Or many never even reach the sea and stay within the shore. (Keep depending on local market) We started the company with zero external investment till today. Through this strategy, it helps us pull through 10 years and many tough times. Believe it or not, we are now getting outsource work from countries like Vietnam and China even though we are from Singapore (ranked as the most expensive country in the world) You may wonder why. In order to survive, one need to provide a unique service that others cannot provide. Else why should others pay you a premium if all you can provide is what others can already do and even at a cheaper cost than you. Moving to new market is the key.

A Whole New Opportunity for the Animation Industry

SONY Watchman

When I was a kid, I was told to go to bed by 9pm. When I heard the excitement going on TV in the living room, I can’t help but take a peep through my door to catch  a glimpse of my favour TV show. When my mum caught me doing that, she will kick my butt. ha ha.  At this moment, I secretly hope that someone will someday invent some kind of portable TV like those in the James Bond movie.  So that I can secretly watch TV in my bed.  Who could have imagined that day will come true with the arrival of today’s smart phone.

I was really excited when the first SONY Watchman arrived. (It is something I can never afford at that time)

With the evolution from Stereoscopic 3d to Auto-stereoscopic 3d to Augmented Reality to Virtual Reality to Mixed Reality. I can only say that the audience of the future will no longer consume content like we do. This will open up a whole new business opportunity for the animation industry.

A recent presentation I did by sharing some of the Changing Trends in the Industry. Hope you find it useful.

Do Not Focus Your Business Model on Technology Alone

This is one of the 3d device which we have created our content for initially. With VR goggles coming in so fast. (The VR goggles is almost like an integration of S3D with VR capability) it is obvious that the product will be wiped up in no time.

As our business model is based on creating content for all new devices and platforms. (One format for all usage). We are not that much affected when there is such a change.

This is the danger if one’s business model focus purely on technology but not content creation. Especially if the business model slides into manufacturing. Once someone else creates a better and cheaper device. All the goods that has been manufactured will get stuck in the factory.

This is true with the current VR goggles manufacturers. It is important that they get rid of the device quickly and do not over produce it. Once a new trend of VR goggles comes out (Those that can pair with the smart phones like normal glasses) the current ones will be wiped out.

Another case study. Alpha Animation – (A China Animation Company and Toy Manufacturer) invested in Deepoon. ( A VR goggle manufacturer. And to support the headset, Deepoon has its VR content platform, 3D BoBo. 3D Bobo currently has over 150 titles to download and 10,000+ hours of immersive video content.

Action Movie Kid – Another case study on how one can creates an IP on the side


Remember one of the article I wrote about how one can create its own IP or Brand of their own during their free time.

Here is another case study of how Daniel Hashimoto, an artist who has worked for Dreamworks for 10 years has created a bunch of cool VFX videos of his son James Hashimoto during his free time. Daniel has used his skills to turn his son into a superhero with super cool powers and gadgets in a series of videos called “Action Movie Kid.” These videos have won the hearts of 100 million viewers.

These videos have slowing help to build their fans via all social media platforms. From here, an IP has slowly been established. This has now brought them a whole new opportunities ahead.

Read on below:

(Reference from Wiki) Action Movie Kid is an action web series created by Daniel Hashimoto. It contains his son, James, as the main character. Each clip is a short home movie of James playing, when something dramatic happens: explosions, death-defying feats, and other crazy stunts. All of the dangerous effects and stunts are added in post-production by Daniel Hashimoto, who is a Dreamworks Animation vis-dev artist and freelancer. He uses Adobe After Effects to make the short videos for YouTube.

Building your fans is the key for IP creations. In order to keep the fans interested, one must keep feeding the youtube audience regularly. This is never easy on top of your regular job. Creating VFX from scratch can be costly and time-consuming. It’s interesting to see how Daniel pull it off by creating these clips so quickly on his own by using some clever techniques as well as stock footage.

Besides the above, one can also use a variety of Visual Effects Apps to create these vfx quickly. End of the day, it’s the story that matters. So not to worry too much about the effects.

1) In June 2014,  the Escape Pod Ad Agency contacted Daniel Hashimoto to co-write and direct commercials for their client Toys”R”Us. In addition to writing and directing, Hashimoto also did much of the VFX work along with Eric Miller Animation Studios.

2) There will be a book adaption based on the web series in May 5, 2015. According to James in the book’s trailer, he will fight a gooey monster and claims to be a bedtime story.

3) James and his dad Daniel Hashimoto are now starring in their very own commercial for the 2015 Toyota Sienna   

4) Field Day is a new YouTube channel highlighting some great creators and taking their creativity to the next level. This time, they’ve teamed up with Action Movie Kid, a channel where an animator dad turns his son into an action star using special effects.

5) Fox 2000 and Temple Hill are taking the viral webseries Action Movie Kid to the big screen.

I am sure there are many more opportunities coming up.

You can view the Action Movie Kid Youtube Channel is here.  Hope you feel all inspired now.