IT's SHOWTIME, FOLKS

The media house is looking to make animation films together with Yash Raj Productions.

It's a first for the world's most famous entertainment corporation. The $34.28 billion The Walt Disney Studios has never in the past co-produced animation movies in any country. But then, India is a different world altogether. So, rather than waste time experimenting, Disney has decided to team up with India's biggest movie production house, Yash Raj Productions to make movies. In a statement that now has a familiar ring to it, Chairman of The Walt Disney Studios, Richard Cook says, "India is a strategic market for our studio. With this alliance we hope to develop animation in India, which is still in a nascent stage."

Cook is right when he says animation in India isn't yet big as a genre. Not too many good animation films have been made and the reason for that, according to Smita Jha at Pricewaterhouse Coopers, is the high cost of production. "The few films that have been made had limited budgets," she explains. Disney hopes to change that ;it recently bought the rights for 'Hanuman" probably India's first full length animation feature film made by Percept Pictures and has been able to monetise the property fairly well. Cook believes that if films are made well, there would surely be an audience for it.

While the potential seems enormous, Disney clearly wants an established player to lead the way and that's possibly why it didn't mind that talks with Yash Raj dragged on for over a year. Says Rajesh Jain, who heads the media & entertainment practice at KPMG, "It wants to leverage the cultural and consumer understanding that the Yash Raj group has. While the group may not have made animation films, it understands what kind of content audiences like." Adds Jha, "India is a different market and apart from developing content there are also other things that need to be taken care of such as distribution. So, rather than start from scratch, Disney has decided to partner the best available candidate." As of now the partnership doesn't involve any equity participation by Disney Studios in Yash Raj Productions. But Cook says anything is possible at a later stage.

Disney's decision to rope in a domestic player for the venture is probably the result of its experience in the television space. When it started out in India in 2004, it launched two channels ""Toon Disney and Disney "" but realised about a year down the line that it wasn't getting anywhere. That's when it decided to buy the 'Hungama'channel from UTV and start localising programming, the first time it did so outside of the US. Hungama today is doing well and rival players concede that the move has helped Disney get a larger share of the kids television space. However, the space is dominated by Cartoon Network, belonging to the Turner International India bouquet.

Despite investing in merchandising which is necessary to push kids' channels, industry watchers feel Disney hasn't made too much money from advertising revenues. Says an executive from a media buying firm, "In spite of such a strong legacy, Disney has not really been able to scale up, whereas Cartoon Network has done a reasonably good job." To be fair to Disney, the kids space is crowded "" there are six players "" and therefore keenly competitive. Moreover, as media buyers point out, "There is today, unfortunately, a limited amount of money to chase in terms of the pool of advertising revenues."

That should not be the case for animation films. Apart from the box office, producers today have several revenue streams in the television and also home video marketthat they can tap. With DTH services and broadband now available, the market for such films should only grow. That apart, merchandise too can be a moneyspinner. The films, says Cook, will be made mainly for Indian audiences""the first one, based on the story of a dog's life on the streets of Mumbai, will be called 'Roadside Romeo'. Walt Disney would have approved.