Mumbai: India’s Reliance MediaWorks , part of billionaire Anil Ambani’s group, said on Tuesday it has partnered with U.S.-based Digital Domain Productions giving the Indian media company access to big-ticket visual effects and 3D conversion services projects.
Reacting to the news, shares of Reliance MediaWorks, which the market values at $133.01, rose as much as 2.1% to Rs 130.65. They were trading flat earlier. At 11.29 a.m., the stock was up 1.13% at Rs 129.40.
Digital Domain Productions is part of Digital Domain Media Group Inc, which has filed a preliminary prospectus for a $115 million IPO with U.S. regulators in May.
“From our perspective, ...it’s a game changer. The advantage of working with Digital Domain is that we can take on the large $100 million projects,” chief executive Anil Arjun said.
By itself, Reliance MediaWorks would at the most work on $10-$15 million projects involving a few shots in a film, but with Digital Domain’s partnership, the Indian firm can work on entire films, Arjun said.
Reliance MediaWorks will work on at least 4-5 big-ticket projects with Digital Domain in the first year of partnership, beginning August, he said.
The company will set up a new studio at its media outsourcing unit in the outskirts of Mumbai and add a team of 650 artists for projects with Digital Domain.
“For visual effects, right now we are about 500 people. So we are essentially more than doubling the capacity,” Arjun said.
Reliance MediaWorks, which had a revenue of Rs 836 crore in FY’11, will utilise its internal accruals to bring in the capital expenditure required for the partnership.
Arjun, however, declined to share financial details of the deal.
Digital Domain Productions, which has won Academy Awards for its work, was set up in 1993 by director James Cameron and two business partners.
It has worked on visuals for more than 80 movies, including Titanic, The Curious Case of Benjamin Button and Tron Legacy.
The partnership with Digital Domain, which has studios in Vancouver, San Francisco and Florida, will help Reliance MediaWorks expand its presence in U.S., U.K. and India.
Reliance MediaWorks expects a “substantial” boost in revenue from visual effects and 3D conversion, Arjun said, adding he expects services to form about 50% of the company’s total turnover by FY’13 from 35% as of now.
Over the years, India has become a viable back-end destination for Hollywood films such as “Transformers” and “Avatar,” amid a growing wave of outsourcing post-production special effects to save costs.
The Indian animation and visual effects industry is expected to grow at a compound annual rate of 19%, reaching Rs 559 crore by 2015, according to consultancy KPMG.