Cost pressures push special effects outsourcing to India

Cost pressures push special effects outsourcing to India
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First Published: Thu, Jun 18 2009. 09 49 PM IST

Offshore expertise: A special effects artist works at EyeQube studio in Mumbai. Such projects are up to 40% cheaper in India than in the US. Gautam Singh / AP
Offshore expertise: A special effects artist works at EyeQube studio in Mumbai. Such projects are up to 40% cheaper in India than in the US. Gautam Singh / AP
Updated: Thu, Jun 18 2009. 09 49 PM IST
Mumbai: Outsourcing to India, long dominated by software engineering and back-office work, is expanding in new terrain: special effects for movies.
India’s rise comes at a difficult time for US special effects outfits, some of which have buckled as the 2008 Los Angeles writers strike cut productions and the financial crisis curtailed financing. Executives in India say cost pressures are pushing studios to send more work to India, where special effects projects are up to 40% cheaper than in the US.
Offshore expertise: A special effects artist works at EyeQube studio in Mumbai. Such projects are up to 40% cheaper in India than in the US. Gautam Singh / AP
To be sure, Indian shops are, for now, minor players. Hollywood’s special effects industry is still dominated by US companies such as Industrial Light and Magic. Production standards are generally lower in India, and many movie makers still won’t send creative work thousands of kilometres away.
But the distance between Hollywood and Bollywood is narrowing, and many say it’s only a matter of time before the gap in skills, trust and quality is closed. The domestic market is also maturing as Indian audiences develop a taste for high-tech Hindi flicks.
“Economic conditions are playing out favourably for us,” said S. Nagarajan, the chief operating officer of Visual Computing Labs, based in Mumbai, the visual effects and animation unit of Tata Elxsi, one of India’s most prominent studios. “People are more willing to experiment.”
His company, one of 18 special effects studios that worked on Spider-Man 3, has billed as much in the first three months of this year as it did in nine months last year, he said.
So far, most work Indian companies have done is mid-level rotoscoping and compositing, which allow film makers to blend complex shots.
In the last few years a string of acquisitions and new ventures have started to build the relationships and expertise India needs to become a more of a destination for such higher-end work.
All this is putting pressure on smaller US special effects companies, such as The Orphanage, a San Francisco-based company that shut its doors in February, laying off 100 people.
“The average cost of a shot gets lower and lower every year,” said co-founder Scott Stewart. “If they keep driving the prices down, it will keep driving it offshore. Fewer and fewer artists will be working in the US.”
Even the Orphanage had outsourced work to India to save on costs, he said.
“Everyone’s doing it,” Stewart said. Indian companies have already established themselves doing low-end work and are now moving up the value chain, he added. “They’re starting to get good at everything.”
Ryan Nakashima in Los Angeles contributed to this story.
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First Published: Thu, Jun 18 2009. 09 49 PM IST