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Hyper, the Chinese white dolphin character created by Hong Kong’s Mass Intellect Ltd, promotes environmental protection
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Zhou Yong quit his job with Shanghai’s Economics and Information Committee, where he had worked for 14 years, to start a business last year. Improbable as it seemed, his new business was an “animation zone” for Chinese mainland creative companies.
Now Director of Animation and Comic Zone Shanghai, Mr Zhou became convinced about the promise of the animation sector based on cultural industry speeches made last year by President Hu Jintao. Mr Zhou believed that the business could work, if it was linked with industrial chains that could generate the profits needed for growth in scale and technical expertise.
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Momo Island is the first Chinese mainland-produced 3D cartoon
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For the past nine years, the mainland’s animation industry has been developing profitably, in varying phases. The lengthy industrial chain for animation-related products – including movies and TV – started becoming lucrative after the first China International Cartoon and Animation Festival, which took place in Hangzhou in 2002.
A 2005 government policy decree to step up development of the animation industry triggered the establishment of industrial parks in several mainland cities developing the animation industry.
To date, more than 70 of these industrial parks have been set up. The Animation Office in the city of Wuxi, Jiangsu Province, reports that it is now second in the country for original productions, based on 2010 results. Hangzhou in Zhejiang Province is the leading animation producer. Both centres produced more than 30,000 minutes of animation last year.
Risky Business
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The Hong Kong-created Cheong Fun Boy cartoon has sparked numerous industry spin-offs
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Animation is a high-risk industry because of keen competition, the growing number of productions and insufficient broadcasting outlets. Before 2004, China had only about 40,000 minutes of accumulated production, according to Jin Delong, Deputy Editor-in-Chief and Director of the Department of Publicity and Administration with the State Administration of Radio, Film and Television.
In 2008, however, cartoons produced independently by Chinese animation studios reached 131,000 minutes. By 2009, 322 TV cartoons totalling 171,800 minutes of animation were produced, up 31 per cent from the year before. The estimated total for last year was 200,000 minutes.
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The Hyper cartoon brand license
has evolved into products such
as watches
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State television China Central TV (CCTV) broadcasts 120 minutes of cartoons a day, said Run Luo, Creative and Production Director of Shanghai Cartoon Digital Technology Development Company (SCDTD). “Even if there are no replays, total broadcast in a year would only be 40,000-plus minutes. Since CCTV receives as much as 200,000 minutes per year, a large number of new cartoons will have no chance of being broadcast,” he said.
If a cartoon does succeed in airing, broadcast fee rights are no more than Rmb2,000 per minute compared to more than Rmb10,000 per minute in production costs.
According to Zhao Baotong, General Manager in the Wuxi office at Fantasia Animation Company, which produced the famed Shaolin Kids animated movie, post-production alone can cost between Rmb20,000 and Rmb30,000 per minute. That excludes pre-production research and creation. In other words, too many productions and reruns don’t translate into profits. Indeed, the more reruns, the higher the losses.
Spin-off Industries
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Hong Kong Talent Shines
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Zhao Baotong of Fantasia Animation Wuxi said there’s a bright future ahead for collaborations between Hong Kong creative talent and mainland firms. With its international perspective and experience, Hong Kong talent, covering creative and commercial production, as well as post-production and distribution, has much to offer to mainland productions.
Several employees in SCDTD’s creative team come from Hong Kong. Mr Luo said his company has taken on a number of well-trained personnel from Hong Kong’s Imagi, producer of the animation film Astro Boy.
Mr Zhou said that Hong Kong players can participate at various levels, including in-brand development, export of mainland creative production and investment in new mainland productions.
Several Hong Kong companies have already penetrated the mainland animation market. The cartoon Hyper, starring a Chinese white dolphin character created by Hong Kong’s Mass Intellect Ltd, was first broadcast by CCTV in 2003 and is still aired in major mainland cities.
Peter Lee, Managing Director of Mass Intellect, said the firm started out mainly in design services, including brand packaging for overseas companies. Besides helping customers such as Microsoft, Lancome, Knorr and Nestlé re-package their products to adapt to the Hong Kong and Southeast Asian markets, it also produced gifts and advertisements.
In 1997, it founded its own brand, Hyper, positioned as a cartoon character that educates viewers about environmental protection. But, despite promotion and widespread recognition, it wasn’t until 2003 that Hyper cartoons were broadcast on CCTV.
Cheong Fun Boy, a cartoon created by another Hong Kong company, Bubble Mon Licensing (International), was broadcast by CCTV in 2010.
Established in 1997, Bubble Mon was originally in animation licensing and was an authorised agent for CCTV cartoons. It was also involved in post-production; including distributing the CCTV cartoon Monkey King to Southeast Asia.
Based on its cooperation with CCTV, Bubble Mon began producing its own cartoon in 2008. Bubble Mon CEO Wilson Lee said that his company created characters out of food items rather than using animals as prototypes.
The main characters in Cheong Fun Boy are Hong Kong food items, such as steamed rice rolls and shao-mai. With the publication of Cheong Fun Boy comic books, Cheong Fun Boy cartoon TV and a new franchised café in Guangdong, Bubble Mon’s business has made the most of diversification.
The Bubble Mon CEO noted the huge mainland animation market, which was worth Rmb80 billion in 2008. He is convinced that Hong Kong talent has what it takes to make a creative splash.
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The big question is how to find a viable business model. To encourage creativity, the Central Government offers subsidies, with some companies fully subsidised. Such a non-commercial approach is described as “all productions but no industry” by Mr Zhou. In just a few months, Animation and Comic Zone Shanghai succeeded in encouraging 100 companies to set up shop.
Thanks to supportive government policies and huge consumer demand for animation, particularly among the post-1980s generation in love with comics, “the spring of the animation industry will soon arrive,” said Mr Zhou.
The advent of new media has also opened additional channels for animation production, with traditional movies and TV now seen on the Internet and via mobile phones. Resident companies in Animation and Comic Zone Shanghai cover a variety of production, ranging from animation theatre and film to online games. They’re also linking up with manufacturers to produce related products.
Some 30 per cent are involved in original production, while 70 per cent are in spin-off industries. Wang Rongrong, Assistant to the General Manager at Shanghai Zhang Jiang Animation Technology Company, said the government’s encouragement has started to pay off.
But technology, such as that related to 3D or Apple’s iPad, is driving growth fuelled mainly by large companies that have the resources to develop and apply new technology. Small firms have to resort to government subsidies. Many production companies, Ms Wang said, are losing money, with only employee passion keeping them going.
Such is the case with cartoons made in the Zhang Jiang park: Expo Story and Super Frog Warrior both drew reasonably good audiences. Super Frog Warrior was budgeted at Rmb100 million, but box-office receipts were a mere Rmb8 million. Despite heavy loss, the production company was still operating, said Ms Wang. The public service platform set up by the industrial park would help it gain exposure through new media and link up with manufacturers to develop spin-off products.
More than Cartoons
Animation studios are trying to survive by expanding into related commercial and educational fields, such as the Shanghai-based SCDTD, which has not received any government subsidy. In the 1990s, the company post-produced and edited commercials, holding 60 per cent of the Shanghai advertising market, including handling commercials for international brands.
SCDTD began creating animation in 2002. In 2004, it completed Momo Island, the first, full 3D cartoon for television. Its production Vicky the Viking was broadcast by European TV stations in 2005 through a French collaboration.
The company this year completed an educational cartoon, targeting three-to-six-years olds. When rushes were presented by Mr Luo to CCTV before the Chinese New Year, the green light was given by the department for film selection, with a first run soon to be scheduled.
For more details on the Chinese mainland market, please see the March 2011 issue of HKTDC Trade Quarterly, which can be ordered at http://bookshop.hktdc.com/.
