How Asian business process outsourcing can help your animation company

How Asian business process outsourcing can help your animation company

The Covid-19 global crisis brought the world to a standstill, and forced the entertainment industry to shut down almost entirely. While local lockdowns and social distancing measures have severely hampered the production of live action shows, the animation sector not only survived the early stages of the pandemic but has flourished. In fact, it has been the sole focus of many studios’ activities throughout the crisis.

The sector was already enjoying a boom, and this is predicted to continue well into the decade. The animation industry was valued at US$270 billion in 2020, and the animation and visual effects market was forecast to increase at a compound annual growth rate (CAGR) of over 9% during the period 2020-2025. This growth is likely to be further accelerated by the Covid-19 crisis.

Many studios have therefore been looking for solutions to their operational challenges, such as how to seek even faster turnaround on productions in order to satisfy the increasing demand. With growth comes cost considerations, and companies tend to look to outsourcing as a cheaper alternative to hiring in-house.

Enter Business Process Outsourcing

Business process outsourcing (BPO) refers to the process of hiring third-party service providers in order to carry out certain standard business functions. The market size for global outsourcing is predicted to reach US$405.6 billion by 2027.

Outsourcing can occur either within or outside the borders of its home country - BPO within the animation industry usually falls into the latter category. For example, a US-based studio might typically outsource production tasks to a business in south-east Asia.

Cost is a primary factor influencing animation outsourcing, though BPO also has many other benefits. It can allow animation studios to turn projects around quicker, and also gives the home organisation access to a wider, international talent pool.

How BPO supports the animation industry

Animation tasks are typically outsourced to where labour costs are less expensive, and so south-east Asia is a natural hub for BPO service providers within this industry. In fact, 90% of all “American” television animation is produced in Asia.

In terms of the animation process, production is the most outsourced stage. The conceptualisation phase is more dependent on culture, and therefore outsourced less often. Currently, most of the work-for-hire or outsourcing projects in south-east Asia come from the USA, Europe, Japan, China and South Korea.

Asian BPO hotspots

Country

Average cost p/h of an animator (converted to USD)

Additional information

China 

$16 

With a large talent pool and growing number of artists, Chinese BPO services are increasing in popularity. China is also increasingly cementing itself as an entertainment focal point, both in terms of homegrown productions and audience demand, and is itself contracting BPO providers in south-ast Asia. 

India 

$25

BPO providers in India boast a strong English-speaking labour force, as well as high-quality technicians with expertise in 2D and 3D animation, as well as Flash. Of the BPO options available in Asia, India is one of the most expensive. 

Indonesia 

$10 (plus bonus)

Indonesian studios tend to have strong 2D specialisms which, along with low labour costs, make them a popular choice for outsourced work.  

Malaysia

$12

As well as carrying out BPO work for larger studios abroad, Malaysia exports more and more local, original animated content, producing popular characters like BoBoiBoy, Didi & Friends, Ejen Ali. 

Philippines

$5 

A combination of good English language skills, familiarity with American culture and humour, widespread international employment experience, and low labour costs, makes the Philippines a very popular choice for BPO services. 

Thailand

$6 (plus bonus)

The Japan External Trade Organisation (JETRO) ranked Thailand 1st place in south-east Asia for animation-related businesses, due to the country’s diverse educational infrastructure and projects designed to promote creativity. 

Vietnam

$8

With a technical workforce that is highly skilled yet low cost, many US studios now have branches or outsourcing studios in Vietnam. 

An overview of total BPO costs 

Organisations typically outsource to save time and money, but don’t forget that you need to invest both in order to kickstart an effective BPO programme. Don’t underestimate the time needed to source the right BPO provider, manage the relationship (usually across different time zones), and constantly monitor to ensure you’re getting what you need from the partnership.

Cost areas to consider:

  • Onboarding, startup and ongoing training - Plan how you will introduce your BPO partners to your studio’s style, practices and processes, as well as associated costs.

  • Contracts - Agree costs for labour, and include any “extras” such as overtime, travel, and time spent attending meetings.

  • Systems and software - Agree who will acquire and maintain the tools both parties will work with, and which party will cover any associated costs. Acquire workflow management tools to ensure deadlines are met, and that the correct processes are always followed.

  • Quality checking - Most studios will have a system already in place before outsourcing. Make sure that any BPO work can feed into this system, and that it doesn’t require extra resources.

Finally, think about how costs will be managed. Consider whether you’d prefer to pay per project, or per animators’ time. And keep in mind that some outsourcing companies have moved to models in which they earn a percentage of savings or revenue. Thorough due diligence, will help you know exactly what you’re signing up to.

Paying BPOs in Asia

After going to the trouble of sourcing BPO services that save on costs, the last thing you want to do is lose money in expensive transfer fees and fluctuating rates when you pay your suppliers.

At CurrencyFair, we help businesses of all sizes save money, save time, and stay in control of their payments to overseas suppliers, contractors and staff in their local currency.

Businesses can send money into their CurrencyFair account in 17 currencies and exchange into 22 currencies including Thai Baht, Indonesian Rupiah, Indian Rupee, Singapore Dollar, Hong Kong Dollar, and Philippine Peso.

Businesses can securely send money to over 150 countries. CurrencyFair is fully licensed and regulated, with a 10-year track record of best-in-class service.

CurrencyFair’s Business Team works with business customers who are exposed to currency fluctuations, offering highly competitive rates so when you launch your BPO relationship you can start saving on costs immediately.

 

            For more insights, read CurrencyFair's Guide to Global Animation Outsourcing:

Download now

 

 

Data sources:

  1. Data captured in 2018 https://www.statista.com/statistics/817601/worldwide-animation-market-size/ 
  2. https://www.mordorintelligence.com/industry-reports/animation-and-vfx-market
  3. https://bit.ly/3kNk8V6
  4. https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2459&context=lkcsb_research
  5. https://mdec.my/wp-content/uploads/SEA-layout-20180815.pdf
  6. https://www.erieri.com/salary/job/2d-animator/china
  7. Multiple sources: https://www.prnewswire.com/news-releases/global-and-china-animation-industry-report-2019-2025-300880157.html; https://mdec.my/wp-content/uploads/SEA-layout-20180815.pdf; https://www.researchandmarkets.com/reports/4224818/global-and-china-animation-industry-report-2017; https://www.toonboom.com/made-in-china-why-everybody-is-watching-this-asian-animation-industry
  8. https://www.outsourcinginsight.com/outsource-animation-services/
  9. https://www.outsourcinginsight.com/outsource-animation-services/
  10. https://bit.ly/3sMCvMw
  11. https://mdec.my/wp-content/uploads/SEA-layout-20180815.pdf
  12. https://www.erieri.com/salary/job/2d-animator/malaysia#:~:text=Salary%20Recap,and%20anonymous%20employees%20in%20Malaysia.
  13. https://mdec.my/wp-content/uploads/SEA-layout-20180815.pdf
  14. https://www.salaryexpert.com/salary/job/2d-animator/philippines
  15. https://mdec.my/wp-content/uploads/SEA-layout-20180815.pdf
  16. https://www.salaryexpert.com/salary/job/animator/thailand#:~:text=The%20average%20animator%20gross%20salary,average%20bonus%20of%20%E0%B8%BF9%2C772
  17. https://mdec.my/wp-content/uploads/SEA-layout-20180815.pdf
  18. https://www.erieri.com/salary/job/animator-3d/vietnam
  19. http://www.vietnamadvisors.com/high-demand-for-the-vfx-and-animation-industry-in-vietnam/