PHILIPPINE ANIMATION AND LOCAL ARTISTSLocal literature showed that Philippine Animation owed its beginnings to the cartoonists. Cartoons are generally popular in the form of komiks which is the local version of comic book magazines. Examples of popular cartoonists include: Tonton Young who created Pupung, Pol Medina Jr. who created Pugad Baboy, Larry Alcala – the creator of the Philippines’ most loved komiks characters including Mang Ambo, Asiong Aksaya, Kalabog en Bosyo and the popular Slice of Life --- as well as over 500 cartoons and cartoon characters all reflecting the foibles of Philippine society. Filipino animators are now finding opportunities abroad on big animated projects. As an example, Ronnie Del Carmen, a Filipino animator, is billed as artistic supervisor for the latest project of Dreamworks Studios in Los Angeles, California. His latest works include “The Prince of Egypt,” and “The Road to El Dorado In the Philippines, animation has finally found its way. Inspired by the high degrees of sophistication emitted by other countries, Filipino artists decided to try their luck in the art. Years of hardships and disappointments never dampened the spirits of our hardworking animators. In 1950, Jerry Navarro, Larry Alcala, Vicente Penetrante and Jose Zabala Santos, tried their luck in animation. But due to financial problems, these young and budding animators had to work with the crudest of equipment. Through the years, one or more artists would try to nurture their knowledge of animation only to be blocked by the usual financial constraints. Meanwhile, anime or Japanese animation has long been a very popular subgenre of Philippine pop culture since the late 1960s and the whole of the 1970s when Filipino audiences were first exposed to the charms of Japanese animation by way of such classics as Speed Racer, Gigantor, Astroboy, and a number of others. The fanbase began to gain sway during the giant robot era of the 1970s when fans of Voltes V and Mazinger Z actually went into the production of fanzines, translated comic books, and model kits. Despite having been outlawed during the Marcos regime, many examples of fan merchandise from this era have survived even to this day. Though the 1980s were characterized by a somewhat lukewarm response to Studio Nue’s Macross, the mass market interest in Japanese pop culture (referred to as J-pop, a term that encompasses everything from pulp fiction to pop music and animation) was revived by both the vernacular dubbing of anime for Philippine television. In 1983, an Australian company established a branch known as Burbank Animation, Inc. (BAI). Aside from this, another company, which is known as Asian Animation, was then called Optifex International, Inc. Unlike Burbank Animation, Inc. which is a foreign owned company, Optifex Animation, Inc. is a Filipino owned corporation. Through the years, these companies worked with utmost dedication for the improvement of the animation industry in the Philippines. Burbank Animation, Inc. and Asian animation, Inc. were joined by another big company, Fil-Cartoons, which was established in 1988. These companies, although they have the same purpose did not yet form an association. However, they all have done their share in the industry, such as helping train aspiring animators, producing animated films in the country. However, most of the products of these companies have been made for export reasons. Each company has a contract with various international animation companies. The animation industry in the Philippines is considered as one which progressing and developing. Had it not been for financial constraints, they would have produced more animated materials for Filipino viewership and usage. Local anime, on the other hand, has now developed into a fan base on the Internet in the mid-90s. At present, based on a local internet source, the Philippines reportedly accounts for a 30% share of animation work in the Asia Pacific, and it is projected that this could grow to 70% or more with professional training. Local and Global Scenario In the 1980’s, the animation industry in the Philippines was limited to producing entry to mid-level skill service. Projects were limited to traditional hand-drawn animation including penciling, inking, and painting. Work was sent via FedEx and courier, and thus, the amount of work outsourced to the country was limited. The 90’s were considered the “Golden Age of Animation”; skills were not limited to entry to mid-level as Filipino animators began working on TV series and feature films. This increased the skill set and broadened the range of Filipino animators. The advent of the Internet also allowed for a more efficient way of sending work as sending output via courier began to decrease. In 2000 onwards, the Animation landscape continued to change, and Filipino animators have gone from entry level to doing higher function and more complicated work. Filipino animators currently have the ability to provide services from pre-production to postproduction. With a long-standing history in animation services and a strong cultural affinity with Western countries, US companies specifically, have long preferred the Philippines as an outsourcing destination when it comes to animation. The country is considered to have a first mover advantage in the Asian region. Filipino animators have worked on popular cartoons and animated films such as: Adams Family, Captain Planet, Dragon Ball Z, Finding Nemo, The Incredibles, The Jetsons, The Mask, Scooby Doo, and Tom & Jerry. Entertainment companies such as Hanna Barbera, Marvel Comics, Walt Disney, and Warner Brothers has outsourced many projects to Philippine-based animation companies. Animation outsourcing also applies to creating graphics for the video game industry, an industry that was valued at US$ 25.1 billion in 2010.Filipino animators have worked on games for the following gaming platforms: Nintendo, Sega, Game Boy, and Sony Playstation. Despite being one of the first countries in the region to provide animation services, the Philippines has a small market share compared to its competitors: China, India, Singapore, and South Korea. Service exports in animation outsourcing provide to the following major markets: US, Europe, Japan, and Australia. Philippine Animation Industry Number of Firms According to the Animation Council of the Philippines, Inc. (ACPI), the number of animation firms in the Philippines has steadily increased from 1980 to the present. The Global Economic Crisis, the growing quality of labor force in developing countries like the Philippines and India, and factors including labor arbitrage and cost leverage, all contribute to the growth of outsourcing. Figure 1 shows the growth in terms of number of animation companies operating in the Philippines from 1980 to 2011.5 It is important to note that over the years, the trend shows an increase in locally owned animation companies compared to virtually all foreign-owned animation companies in the 1980’s. Number of Animation Firms in the Philippines (1980-2011) INDUSTRY ASSOCIATIONS The Animation Council of the Philippines is a local association of animation studios bonding themselves with the purpose of consolidating their efforts to promote the local animation industry. AnimeExplosion2000 was a recent example of their accomplishment. CAST or Cebu Animators Society for Talent is an association for the development of talent and resources to support an animation industry in Cebu. This cooperative society aims to build a critical mass to attract the world animation consumer to do business here in Cebu. CAST society is a sharing cooperative where member’s contribution time and product to help others and themselves compete in the world market. CAST is a zero fee Cooperative. Members are expected to give and take so the cooperative will grow and reach a critical mass. It is is open to persons who are interested in animation. There is no age limit or other requirements. CAST is made up of two membership classes a) invested and b) noninvested. The invested class will generally have a computer and the software to create and edit 2D and 3D characters or objects. This class may also include people with a marketable skills and talent such as hand drawn animators, script writers, voice character and marketing. The non-invested is made up of persons in training and interested individuals. Members are expected to contribute to the cooperative animation library with characters, objects, background stills and animation sequences. The library is shared by all members. A contribution of one piece will make available hundreds in return. Members are also expected to contribute time and techniques to teach others how to do things. Animation takes a lot of talented people and capital to reach a critical mass. The object of CAST is to disperse the talent and concentrate the capital. In this manner the talent will have access to video cameras, tape recorders, sound stages, motion capture, video editing and other equipment. Members work will be published and sold on the world market. Members will share in this income. CAST will have weekly meetings to discuss member problems and difficulties. These meetings are free of charge and members are expected to help each other with "How to do" questions and answers. A 24 hour computer Intranet (local only to Cebu) is now in place for those that have a computer to discuss problems, share objects, tips, and tutorials. Formal training classes are offered at a discount for members SUPPORT INSTITUTIONS Government The Philippine Government has been supportive of the industry and has worked closely with ACPI to strengthen the industry and increase its global competitiveness. The following agencies have worked with ACPI in various initiatives to help the industry achieve its goal in furthering the Philippines as an animation-outsourcing destination: Department of Foreign Affairs (DFA) and Department of Trade and Industry (DTI) A trade agreement was signed between Canada and Philippines for Animation Co-production; A similar agreement was also signed with Singapore; and recently signed a Memorandum of Agreement was signed for the Creative collaboration in “Asiagraph”, Japan with Asia economies Center for International Trade Expositions and Missions (CITEM) and DTI (Bureau Exports and Trade Promotions / BETP) Attend international animation conferences, exhibits, and trade fairs and provide assistance on marketing, acquiring of booths and pavilions for animation company exhibitors; DTI, BOI and Philippine Economic Zoning Authority (PEZA) Signing of Memorandum of Agreement (MOA) of incoming trade investments for the Animation sector BOI Supports the Capability building of the industry in terms of production management and in-depth learning about finance; DTI and PHILEXIM Implement loan and investment programs for industry associations to be used for expansion, promotions, projects and development; National Commission for Culture and Arts (NCCA) and Film Development Council of the Philippines (FDCP) Promote and support original content creation for IP and branding of Filipino Animation. GLOBAL MARKETS SERVED According to Tholons, the biggest markets served by the Philippines include the US, Japan, Europe, and Australia. In 2005 and 2006, the aforementioned markets (combined) accounted for 75% and 92% (respectively) out of the total sales export in the Philippine animation industry.9 Economic Contribution of the Animation Industry A study conducted by the Cultural Center of the Philippines (CCP), National Commission for Culture and the Arts (NCCA), with the ABS-CBN, entitled Philippine Creative Industries Mapping: Towards the Development of a National Strategy, stated that the value of world exports of creative industry products and services totaled 227.4 US$ billion in 1996, and has grown to 424.4 US$ billion in 2005, capturing 3.4% of world trade. Employment and Global Market Share In contrast to the call center sub-sector of BPO, the animation industry employs a small fraction of the total BPO sector. In 2010, the animation industry reported 10,000 FTEs compared to 344,000 FTEs in the contact center industry. The nature of work in the animation industry is more specialized, and therefore, presents a challenge in terms of providing a large talent pool (tertiary graduates). Figure 2 shows the growth trend in employment for the animation industry. 11 . In 2010, the global market was estimated to have been at close to 80 US$ billion (79.7). According to ACPI, the Philippine share was 120 US$ million (0.15% of the global market share). Considering the capability of Filipino animators, and experience of Philippine based animation companies, the Philippines should have a much bigger share of the global market. Figure 3 shows the total global share versus the Philippine share. Revenue and GDP Contribution Since 2004, the animation industry in the Philippines has seen a steady increase. As previously mentioned, the emergence of the Internet has played a vital role in increasing the number of output that can be sent by a company. More importantly, connecting with employees in animation studios in the Philippines, from the US, Europe, Japan, or Australia is much more accessible than in the 1980’s that the quality of output can be measured more easily and corrected must faster than before. Figure 4 shows the growth trend of revenue in the animation industry in the Philippines from 2004 to 2010. According to the study, the contribution of creative industries to gross domestic product (GDP) and gross national product (GNP), in less developed countries (such as the Philippines) is typically at 5% and 7% respectively, and can grow to 7% to 10% as countries improve their economies. Animation accounts for only a small percentage of the creative industries and in 2008 reported 0.24% of the total Philippine exports. According to the study: Philippine Creative Industries Mapping: Towards the Development of a National Strategy, the contribution of creative industries to the gross domestic product is estimated to be at 5.37% as of 2006.14Although there is no exact figure as to the share of the animation industry in the creative industries, majority of the industries require animation in some shape or form