The animation market in China is growing rapidly driven by government initiatives, rising exports, and a huge consumer base. While the market potential is large, challenges include issues broadcasting foreign content and lack of popularity in global markets. Key trends in the Chinese animation industry include increasing joint ventures, mergers and acquisitions, and investment deals between domestic and foreign animation companies.

1. Animation Market – China
August 2010

2. Executive Summary
Animation is a booming and emerging sector
Market The potential opportunities lie in co-development and production, training, skill exchanges,
investment and copyright sharing
a% of animation programming is done by China
Drivers: Challenges:
LE
– Government and state initiatives and – Issues with broadcasting foreign
allocation of funds by provinces content
Drivers &
Challenges
– Rise in exports
MP
– International events and festivals
– Lack of popularity in global markets
– Capital intensive sector
A
– Huge consumer base
S
– Big market for animation films and
ancillary animation products
– Presence of academic institutions
Joint Ventures
Trends Mergers and Acquisitions
Investment Deals
In China, animation companies are involved in the various aspects of animation business like
Competition original animation production, distribution, merchandising, licensing
Companies like Creative Power Entertainment produce animation films like The Super Adventure
while CCTV Animation have also produced popular TV series Monkey King
ANIMATION MARKET IN CHINA 2010.PPT 2

3. •Market Overview
•Drivers & Challenges
•Trends
•Competition
•Key Developments
ANIMATION MARKET IN CHINA 2010.PPT 3

4. Animation market in China is still at a nascent stage with
strong growth prospects
Market Overview – China Market Size & Growth
• Animation Market is an emerging sector in China
• In China, foreign animation programming accounts
for v% of the daily animation programmes USD bn
• There are T animation companies in China, bulk of 5 X
which are based in Location 1, Location 2, Location 3, a%
Location 4 and Location 5 4 W
• Cultural industries gross output value is ~USD N and V
~ m%
PLE
proportion of animation, comic and games market is
• In 20--, China produced K minutes of animation, a
3
2
U
M
rise of j% YoY
A
It is expected that the output of the animation industry
1
S
will grow at m% between 20-- and 20--
• Segment 1 include TV animation, animated films,
online animation, mobile animation and animated 0
advertisements 2009 2010e 2011e 2012e
• Segment 2 products include animation books,
newspapers, audio-visual products, toys
• The potential opportunities lie in co-development
and production, training, skill exchanges, investment
and copyright sharing
Source:
ANIMATION MARKET IN CHINA 2010.PPT 4

5. Structure of the Animation Industry in China
Infrastructure Support Production Platforms/Sales
Academic
Institution T.V. House
Software
PLE Other
Investors Industry Park
Outsourced
Studio Cinema
Supplier
SAM Primary Company
DVD/Book
Publisher
Website
Consulting Industry Platform
Agent Association
Hardware
Government Character
Wholesaler
Policy Mfg.
In China, the most active players include primary company, outsourcing studios, industry parks
In China, the most active players include primary company, outsourcing studios, industry parks
and TV houses. Animation players largely focus on developing products for X
and TV houses. Animation players largely focus on developing products for X
Source:
ANIMATION MARKET IN CHINA 2010.PPT 5

6. Drivers & Challenges – Summary
Drivers
Government and State initiatives
and allocation of funds by provinces Challenges
Rise in exports Issues with broadcasting foreign
content
International Events and Festivals Lack of popularity in global markets
Huge Consumer Base Capital Intensive Sector
Big market for animation films and
ancillary animation products
Presence of Academic Institutions
ANIMATION MARKET IN CHINA 2010.PPT 6

7. Trends – Summary
Joint Ventures
Key
Trends
Investment Deals Mergers and Acquisitions
ANIMATION MARKET IN CHINA 2010.PPT 7

8. Domestic Players (4/7)
Company Snapshot: Company 1
Corporate Information Business Highlights
Headquarters Location 1 • It provides one-stop animation outsourcing service to
Founded
Products
20--
A1, B1 LE
meet the demands of overseas and domestic clients
• The company also engages in the production of 3D
P
animation and images for various sectors, including
M
A, B, C, D, E and F
A
Person 1 – CEO
Key People
S
Person 2 – Chairman
Company Snapshot: Company 2
Corporate Information Business Highlights
Headquarters Location 2 • A subsidiary of Company 3 , it has the largest
animation production base in China
Founded 19-- • The entity develops and manages U and V as well as
L, M, N, O and P
Products A2, B2, C2
Also commercialising intellectual property rights (IPR) and
handling the merchandising of commodity 1, commodity 2
Person 1 – CEO and commodity 3 based upon animation designs
Key People
Person 2 – MD
Source: Press Articles, Company Website
ANIMATION MARKET IN CHINA 2010.PPT 8

9. Thank you for the attention
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ANIMATION MARKET IN CHINA 2010.PPT 9