The Nation

Startup and IT

Digital content industry

Local animators seek help to enter overseas deals

Small local firms unable to fund co-productions

The digital content industry in Thailand continues to grow, with expectations that it will achieve revenue of Bt27.2 billion this year.

However, the Thai Software Game Industry Agency and the Thai Animation and Computer Graphics Association have asked the government to set up a fund to support businesses in the industry, to promote local content on television and to introduce tax incentives to help local companies expand their operations.

The Software Industry Promotion Agency says that animation and gaming are among the "active" segments of the digital content industry. Sipa expects that revenue from animation and gaming will reach Bt27.2 billion this year, of which Bt15.8 billion will come from animation and Bt11.4 billion from the game industry. It also expects that the industries will achieve revenue of Bt34.5 billion by 2013 because of global demand for new and diverse content, competitive outsourcing partners, and a creative and efficient workforce.

The agency also believes that Thailand will become a distinguished destination for the digital content industry in Asia.

Thai Software Game Industry Association vice president Permbun Aimsupasit said that the online game industry was expected to be worth Bt11.4 billion this year. Online games are responsible for about 44 per cent of the industry, followed by arcade games, at around 27 per cent.

He said about 95 per cent of revenue from Thailand's online-game industry now came from international markets and the rest came from local game development. Therefore, there was a big opportunity for local software companies to develop games to support the market.

He said developers were also working on software games to support social networks, or social-network and mobile games, to support the lifestyle of game lovers. Moreover, broadband Internet access and 3G infrastructure will be important in encouraging users to play online games via social media and mobile phones.

Permbun said there was currently a "transition period" of transfer to new technologies, such as cloud computing services, which would enable developers to develop new games and services to meet market demand.

Thai Animation and Computer Graphics Association (TACGA) committee member Lak Taechawanchai said the local animation industry was continuing to grow because software developers had entered into co-productions with international companies, enabling them to expand their business base into global markets.

He said his association would ask the government to provide funds to enable small- and medium-sized animation and digital-content firms to grasp opportunities for co-productions with global companies. Developing such animation projects often required considerable investments.

"There is a barrier to small- and medium-sized companies investing in and developing animation and digital-content projects aimed at co-productions with international companies because they lack the money to invest in such projects; to promote their software and animation development to global markets," Lak said

The association will also ask the government to support and promote the use of locally-produced animation on free television, to provide a new channel through which the public can appreciate Thai animation. The TACGA is currently negotiating with Thai PBS to produce animated cartoons and other local content for TV broadcast next year.

Lak said that a leading think tank and systems integrator in Japan, the Nomura Research Institute, had reported that Thai software developers had the potential and creativity to develop high quality software, digital content and animation.

The institute also suggested that Japanese investors should put their money into co-productions with Thai software developers and businesses, to develop and produce digital content. It named Thailand as a destination for the digital-content industry in the Asia region, creating new opportunities for local software developers to enter global markets, Lak said.

Software Industry Promotion Agency acting president Niracharapa Tongdhamachart said that in order to promote Thailand's digital-content industry, Sipa planned to support local software companies in their development of co-productions with international companies. The agency recently supported local businesses by signing a memorandum of understanding with Malaysian companies concerning five projects worth around Bt300 million.

The agency will also ask the Board of Investment to provide special tax privileges or incentives for local software companies so they can hire staff and train skilled workers for their businesses.

"I think that Thai people have the potential to develop digital content, even though it's a small-scale industry compared with the country's overall software industry. The value of the digital-content industry is expected to growth by around 10 per cent this year. Sipa will also help to develop human resources and expertise to support the market and the industry," Niracharapa said.

Sipa is also planning to push the use of local software by businesses and organisations in Thailand, hoping for growth of about 30 per cent in the next three years, she said.

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