The secret behind Hyderabad’s rise as India’s entertainment-tech hub in 2018

The secret behind Hyderabad’s rise as India’s entertainment-tech hub in 2018

Monday December 10, 2018,

8 min Read

Production houses from the regional film industry are collaborating with home-grown tech startups to make Hyderabad the hub of entertainment technology, specialising in VR, AR and VFX.

Flying mobile phones and sci-fi blended with horror: the visual effects (VFX) in Rajinikant’s latest outing, 2.0, were the talk of the town. Even the recent Thugs of Hindustan – despite being a box-office dud – drummed up significant pre-release frenzy thanks to its VFX, on which it reportedly spent a whopping Rs 200 crore. Visual effects seem to be the new craze on the block, and Hyderabad is at the centre of all the action.

It began with the release of Baahubali – The Conclusion in April 2017; its success told filmmakers and content creators that audiences were looking for different kinds of content and stories, and that VFX was something that they liked.

Baahubali may have evoked interest, but Hyderabad had always had the talent. The city’s VFX industry has worked on movies such as Titanic director James Cameron’s Avatar, The Chronicles of Narnia, Peter Pan, not to mention nearly 50 percent of TV shows on Nickelodeon.

Visual effects are the new craze in town.

Using technology and existing supply

It just isn’t big Hollywood filmmakers; Telugu, Tamil, Hindi, and other Indian language filmmakers are closely looking at how animation, VFX, and other technology can work in their favour. And since the technology itself is expensive, local production houses are working with city-based startups to bring the tech and talent together.

Actor, producer, and entrepreneur Rana Daggubati in a recent conversation with YourStory, said: “In rest of the world, technology plays a large part in films; we are just starting to change that in India. After the success of Baahubali, we realised that the added layer of VFX to tell a story is what audiences are looking for.”

But the use of technology and visual effects isn’t new for Rana; he got was involved in tech even before he became an actor. His company, Spirit Media, has done the special effects for over 80 films, including Rajinikanth’s Sivaji and Kamal Hasan’s Dasavataram.

Other industry players agree that technology is playing a bigger, more important role in Indian cinema.

Suresh Babu, producer, distributor and MD of Suresh Productions, says: “Movies are no longer going to be passive. There will be a shift towards AR/VR in movies, making them more immersive. But that is more in the future. In the current context, what people are looking for is ‘can they interact with the movie in some way’? So visual effects, post-movie comic books, spin-off series, and fan pages have become a part of the business.”

Suresh Productions is one of India’s largest integrated production houses based in Telangana and Andhra Pradesh. It has contributed to Indian cinema for 50 years and has over 155 films in 13 different languages to its credit.

Suresh Productions has a studio in Hyderabad that provides brand new, state-of-the-art film production technologies to other production houses and filmmakers.

Baahubali, the blockbuster that started it all.

Can we begin with experiments?

Yet, not everyone can afford to spend a few hundred crores. For example, Shankar Shanmugham has been quoted as saying VFX for the Rajinikanth-Akshay Kumar-starrer 2.0 are worth $75 million.

This is where startups come into play: to give filmmakers and content creators access to technology that they can use and experiment with.

It was the need to combine the existing supply of talent, technology, and startups that led to the creation of Anthill Studios, a programme set up in collaboration by startup incubator and accelerator Anthill Ventures and Suresh Productions.

Anthill Studios is an investment and speed-scaling platform for early-stage startups. It works like a market access programme, focused on accelerating business growth of tech startups.

“Today, there are a lot of startups working and building on technology. We feel this technology can have use cases in films, games, content creating, and storytelling,” says Prasad Vanga, Founder and Chief Accelerator, Anthill Ventures.

Walking the startup talk

Hyderabad already has a large base of deep tech and technology startups. From government-led policies to ease of doing business and building an ecosystem that promotes mentorship and development, Hyderabad has been walking the startup talk for a while now.

Incubation centres in education institutions like IIIT Hyderabad’s Centre for Innovation and Entrepreneurship, ISB Hyderabad’s Innovation cell, and Telangana’s T-Hub, all set up in the past three years, have been giving startups a boost. In three years, Hyderabad-based startups have raised $869.012 million, of which $400.95 million was raised this year alone.

The startup activity is what got Suresh Productions interested. Rana explains they felt there were many new startups working for the entertainment industry, but away from the entertainment industry, especially in Hyderabad. It was why Anthill Studios was created.

“Movies today are all about the experience. Filmmakers are looking at content and trying to find different ways to tell the story. We want to help these startups and evolve business models based on what the entertainment industry’s needs are,” Rana says.

Anthill chose around 10 startups from 150 applications, which tells you there’s no shortage of tech talent. As part of Anthill Studios, these startups are developing solutions based on technologies such artificial intelligence (AI), augmented reality (AR), virtual reality (VR), visual effects (VFX), cloud rendering, and IoT.

Speaking about the different startups that were a part of the first cohort, Rana says, “Comicflix, for example, is a company that coverts all videos/visual medium to comic books; Saranyu helps build OTTs. We have Woodcutter, which does R&D and analytics in scripting and helps us get the basics of storytelling right.”

Each selected startup gets funding of $1 million though Anthill Ventures’ fund, and has access to a diverse customer network through partnerships with corporate houses, content producers, brands, distribution channels, and studio houses.

Also read: Pulling a 'Baahubali' act in real life, actor Rana Daggubati doubles up as an entrepreneur

Not just Hyderabad

While based out of Hyderabad, the startups and their work aren’t restricted to the city. The teams work with different production houses like Alt Balaji, Viacom, Sony Entertainment, Star, and even corporate clients like IBM, Accenture, and Tech Mahindra. Corporates use the technology more for training and development purposes.

But the main push is to see how moviemakers can use more technology. “It is an industry that is hungry now for something new in technology. The only way forward for growth is collaborations,” Prasad says. The need for technology is increasing across different uses.”

Rana Daggubati meets startups at Anthill Studios, at Suresh Productions in Hyderabad.

One of the startups in the cohort, Scapic, which also is a 2018, Tech30 company, has been a part of Axilor Ventures and has already worked with Benglauru’s IPL franchise.

Sai, Co-founder of Scapic, says, “AR and VR are visceral mediums and can be used for great customer engagement. We currently have market access through Anthill and are already in talks with larger studios and media houses.”

Prasad explains that they aren’t telling an entrepreneur how to run a business. They might offer advice on business model and pricing, but the startup needs to have a good product, team, and resources in place.

Creating an ecosystem

Rana believes it is about building and creating an ecosystem. He says apart from ensuring that different content creators get access to technology and work with startups, his team manages the talent.

“What is needed is a complete marketplace. You have startups that bring technology and speed; then with the growth of OTT platforms and content, there is the need for different kinds of talent, and finally connecting it all together,” Rana says.

It is what his team is doing. They intend to create an ecosystem that involves everyone.

Guru Babason, Co-founder, Comicflix says, “We have been able to have meetings and market access to larger studios like Viacom, Sony, Star, and Alt Balaji. We are also exploring a deal with Suresh Productions, and even larger corporates that have media and entertainment as their clients. There is a market opportunity and growth, and we will look at raising Series A funding later in the year.”

While there is a market opportunity, does it open up the possibility of larger fund raises and rounds?

Some investors, seeking anonymity, said while the space is difficult, content and the demand for it are currently driving investments. However, not everyone is open to the idea of working with startups.

Vishnu Mohta, Executive Director of Kolkata-based SVF, touted to be eastern India's largest film and entertainment production studio, says they are looking to do everything in-house - “colouring and DI to VFX and subtitling and so on”, adding, “We're creating a dedicated studio within our office to have full control over the entire post-production process.”

Whether startups can work in synergy with studios for the long term is yet to be seen. But Hyderabad definitely seems to be moving in the right direction.