Global Animation Outsourcing Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Type (2D Animation, 3D Animation, Motion Graphics, Stop Motion, Others), By Industry (Media And Entertainment, Education, Healthcare, Others) And By Geography - Forecasts From 2024 To 2029

The animation outsourcing market is expected to experience a CAGR of 9.35% throughout the forecast period, reaching a market size of US$299.028 billion by 2029. This represents a substantial increase from US$159.985 billion recorded in 2022.

The animation outsourcing market is increasing by various factors, notably the growing appetite for animated content, escalating production costs of animation in developed nations, and the availability of skilled animators in developing countries. A significant contributor to this trend is the mounting cost of living in developed countries, where the expense of skilled labour is notably high, as reported by openaccessgovernment.org. In 2020, the average annual expenditure for all consumer units reached $61,334, with American households allocating $7,317 for food and $9,826 for transportation. Furthermore, in July 2022, the index for all goods, excluding food and energy, recorded a substantial increase of 5.9%. This economic dynamic is driving the animation industry to seek cost-effective solutions, leading to a surge in outsourcing demands.

Notably, the demand for top-tier animation is a key driver for this outsourcing trend. Companies like Toolbox Studio based in India have emerged to provide outsourced animation services, showcasing their prowess by completing numerous projects for clients across continents, including North America, Europe, Asia, and Australia. The distinguishing factor for outsourcing partners such as Toolbox Studio lies in their adaptability and proficiency to handle diverse projects across different sectors, both locally and internationally. As studios increasingly seek outsourcing collaborators capable of delivering high-quality animation at competitive rates, the animation outsourcing market is likely to witness significant growth in the future. This trend with companies is anticipated to increase demand for outsourced animation services.

The rising Penetration of smartphones propels the animation outsourcing market.

The animation industry is experiencing a surge, propelled by the widespread popularity of animated films, television shows, video games, and even marketing materials. Audiences spanning all age groups are increasingly captivated by the immersive and visually stunning storytelling capabilities that animation offers. Streaming giants like Netflix, Hulu, and Disney+ are consistently rolling out fresh animated content, intensifying the need for highly skilled animators. Further, demand is likely to escalate as the prevalence of smartphone devices continues to rise. According to European Union data. In Europe, for instance, 85% of smartphone devices are used for internet access, reflecting a significant reliance on smartphones. This trend is followed in individual countries such as Germany (83%), France (85%), and Italy (83%). The increasing use of smartphones for internet access plays a pivotal role in driving the demand for online content, meeting the diverse preferences of demographic audiences and various cultures. Highlighting the surge in content consumption, a study published in JAMA Pediatrics in November 2021 revealed that 12- to 13-year-old children spend an average of 7.7 hours per day on non-school screen time. This represents a significant increase from the pre-pandemic screen time of 3.8 hours per day, showcasing a substantial spike in content consumption. This surge further boosts the growing demand for animation-related content as audiences, especially younger demographics, engage more extensively with digital media.

It is projected that the global animation outsourcing market in the North American region will grow steadily. 

The United States is expected to hold a substantial share of the market owing to the presence of key players in the nation. The animation outsourcing market in the United States is propelled by cost-effectiveness due to reduced labour costs in outsourced locations. Scalability, flexibility, and access to a worldwide talent pool are essential components that allow studios to fulfil deadlines with fluctuating workloads. Technological developments in outsourcing locations increase the efficiency of manufacturing as a whole. Modern communication tools make it easier for people to collaborate in the nation. The importance of outsourcing to the American animation business is further highlighted by the need to meet the rising demand for animated material while maintaining worldwide quality standards.

Growth in the domestic sector and creative innovation are encouraged by the robust employment market for animators and special effects artists in the United States. For scalability during periods of peak demand and cost concerns, outsourcing continues to be a viable method; nevertheless, competition for top personnel may push studios to invest domestically. As per the U.S. Bureau of Labor Statistics, the highest level of employment in special effects artists and animators was in the motion picture and video industries accounting for 16,700 people in 2022, whereas that for software publishers was 4,990. In addition, the number of independent artists, writers, and performers was 800. The dynamics of outsourcing and domestic employment patterns influence the U.S. animation business. Furthermore, the market for animation outsourcing is being revolutionized by the digital economy, which makes it possible to collaborate remotely, connect globally, and access specialized expertise. Digital tools boost efficiency and automation, while the transition to online platforms promotes the need for outsourced content adapted for digital distribution, altering the dynamics of the sector. The digital economy in the United States was responsible for $3.70 trillion in total output, $2.41 trillion in value-added, or 10.3 per cent of the country's GDP, $1.24 trillion in compensation, and $8.0 million in employment. Price-adjusted GDP, commonly known as "real" or "chained-dollar" GDP, grew by 9.8% in 2021, far faster than the 5.9% increase in the economy as a whole. In the U.S. animation outsourcing market, some of the strategies employed by key market players are global talent sourcing for cost-effective expertise, long-term partnerships for collaborative efficiency, prioritizing technological integration for improved workflows, and diversifying outsourcing partnerships to mitigate risks and maintain flexibility. These strategies consider the dynamic nature of the sector, the need for adaptability in a competitive, and global setting, and boost the animation outsourcing market in the nation.

Market Key Developments

• May 2023: Aardman collaborated with Somerset, for a cider maker, Thatchers on a TV commercial, it used stop-motion animation to guide the viewer through the gates of Thatchers' Myrtle Farm home. The industry is proactively responding to this demand by fostering increased creativity and innovation to cater to the preferences of a dynamic and expanding audience.

Global Animation Outsourcing Market Scope:

 

Report Metric	Details
Market Size Value in 2022	US$159.985 billion
Market Size Value in 2029	US$299.028 billion
Growth Rate	CAGR of 9.35% from 2022 to 2029
Base Year	2022
Forecast Period	2024 – 2029
Forecast Unit (Value)	USD Billion
Segments Covered	Type Industry Geography
Companies Covered	Innovecs N-iX LLC BackofficePro Zvky Design Studio Private Limited Digitoonz Next Animation Studio Ltd. G-angle Flatworld Solutions Pvt. Ltd.
Regions Covered	North America, South America, Europe, Middle East and Africa, Asia Pacific
Customization Scope	Free report customization with purchase

 

Segmentation:

• By Type:
  • 2D Animation
  • 3D Animation
  • Motion Graphics
  • Stop Motion
  • Others
• By Industry:
  • Media and Entertainment
  • Education
  • Healthcare
  • Others
• By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Spain
    • Others
  • Middle East and Africa
    • Israel
    • Saudi Arabia
    • Others
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Others

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1. INTRODUCTION

1.1. Market Overview

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base, and Forecast Years Timeline

2. RESEARCH METHODOLOGY

2.1. Research Design

2.2. Research Process

3. EXECUTIVE SUMMARY

3.1. Key Findings

4. MARKET DYNAMICS

4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Forces Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

5. GLOBAL ANIMATION OUTSOURCING MARKET BY TYPE 

5.1. Introduction

5.2. 2D Animation

5.3. 3D Animation

5.4. Motion Graphics

5.5. Stop Motion

5.6. Others

6. GLOBAL ANIMATION OUTSOURCING MARKET BY INDUSTRY

6.1. Introduction

6.2. Media and Entertainment

6.3. Education

6.4. Healthcare

6.5. Others

7. GLOBAL ANIMATION OUTSOURCING MARKET BY GEOGRAPHY

7.1. Introduction

7.2. North America

7.2.1. USA

7.2.2. Canada 

7.2.3. Mexico

7.3. South America

7.3.1. Brazil

7.3.2. Argentina

7.3.3. Others

7.4. Europe

7.4.1. Germany

7.4.2. France

7.4.3. United Kingdom

7.4.4. Spain

7.4.5. Others

7.5. Middle East and Africa

7.5.1. Israel

7.5.2. Saudi Arabia

7.5.3. Others

7.6. Asia Pacific

7.6.1. China

7.6.2. Japan

7.6.3. South Korea

7.6.4. India

7.6.5. Others

8. COMPETITIVE ENVIRONMENT AND ANALYSIS

8.1. Major Players and Strategy Analysis

8.2. Market Share Analysis

8.3. Mergers, Acquisition, Agreements, and Collaborations

9. COMPANY PROFILES

9.1. Innovecs

9.2. N-iX LLC

9.3. BackofficePro

9.4. Zvky Design Studio Private Limited

9.5. Digitoonz

9.6. Next Animation Studio Ltd.

9.7. G-angle

9.8. Flatworld Solutions Pvt. Ltd.

Innovecs

N-iX LLC

BackofficePro

Zvky Design Studio Private Limited

Digitoonz

Next Animation Studio Ltd.

G-angle

Flatworld Solutions Pvt. Ltd.