Wayne Dearing, Founder, MD Top Draw Animation speaks Philippines Creative Industry

Australian national Wayne Dearing founded Top Draw Animation, one of the world’s leading and independent production studios in Philippines in 1999. His Philippines experience began in 1991 through Hanna- Barbera Inc (US) when he was appointed as the general manager to their Manila based studios. In 1994, Wayne then moved to Philippines Animation Studios (PAS) where he remained as CEO until 1999, when he established Top Draw Animation. 

In this Interview Wayne Dearing gives an insight on his studio, the Philippine’s Animation Industry, Government Support, Tax Benefits and more.


Tell us about your studio Top Draw Animation?
I established Top Draw Animation in 1999 and over the past 12 years, it has grown into one of the leading independent animation production houses in the world. We specialise in 2D and Digital animation and focus on Flash and Harmony as softwares of choice. We’re based in Manila, Philippines, and now have a team of over 500 animators working out of our studios, all of them home grown Filipinos. Having such a rich heritage in animation is a fabulous advantage.

Our credits number into the thousands of half hours that are seen on major Television Networks around the world. Recent credits include such television series Kid vs Kat, Martha Speaks, My Little Pony, Invisible Network of Kids, Dennis and Gnasher and 2008 BAFTA nominees Eliot Kid and Skunk Fu.

As well as being one of the world’s most sought-after outsourcing studios, we’ve also been co-producing original properties since 2003. In the ensuing eight years, we have successfully completed five series co-productions and are half way through production on the sixth. Co-production now constitutes around 30% of our total business with the other 70% on fees for service basis. In terms of actual output, 2011 is looking to be our biggest year on record.

What is latest with Top Draw Animation?
We are not content developers in our own right. Our specialization is in the animation, rather than the development of properties, and we play to our strengths.   We become integral partners with our clients to bring to life their concepts and stories as they pursue their own IP developments. We leave it to our clients to talk publically about their projects, and so are not in a position to discuss in any detail the projects we’re currently working on. However, I can say that we are at the development stage with two clients on a couple of projects and are also in the middle of co-producing another series that is scheduled for air in 2012. All of our co-production projects have major television networks attached to them.

Overall, we are currently working on eight exciting projects; six of which are for air on major international broadcasters, one that is web-based and the other theatrical. Additionally, we have also just been commissioned by a major international broadcaster to produce a really exciting new property – so watch this space!

What is the animation industry in Philippines like? 
The Philippines is probably the most experienced destination for overseas animation production in the world today. It is certainly one of the most creatively driven and capable. While it does not have government subsidy, it does have the great advantage of having deep pockets when it comes to available talent. The relatively low cost of labour provides highly competitive value and the wealth of experience and ability gained over almost forty years in the industry is second to none.

As testament to this, the Philippines has long seen other territories in the region, such as India, Malaysia and Singapore, use Filipinos to train their own workforces and to drive their own local industries. Combine this experience with relatively low wages and genuine Western sensibilities and it is obvious that the Philippines represents the leading value proposition when outsourcing animation production. Government-based subsidies available in countries such as Malaysia and Singapore would be helpful but our superior business model overcomes that as an issue.

By way of specific example, Top Draw Animation is the leading studio in the Philippines and one of the largest worldwide. We are willing co-production partners and with one agenda: to maximize the worth of the IP so that we can share in the rewards as investors with our partners. The producers’ net spend on overseas production with us will be comparable to the lesser-experienced (but subsidized) markets and the partnership will be pertinently participatory.

The Philippines has a functional treaty in existence with Canada.   We’re also able to partner in non-treaty collaborations with most countries around the world, including major territories such as The United States, The United Kingdom, Australia, France, Spain, Italy, Ireland and Germany

Philippines has been known for its cheap labor when it comes to 2D animation. Does that still hold true?
Yes – the Philippines still boasts one of the world’s most low-cost workforces when it comes to 2D and Digital animation production. This is impressive for an industry as experienced and as high-quality as that of the Philippines – not only is the workforce one of the cheapest, it is also one of the most established. While some other South East Asian territories have introduced subsidies, the overall cost, when taking the cost of a Filipino workforce into account, is highly comparable. Top Draw also brings reliability to the table, and a guarantee that the work will not only be completed on time, but to the highest standards.

What competitive edge does Philippines have when its animation in the global market?
Basically, the overall value proposition is maximised by the correct blend of experience, acumen and cost.

An experienced industry: the Philippines has been producing high-quality animation for more than 40 years and boasts a vast pool of available talent. Our workforce is not only large, but experienced – as highlighted by the fact that experienced Filipinos are often poached by neighbouring territories to train their own workforces. If an international producer decides to outsource its animation, the Philippines already has the guaranteed resources, without having to rely on importing other countries’ workforces.

Cost: due to our relatively low-cost workforce, the end-price of outsourcing animation to the Philippines is very competitive, even when compared with subsidised countries.

Western sensibilities: The Philippines has genuine Western sensibilities and so any animation produced here can be guaranteed to resonate with Western audiences and pass the rigorous compliance tests of Western broadcasters. 

Is there any kind of government support for the industry, like grants, funds, subsidies etc?
As an export company, the government has granted Top Draw a tax-free period of five years and we are also VAT exempt on all direct production expenses.

Unlike some other South East Asian territories, such as Malaysia and Singapore, the Philippines does not have any extraordinary government support. However, this is because the animation industry in the Philippines is already well established – the reason those territories have government subsidies is because their governments are attempting to artificially create an industry instead of letting it grow organically. However, as previously mentioned, the overall cost between such territories and the Philippines is highly comparable. Plus the Philippines offers a long-established industry and a reliable workforce with more than 40 years’ animation experience. 

From being primarily a services driven industry is Philippines animation moving towards intellectual property development? Any cases that you can point out?
It is our view that the lack of a commercially pertinent domestic television industry is a stumbling block to developing IP in the Philippines.  Basically, you can’t raise enough money domestically to make your original IP a commercial proposition to an international co-producer.  From Top Draw’s viewpoint, we are basing our IP strategies around co-production and other forms of collaboration with partners who exist in higher priced markets with sufficient value, be it through subsidy, Broadcaster license fees or a mixture of the two.  As principle of Top Draw, my being Australian also provides easier access to that market.  The Philippines is the best destination for animation outsourcing by any measure.  To that we add our own superior acumen for animation production and make ourselves excellent partners when collaborating to originate IP.

Talking about your studio, what are your growth plans for the same?
Our major challenge in 2011 continues to be lost margin at the hands of unfavourable exchange rates, especially with the stronger Peso and weaker Euro when compared to the US Dollar. Economies of scale are important. As a company, we are taking advantage of the strong production slate for 2011 and are working on strategies to expand beyond our traditional 2D television markets and into CGI - across gaming and television. We see further diversification as a key for our future.

More recently we have created our own distribution arm, Mango Distribution. Mango concentrates on Australia, New Zealand and Asia and offers better solutions to our clients in territories that otherwise remain a challenge. Interestingly, we have also entered into other broader based outsourcing/BPO sectors and have added transcription and accounting divisions to the group's activities.