So much so, if the number of companies cropping up in the city, and existingIT companies turning to the segment, is any indication, the day is not farwhen Hyderabad will be able to boast of another feather in its IT cap.

While, established studios in the city like the Ramoji Film City (RFC), RamaNaidu Film Studios and Padmalaya have set up separate arms to handle specialeffects on a commercial basis, others are making a beeline for the city."Three years back there was hardly any industry here. But today, there is asea change ", says Shaibani Azam, director, Deccan Dreams Pvt Ltd, the SFXproduction wing of the Rama Naidu Studios. Azam migrated to cinema fromdoing advertising SFX in Mumbai the past decade or so.

The reasons are not far to seek. While an increasing shift of productionwork from Bollywood is partly responsible for this, the 30 to 40 per centcost differential and the easier availability of expertise are driving moreSFX and animation work to Hyderabad.

Compared to the advertising industry, cinema in India has been slow to catchup on graphics and special effects which is just two years old in India,says Raghu Kidambi, who heads Mantra, the SFX shop at the sprawling RFC.This is not surprising considering ten years back the customs duty onsoftware was 300 per cent, which only the ad industry could afford, saysAzam.

However, with realisation that SFX can carry a movie on its own and withcosts coming down, more producers are now turning to it.

The fact that production in Hyderabad is cheaper than Mumbai apart fromturnaround times being faster, has prompted producers to test out the watershere for SFX also.

On an average, its costs anything between Rs 15,000 to Rs 25,000 a secondfor producing special effects in India for cinema. However, in Hyderabad itaverages between Rs 7,500 to Rs 12,000 per second for films while it costsanything up to Rs 250 per second of crude SFX for TV. For instance, the 18.5minutes of SFX in Kamal Hasan's HeyRam, done at the Ramoji Film City over aseven month period, would have cost anything upwards of Rs 10 crore in theUS. Though RFC is reluctant to divulge the figures, industry sourcesestimate the same would cost just under Rs 1 crore.

The easier availability of PC platform software and solutions has alsohelped the market to grow fast with the entry costs coming down for newcompanies particularly where 3-D animation is concerned.

At the other end of the spectrum is the 2-D animation market with the US,which commands 80 per cent of the market, being the prime target. Whileseveral countries like Korea, Philippines, Taiwan and China are some of thecontenders for the market, India has the advantage of a large Englishspeaking engineers and the presence of large cinema industry.

While, there is a good potential for India in 2D animation in movies it ispredominantly the cartoon market in the US which is the biggest grosser,says Uttam P Kumar, Colour Chips Animation Park Ltd.

Uttam Kumar says he is setting up the biggest animation floor in Asia whicha capacity for 400 animators, for which he has already received 4800 jobapplications.

Availability of cheap and highly tech savvy labour is perhaps the trump thatIndia, and particularly cities like Hyderabad, seem to hold.

"An animator costs anything up wards of Rs 5 lakh per month in the US, Rs 2lakh in Korea but only between Rs 24000 to Rs 5000 in India", says theHollywood returned animator turned entrepreneur.

It is the experience there that prompts Uttam Kumar to say that gettingHllywood to India is the only option if the Indian animation industry is tosurvive.

Considering a show of about 22 minutes can fetch anything from $150,000 to$160,000 in the global animation post-production market, one is talking alot of money which could very soon be making its way to Hyderabad.