Emerging Vietnam

by Anne Aghion and John Merson

Producers of animation are always on the lookout for the next great opportunity. In recent years some animation producers have been creating titles in Vietnam. At first glance, Vietnam would seem an unlikely location for producing high-quality animation. So why is the country emerging as a significant site? Who is producing animation in Vietnam, and what has their experience been? Finally, what are the prospects for continued growth in the Vietnamese animation industry?

Since the war, and up until the late Eighties, the state studio in Hanoi, run by the Ministry of Culture, was the only animation house in Vietnam. They worked mainly on institutional and educational films. All their animators were trained in the Soviet Union, and worked traditionally without any concerns for the bottom line.

The pioneers that marked the beginning of the modern era in Vietnamese animation came from Japan in 1991. They settled in Long An, about 30 miles from Ho Chi Minh City, and were in operation for a little under two years, then closed down. However, they left a great legacy of relatively well-trained animators for their successors to build on.

Pixibox Makes A Move
Their immediate successor in 1994 was French. "They probably decided to set up shop there because there was no one else in the country," recounts Anne Collet, the current managing director of Paris-based Pixibox Studios, about the decision of the company's management in 1994 to move into Ho Chi Minh City in a partnership with the Education and Audiovisual Center. Pixibox Studios, part of the Humanoids group of companies, is the largest 2-D digital animation studio in Europe, and today produces mainly for the television series market. Sparx*, its sister company within Humanoids, and one of the leading CG houses in France, operates the 3-D side of the studio in Ho Chi Minh City.

Anne Collet wasn't part of Pixibox Studios at the time they established themselves in Vietnam. But for over ten years, in her capacity as a manager of production houses, she has worked all over Asia, including Japan, China, South, and even North, Korea, and she says the Vietnamese are "terrific workers, and once they know how to do a job, they really do it well."

Pixi Vietnam, run by Didier Montarou, a film editor by training, has close to 250 staff spread over two locations in Ho Chi Minh City, and offers services that range from 2-D pencil animation, to 2-D digital ink and paint, to 3-D CGI key-frame animation, the latter being directly operated by Sparx* Paris. The production model they have chosen to follow, is to do the compositing, modeling and rendering of the images in the home studio, in this case, in France.

To hear Anne Collet talk about it, it sounds like the studio in Vietnam is really her pet project. She visits every three to four months to convey the "European philosophy" she wants to maintain there. "We give priority to quality and to new technologies. In Vietnam, we work exclusively for producers who want quality." To illustrate this, she proudly says that the translators and interpreters who work in her studio regularly win the yearly government contests for the best translators in the country.

Pixi Vietnam is able to handle about 70 minutes of pencil animation a month, and more than double that volume in digital ink and paint. On the 3-D side, they churn out close to 60 minutes per month. Pixi Vietnam's clients include the French Canal+ subsidiary, Ellipse, for whom they work regularly, Canal+'s other subsidiary Medialab, Dupuis, and Canadian producer Nelvana who also uses the facilities in Vietnam.

In Pixibox's wake, half a dozen foreign animation producers have tried to establish studios in Vietnam with various degrees of success. Foremost among these is Ed Dua's Morgan Interactive. One Friday afternoon in December of 1994, Ed Dua, CEO of Morgan Interactive, was staring out the window of his San Francisco office. In spite of the spectacular view, Ed could not help worrying about a difficult issue facing his young company, a producer of high-quality animated titles for the children's edutainment CD-ROM and TV industry. Both businesses were growing fast and were highly competitive. In order to keep pace with the industry's growth, Ed knew he had to find a solution that would enable him to expand Morgan Interactive's animation production capacity at a cost that would allow him to remain competitive.

Ed Dua, CEO of Morgan Interactive. Photo courtesy of Morgan Interactive.

New Media Comes To Town
Morgan Interactive produces multimedia CD-ROM titles for many large publishers, including Houghton Mifflin, McGraw Hill, Virgin Interactive, and others. Recently, Morgan also began developing pilots for animated TV programs. The company designers were very talented, and Morgan Interactive was able to win most of the projects for which they submitted proposals. That was the good news. The bad news was rapidly escalating costs. Producing animated titles in the Bay Area had recently become prohibitively expensive, and the difficulty of finding talented animators and programmers was occupying an increasing share of Ed's time.

Ed thought about a recent comment one of his venture capital investors had made to him. Jean-Marc Merlin, a partner of H2O, was building The Press Club, a high-end hotel, restaurant, and conference facility in Hanoi. In describing his experiences in Vietnam, Jean-Marc had told Ed how impressed he was with the quality and quantity of art schools in Vietnam, and noted that a number of French companies had begun producing animated films there. He wondered if perhaps Vietnam might help Morgan Interactive in its quest to build production capacity at an affordable cost.

Today, under the leadership of Phil Tran, who was born in Vietnam and educated in the United States, and handled Morgan's entry into Vietnam while a young lawyer at the Philips Fox firm in Hanoi, Morgan Interactive Vietnam has turned into a large facility that employs more than 150 animators and programmers.

Other companies that set up operations there in the last four years include: Korean studio Hahn Shin, one of the larger South Korean studios, which works in a partnership with the Orthopedic Center in Ho Chi Minh City to train the handicapped to do in-betweening and traditional ink and paint, and Worldwide Animation, a subsidiary of Philippine Animation Studio, Inc. and a traditional 2-D pencil and ink and paint studio, who some say could be either in the process of closing down, or converting to a digital facility. Philippine Animation Studio Inc. declined to comment on the future of the company.

Vietnam's Unique Position
It helps to view this expansion of animation in Vietnam in the context of the country's remarkable adaptation to the global economy of the 1990s. The three keys were the collapse of the Soviet Union, the opening of full diplomatic relations and trade between the U.S. and Vietnam, and the emergence of the Internet. As Vietnam's leaders watched the collapse of their major donor nation, they looked for alternative sources of aid to rebuild their war-ravaged economy. The solution they seized upon was market capitalism in the form of private foreign investment. By opening their economy to investment from private companies, they managed to bring in more than $20 billion in funds, not to mention invaluable technology transfers from Taiwan, Hong Kong, South Korea, Australia, and European nations.

When diplomatic relations with the US were re-established in 1995, an additional source of private foreign investment was found, as well as access to funds from the World Bank, the IMF (International Monetary Fund), the Asian Development Bank, and other international organizations. Finally, Vietnam's link to the Internet dramatically lowered the cost of communications between Vietnam and the rest of the world. Particularly for producers of digital animation, the Internet allowed low cost file transfers between Vietnamese production facilities and a company's far-away design centers.

Sparx* managing director Guillaume Hellouin, whose company is currently at work on the Nelvana, Disney Channel and Métal Hurlant Productions' co-production pre-school series Rolie Polie Olie explains: "Our production philosophy is that Vietnam and Paris run in perfect harmony. We operate as if the two studios were on two separate floors of the same building. And our partners, with the appropriate passwords, can go into a dedicated FTP web site at any point and look at any particular scene that either Paris or Ho Chi Minh City is working on, on a quicktime file." Hellouin insists on doing only the key-frame animation in Vietnam, and keeps the modeling and rendering in Paris.

Similarly, Morgan chose to keep its design activities in San Francisco, where its most experienced animation designers are based, many of whom were drawn from Disney and other leading companies. These top designers provide both direction and feedback to the animators and programmers based in Ho Chi Minh City.

It just so happens that Vietnam's time zone is 15 hours ahead of Pacific Standard time. Ed Dua likes to joke that Morgan works twice as fast as most companies, since the work produced in Vietnam during the first 12 hours of the day is then transferred back to San Francisco around the time that U.S. producers are beginning their work-day. The U.S. team then has 12 hours to review and comment on the progress being made, after which files are sent back to Vietnam for the start of the next cycle.

Native and Colonial Influences
One of the main reasons these Vietnamese ventures are so productive, is the exceptionally strong Vietnamese artistic tradition. Vietnamese culture has always put a lot of emphasis on drawing and painting. "They traditionally train sculptors and lacquer painters, because these industries have job openings," explains Anne Collet. The French reinforced this tradition during their hundred-year colonial period by encouraging the formation of art schools.

At Pixi Vietnam, Anne Collet has put a lot of effort into training and has even set up a one-year program which enrolls about 40 new people a year, a dozen of which come out as full-fledged animators. In conjunction with the Vietnamese government, she is also starting a new program next September geared specifically at animation at the School of Fine Arts in Ho Chi Minh City. "We will start a new curriculum over five years," she explains. "Our plan is to teach students basic drawing techniques, with an eye to anatomy for animation."

Training also played a part on the 3-D side at Pixi Vietnam. "We had developed a pioneering method in France to convert traditional 2-D pencil animators into 3-D animators in record time. We applied it to Vietnam exactly like we had done in Paris," says Guillaume Hellouin. The animators there "work under the guidance of one of the top CG animators in France, who moved to Ho Chi Minh City for us almost two years ago," he adds.

Ed Dua also cites widespread knowledge of English as another reason for Morgan's success in Vietnam. He credits the French colonial era with introducing the Vietnamese to a Western-style alphabet, making it much easier for Vietnamese students to learn French and English. Today most Vietnamese high school and university students study English. As a result, the animators and programmers hired by Morgan are nearly all fluent in the language. This makes it much easier for Morgan staff to train their Vietnamese counterparts and explain new projects. The widespread use of English is an advantage Vietnam shares with India, where many observers of the Indian software development scene see it as a major contributor to India's success.

Sparx* worked on the CG-animated series, Bob and Scott. © 1998 Fox Kids. All Rights Reserved.

Both Anne Collet and Ed Dua also praise the work of their managers. "It's a hard country to handle," says Collet, who explains that the French managers and head animators who work for her "either pass the first three-month period and adopt the place, or else break down because it's too hard, or they become too sick." The head animator at Pixi Vietnam is half French, half Vietnamese, and has had an easier time of it. For his part, Ed Dua doubts that Morgan would have made nearly as much progress without Phil Tran's leadership. His "great advantage is that he combines his understanding of Vietnamese culture with his U.S. education and management style," he says.

An Expanding Picture
Looking to the future, Udo Sabiniewicz, who heads FX Animation and Anicolor in Germany, should be opening a studio in Ho Chi Minh City in the next few weeks, a project he is undertaking in close collaboration with Gerhard Hahn's Hahn Film Productions. They plan to work mainly on the modeling of 3-D animated backgrounds in Vietnam, and will keep the texturing and rendering in Postdam. Udo has had many years of experience in Southeast Asia but chose Vietnam because "it's the best place to find very high skilled workers at such wages." Several years ago, when he tried to set up his first venture in Vietnam, Udo taught a few classes in computer imaging at Ho Chi Minh City's largest private university, Van Lang. Through his contacts there, he has been able to find the skilled staff that he will need for his new studio. He hopes to have 30 to 40 people trained to work on Silicon Graphics machines within the next four months. Hahn Film is one of the leading animation houses in Germany. They have produced many series for television, like Benjamin Blumchen, and features for theatrical release, including Werner Beinhart, a major blockbuster in Germany.

Ed Dua, for his part, is confident that he can continue expanding the organization he has built in Vietnam. As to expense levels, Ed estimates that Morgan's cost of completing animation projects is about 30% less than it would be if all of the work were done in San Francisco. This figure takes into account the fact that design work is done primarily in the US, and that travel and communications costs are higher than they would be if all work were done locally. These savings, which Ed terms substantial, also reflect the cost of setting up operations in Ho Chi Minh City. Suffice it to say that Morgan can afford these costs because it does a large number of projects for its many partners, and is in Vietnam for the long term. No company could expect to achieve these savings if it had to set up operations in Vietnam for a single project.

In her studio, Collet hopes to add 100 staff members per year for the next seven years. Then she'll stop "because I want to bring them to the feature level. I plan to take half the staff, and have them work on features, and keep the rest of the animators to continue to work on television series."

Hellouin has feature ambitions also. "Right now, we handle top-quality, full key-frame, almost full animation, with seven to eight characters per scene, all fully animated and even some animated backgrounds," he explains. In addition to Rolie Polie Olie, he has been working regularly on Bob and Scott, a series of cartoony interstitials in the Tex Avery style, which Fox Family Channel just licensed for broadcast in the fall. "Down the line, I hope to set up a full feature quality team, and we're close," he beams. "It takes a lot of energy, it's a difficult and lengthy process, but five years down the line, I hope to have a powerful, pleasant studio. I feel like I'm gardening, trying things out here and there, and some grow and bloom in the right way, and others you have to trim or pull out completely."

Anne Aghion is an animation production consultant based in France and the United States, who worked with Pixibox Studios.

John Merson is a consultant and director of several software and Internet companies, including IBM, Intuit, and Net Earnings. He has helped several software companies establish partnerships in Vietnam, and advised the Vietnamese government on software policy.

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