Demand for Russian content ensures growth for the animation market in 2023

In 2024, the animation market may grow by 15–20%, increasing its dynamics compared to 2023, in which it grew by 12%, to RUB 20–22 billion. Such estimates are given by a number of major market participants. The expansion was ensured by the demand for Russian content amid the departure of foreign studios. But experts also see factors that can slow down growth. These include a decline in the birth rate and purchasing power of the population, a general deterioration in the economy, as well as market saturation and long project release times.

Kommersant interviewed participants in the animation market about the results of work in 2023 and expectations for 2024. According to the co-founder of the Platoshka studio (animated series “Tsvetnyashki”) Anton Andreichikov, last year the market grew by about 12%, to 20 billion rubles. Two other Kommersant interlocutors in the industry talk about 22 billion rubles. In December 2023, the Animated Film Association reported that animation production had tripled in five years, exceeding 150 hours per year.

By the end of 2024, the market will increase by another 15%, says Anton Andreychikov. At the same time, he clarifies, “the active emergence of new studios and the production of competitive content in Russia creates high entry barriers for independent players.” Last year, Gazprom Media Holding predicted that the volume of the animation market at the end of 2024 would reach 21.9 billion rubles, and in 2025 – 26.5 billion rubles. with 10% growth annually. According to Soyuzmultfilm, growth in 2024 will be 15–20%.

The increase in the market last year was due to the demand for Russian full-length animated content, says Anton Smetankin, general director of the Parovoz animation studio. According to him, the company is now working to increase production, but “it takes time to create a volume of projects, since their implementation period is four to five years.” Therefore, the top manager expects more launches in 2024 and a large-scale increase in the number of premieres in 2026–2028.

The revenue of the Parovoz studio itself at the end of 2023 decreased from 757 million to 711 million rubles, according to SPARK-Interfax data. The company’s net profit increased from 6.8 million to 10.6 million rubles. Soyuzmultfilm reported that the company’s revenue in 2023 amounted to 1.9 billion rubles. with a “positive” EBITDA indicator: “Over 33 hours of animated content were produced (together with original films and “Formula of Water”), including 255 episodes of serial content for different ages.”

Anton Smetankin explained that the studio’s profit growth is associated with one-time commercial projects and “is not a trend,” without specifying the reasons for the drop in revenue. He calls the main risk factor for the market “a reduction in cash flows in the childhood industry.” “Measures of state support, which are now increasing in many areas, reach the children’s area last,” says Mr. Smetankin. He adds that the industry is facing rising costs such as salaries, rent and other expenses. Other animation studios did not answer Kommersant.

The animation market faced a number of growth-slowing challenges back in 2022. Thus, most transactions for the sale of rights to Western television channels and video services were frozen due to the outbreak of hostilities in Ukraine (see “Kommersant” dated April 1, 2022). Then animation companies announced problems with foreign software. The Ministry of Culture, in pursuance of the president’s instructions, has prepared draft amendments to the legislation, according to which the production and distribution of cartoons for children should switch to full state funding. However, the document was never adopted.

In 2024, market dynamics may be slowed down by economic instability and a decline in GDP growth, says Anton Andreychikov: “This will reduce the purchasing power of the population, which will affect the demand for licensed products.” A high level of piracy and the production of counterfeit products can also reduce the demand for licensed goods, as well as reduce investor interest, the expert adds. Competition in the licensed products market from both local and foreign brands and the availability of alternative products and services could put pressure on the growth and profitability of animation studios, he believes.

At Soyuzmultfilm, negative factors include a decline in the birth rate and the upcoming saturation of the OTT (online video) market with domestic content.

Yulia Yurasova