In February 2019, halfway through the research, we got a piece of data from the High Technology Park that changed the structure of the report. We had been planning to write three sub-sector chapters in detail — outsourcing, software publishing, e-commerce. We had identified hardware and entertainment as supplementary sectors to be covered briefly. Then the HTP director’s office sent through the resident-revenue breakdown for 2017, which we had been waiting on for a fact-checking exercise.
Three of the residents — animation studios producing YouTube content for children — had collectively generated about 84 million KGS in revenue in 2017. Approximately $1.2 million USD. The counterparty on the revenue lines was Google Ireland Limited, the entity through which YouTube routes payouts to creators outside the United States. The three studios together accounted for roughly 20% of total HTP revenue that year. Each of them was producing 2D and 3D animation aimed at the US, Canadian, and UK children’s-content markets, distributed entirely through the YouTube platform.
We had had no idea. The animation industry in Kyrgyzstan was not on the list anyone we had interviewed had mentioned as significant. The sub-sector was invisible in the public conversation about IT. It was also, by revenue, on the same order of magnitude as the largest software development outsourcing companies in the country. That was the moment animation moved from a supplementary chapter to one of the four sub-sectors the report would cover at full length.
What the count looked like
- Specialists working in the sub-sector: more than 450. Approximation, because the community was forming faster than anyone could count it.
- Number of organisations / companies: roughly 10 large companies and more than 30 small ones in the YouTube-producing community. More than 250 local Kyrgyz YouTube channels of all sizes, of which the YouTube-economy producers were a subset.
- Revenue: the three HTP residents totalled ~$1.2M USD in 2017. Total sub-sector revenue across all 40+ companies was not determinable, but the comparable channels-targeted-at-the-local-market range (per SocialBlade data) was $179 to $2,850 per month per channel.
- Gender composition: 44% women. The highest female participation rate of any IT sub-sector in the report.
- Average age: 22–25 across the YouTube-producing community.
- Geography of services: USA, Canada, Europe. Specifically targeting markets where YouTube CPM rates were highest.
- Regional distribution: most companies and specialists were in Bishkek, though community members had been identified in Osh, Talas, and Jalal-Abad too.
- Named HTP-resident studios: Wanthera Corp, Utoonz, Yoyo Kids, Life Great Studio, Teddy Kids, Youkids Studio, Sharks Animation, Aziz Animation Studio, 2D Kings, Cake Pop Finger Family Songs, Sunrise Studio, Aliens TV, Kids Planet. Plus Individual Entrepreneurs: Mirzamatov IE, Djunusov IE, Osmonov IE.
How the YouTube economy actually works
The chapter spent the most time, of any chapter in the report, explaining how the YouTube revenue model functioned — because without that, the numbers wouldn’t track. Two terms held the whole thing together:
Cost per Mille (CPM) is what an advertiser pays for 1,000 ad impressions. The 2018-2019 range for video ads served against US audiences was $10 to $20 per 1,000 views. Against Indian audiences, dramatically lower. Against UK and Canadian audiences, similar to US.
Revenue per Mille (RPM) is what flows back to the channel owner. YouTube takes 45% of CPM. The publisher gets the remaining 55%. So for a video with CPM=$6 in the US market, the publisher receives roughly $3.33 per 1,000 views. The same video, watched by an Indian audience, yields RPM of about $1.50.
The Kyrgyz studios had figured this out. Their content targeted the English-speaking children’s market specifically: 2D and 3D animation, nursery rhymes, finger-family songs, educational content for pre-schoolers, all in English with US-accent voiceover and US-market visual references. That was not an accident of language. It was a CPM-arbitrage decision, made by founders who had read the math the same way a freelancer on Upwork reads which countries pay best.
What the three HTP studios looked like, in numbers
The most-cited single channel was Kids312 — operated by Wanthera Kids under the “Nursery Rhymes” brand. 3,729,103 subscribers as of February 2019. 4.62 million monthly views in January 2019. 890.01 million cumulative views. Entered the Top 10 most-popular YouTube channels in the world ranking in February 2019. The channel is structurally similar to Cocomelon (US-based), which the chapter cited as the global market leader in the children’s-content vertical at the time of the research.
The other named flagship — the Aziz Animation Studio HTP resident — was running its own multi-channel operation in parallel. Several of the 30+ smaller studios in the community were producing content under sub-brands that fed into the larger studios’ networks.
Why women’s participation was so high
The 44% female workforce figure was a structural feature, not an accident. The animation industry has roles that map differently from coding:
- Animators — visual creative work, drawing-and-design-intensive, no formal STEM credential required.
- Designers — UI/visual, again creative more than technical.
- Voice talent — including the English-accent voiceover work that the children’s-content brands depended on.
- Scriptwriters — content for episodes, songs, lesson-format videos.
- Composers and sound producers — audio work.
- Project managers — coordinating multi-person production teams.
The chapter noted explicitly: “Women tend to dominate in the creative visual areas, including graphic design, digital drawing, 2D and 3D animation, painters, others.” The training pipeline for these roles was short — one to three months for foundational competence — and was happening inside the companies themselves, not at universities. Several of the founders we interviewed had said directly that they were ready to invest in training but needed support with room space and equipment to scale that internal training to a community-wide program. The chapter recommended that.
The contrast with software development outsourcing — 6% women in development roles — was sharp. The contrast with e-commerce — 50% women in 18–25 age range — was the only one comparable. These were the two sub-sectors of Kyrgyz IT in 2019 that were creating jobs at scale for women, and they were creating them under quite different conditions: e-commerce in spare rooms and Instagram DMs, animation in HTP-registered studios with full equipment and 6-figure-USD revenues.
The community, and how it formed
One of the things the chapter spent a paragraph on was how the animation community in Kyrgyzstan had formed, because the answer to that question is unusual.
In 2015, one of the first specialists started developing content for YouTube. He attracted colleagues and acquaintances who worked in video production and other related fields. A series of seminars was held. From that, the community formed — informally, organically, in someone’s office, then in larger venues. By 2017, the YouTube community in Kyrgyzstan had received international recognition when one of the first studios received a Golden YouTube Button Award.
What the chapter said next is worth quoting directly: “The YouTube community is very collaborative. There are no barriers to entry for new companies, except for the technical requirements in the work. Additionally, some companies (first ones) are ready to engage in the training of new specialists. Community members are open to each other and collaborate in joint development and training. Companies jointly organize professional trips to foreign animation and cinematography studios and they have invited studio representatives from Russia and Belarus to come to Kyrgyzstan and share experiences.”
In other countries, one respondent told us, animation communities competed strongly and didn’t always know each other. In Kyrgyzstan, by contrast, the founders knew each other personally, shared training resources, and in some cases shared physical studio space. The community was so small in 2015–2016 that this was the only way it could scale; by 2019, with 450+ people working in it, the collaborative culture had become a structural feature. The chapter flagged this as one of the reasons the sub-sector was likely to keep growing faster than competitors in neighbouring countries.
The MCN gap, and what filling it would unlock
One of the structural opportunities the chapter named was the absence of a Multi-Channel Network (MCN) company in Kyrgyzstan. MCNs — there are three operating in neighbouring Kazakhstan (Yoola, Air, Genesis) — function as the intermediary between YouTube and content creators. They help small channels get advertiser interest, handle moderation, provide technical support, do legal work on copyright. They charge 20–30% of channel revenue. They get special treatment from YouTube, including channel moderation and access to quick technical support.
For a new channel — under the 1,000-subscriber, 4,000-watch-hours-cumulative threshold to attract advertiser interest — an MCN can make the difference between a viable production company and a hobby. Without one in Kyrgyzstan, several of the smaller community members were either signed with Kazakh MCNs and giving up 25-30% of their revenue cross-border, or operating without an MCN and finding the business of monetisation difficult to navigate.
One of the founders we interviewed flagged this directly. “At present, such companies are not represented in Kyrgyzstan.” The community at the time of the research was actively discussing whether one of the established Kyrgyz studios should pivot to become an MCN — a transition the chapter projected was likely within 2–3 years.
Other distribution channels, and the diversification opportunity
The chapter spent time on what would happen when the Kyrgyz animation industry stopped depending exclusively on the YouTube distribution channel. The candidates the report identified:
- Vimeo — for niche or premium content.
- Facebook and Instagram (IGTV) — for short-form, social-first content.
- Netflix — for licensed full-length content. At the time of the research, several of the named studios were exploring whether their longer-form work could be licensed to Netflix.
- Foreign media channels — Nickelodeon and similar children’s networks. Direct licensing rather than YouTube distribution.
Each of these would let the studios reduce their dependence on YouTube’s algorithm changes (a problem the chapter named as one of the top operational risks), build their own subscriber relationships, and potentially extract higher revenue per minute of content.
The chapter also flagged a derivative opportunity: physical-merchandise production based on the studios’ animation IP. Toys, plush characters, branded merchandise. For this to work, the studios needed reliable e-commerce infrastructure to sell into Western markets — which is where the e-commerce chapter’s logistics findings came back into the picture. The animation industry’s growth was constrained, partially, by the e-commerce sub-sector’s logistics problems.
The problems studios named
The cross-sector eight applied here in a specific configuration:
Shortage of specialists — animators, designers, voice talent. No training programs or any courses on these topics existed in Kyrgyzstan in 2019. Digital drawing, sound processing, mobile development, game design, marketers, copyright lawyers, mobile-industry analysts — all named as gaps.
Underdeveloped community. Despite the collaborative culture mentioned above, the community was small relative to the global market it was producing for. Most of the 450+ specialists were in Bishkek; the regional pipeline was weak.
Lack of infrastructure for cinematography. No film studios in the country with the kind of physical production space that high-end animation studios use. Most of the work was being done in office space, with computers and graphics software but no dedicated production environment.
Frequent rule changes on the YouTube platform. Every algorithm update or content-policy change required studios to revisit their production pipeline. One channel-block — for a copyright issue or a moderation flag — could end a company.
No access to popular branded toys necessary for shooting. Some of the children’s content depended on physical toy props. Importing licensed toys for filming was expensive and slow.
Difficulty withdrawing earnings. Studios were paid through Google Ireland Limited. The path from Ireland to Kyrgyzstan ran through correspondent banks — the same payment-system constraints we documented in the cross-sector and e-commerce chapters. Several specialists used foreign payment systems to receive their earnings outside the formal Kyrgyz banking channel.
What the chapter recommended
The recommendations for animation fell into six clusters:
Establish educational courses in the latest production technologies: actors, directors, animators, sound producers, scriptwriters, artists, musicians, modeling specialists, compositional specialists.
Construct film studios. Multi-purpose pavilions that could serve YouTube production, full-length film production, and television shows. The pavilions could be rented to film crews from neighbouring countries.
State support for specific specialisms. The chapter cited Kazakhstan’s active support of the soap-opera industry as the analogous example. In Kyrgyzstan, “Jetics” (a fantastic children’s film released in 2018–2019) showed that there was state-level interest in the sector. The recommendation was to formalise that interest into targeted programmes.
Professional tours to countries with developed animation/multimedia industries. Invite professionals from New York, Hollywood, Europe, South Korea, and Russia to train local professionals.
Trainings for small enterprises focused on YouTube-economy adjacent areas: cooking shows, restaurant reviews, machine reviews, medical and educational topics. By focusing on youth and women engagement, the option of remote work was viable. Courses should include how to make money by selling logos, websites, and adjacent digital products — broadening the YouTube-economy skillset into the wider creative-economy market.
Simplify patenting, copyright, and IP protection procedures. Cross-references to the Kyrgyzpatent reform recommendation from the publishing chapter.
What had changed by late 2020
Animation is the sub-sector least disrupted by the pandemic. Production teams were already small, distributed, and tooled for remote collaboration. YouTube viewership grew sharply between March and August 2020 — the children’s-content vertical especially. The studios that had been producing for the English-speaking children’s market through 2019 found themselves in 2020 with more demand than they had production capacity for.
The MCN gap in Kyrgyzstan remained unfilled by the end of 2020. Two of the established studios had begun providing informal MCN-style services to smaller community members, but no formal MCN registration had taken place.
The training-program recommendation moved partially. By mid-2020, two of the larger HTP-resident studios had opened internal training programs to bring in new animators and sound producers, partially in response to the increased demand. The state-level film studio recommendation has not been acted on.
The income-receipt friction — the path from Google Ireland Limited to a Kyrgyz bank account — has not improved. Several of the studios still report receiving payouts through US- or EU-domiciled corporate vehicles owned by the founders rather than through direct receipt at Kyrgyz banks. That workaround is functional but it sits in a grey zone with respect to Kyrgyz tax law, and several of the founders raised this in our interviews as one of the reasons they had considered relocating the entity to Estonia or to Almaty.
The next post is the early-stage roundup — hardware, game development, and e-sports. Three sub-sectors that were too small to write at length in 2019, but each for a different reason.
Source: USAID Enterprise Competitiveness Project (2019). Analysis of the Information Technology Sector in the Kyrgyz Republic. Implemented by KG Labs Public Foundation; commissioned by USAID ECP / Nathan Associates / ACDI-VOCA, June 2019. Animation sub-sector covered in primary research January–March 2019: in-depth interviews with founders of named HTP-resident studios, members of the YouTube creator community, and HTP officials. Revenue figures from HTP resident reporting for FY2017. Channel performance data from SocialBlade.com as of 13 March 2019. CPM/RPM rate ranges from Blognife.com video-ad data (2017).