A lack of infrastructure and piracy remain the biggest challenges stopping the Indonesia’s film industry from achieving its full potential, an industry executive says.
Michael Ellis, president and managing director of the Motion Picture Association for the Asia-Pacific region, said that under-capacity movie theaters and video piracy prevented filmmakers from maximizing revenue from their productions in the country.
The MPA and Oxford Economics on Wednesday released a report that said earnings in 2010 from the film and television industries in Indonesia were $845.1 million, a 3 percent increase from the previous year. This is the first report about the economic contribution of the industry to Indonesia’s gross domestic product, they said. The nation’s economy grew 6.5 percent in 2011, after expanding 6.1 percent the year before.
“I’d like to see the Indonesian film industry grow at least similar to GDP growth, but it’s not happening yet,” Ellis said in Jakarta on Wednesday. In the past few years, the pace of growth in the TV and film industry has been below overall economic growth, unlike China.
He said in China, where the economy grew about 10 percent in 2011, the TV and film industry rose by 29 percent, boosted by continuing growth in movie theater numbers. Last year, Ellis added, an average of eight new cinemas opened each day in China.
Shanty Harmayn, a film producer and one of the founders of the Jakarta International Film Festival, said there were 675 movie screens in Indonesia. That means for every one million people, there are only 2.8 screens, she said, citing March data from Screen Digest. By comparison, Malaysia has 639 screens, which equates to 22 screens per one million people.
Ellis said several foreign investors were interested in opening cinema chains in Indonesia, but they were stopped by a rule forbidding outright foreign ownership of Indonesian cinemas.
“Of course it would be very difficult for companies, especially publicly traded companies, to invest in something when they can’t own them,” he said.
Lotte Cinema, part of South Korea’s Lotte Group, plans to open about 100 new cinemas in Indonesia. Foreign investors are only allowed to have 67 percent capital ownership.
Chand Parwez, a film and TV producer, said intellectual property rights are still under threat in Indonesia.
Ellis said that in the United States, 30 percent of a film’s revenue typically comes from theater screenings, while products such as DVDs, pay-per-view and television rights make up the remainder.
In Indonesia, he said almost all revenue comes from screenings in cinemas because consumers are reluctant to buy original DVDs, opting for cheaper pirated copies instead.
This year Indonesia released an internationally acclaimed movie, “The Raid,” which was also well-received locally. Ellis said it could be an indication of the industry’s improved performance.