Jakarta Globe | Insight

Unclear Policies Threaten Film Industry

Jakarta. Weeks before Joko Anwar’s latest film “Pengabdi Setan,or Satan’s Slave, opens in cinemas, producer Sunil Samtani from Rapi Films pursued a different promotion strategy.

Banners of the movie can be seen across social media platforms and in various public spaces. This is an unusual approach for Rapi, but Sunil said his company is catching up with Falcon Pictures, who dominated the Indonesian box office in 2016 with “Warkop DKI Reborn: Jangkring Boss! Part 1,” “My Stupid Boss” and “Comic 8: Casino Kings Part 2.”

Falcon is known for their all-out promotions. Posters and trailers of their upcoming movies usually grace the sides of buses, billboards and Jakarta skyscrapers ahead of opening day.

However, movie promotion is not the only department that Rapi  has tried to improve. For the first time ever, Rapi Films is working with a foreign film company, South Korea’s CJ Entertainment, to produce “Pengabdi Setan.”

I feel like the business outlook [for Indonesian films] is changing. We usually never felt the need to find a partner. CJ took good care of Joko’s film, ‘A Copy of My Mind.’ It was sold in many countries. So we figured it is time to work together with another company,” Sunil said.

Rapi invested in 80 percent of the total production expense, reported to cost more than Rp 2 billion ($147,000). CJ Entertainment funded 20 percent of the film’s production costs and serves as both co-producer and agent for Joko’s “Pengabdi Setan.”

In attempt to draw larger audiences to the film, CJ has also moved to screen the film in 4DX, the first Indonesian film to do so.

“We try to be more than just an international agent,” said Yoon Min, who represents international film production for CJ. “We are also involved in terms of production locally. And we do give our inputs in terms of scenarios and marketing.”

Min said it is too early to disclose whether or not “Pengabdi Setan” will be screened in Korean theaters. But apart from handling theatrical and distribution rights, CJ is also looking at the possibility of remake rights.

What happened behind the screen of the film is a signal of change and improvement for the local film industry, which already saw tangible improvement’s at last year’s box office sales. A recorded 30 million film-goers went to the theater in 2016 to watch Indonesian movies, up from 16 million viewers in 2015. 

[Indonesia] has been proven for its humongous potential. It’s really blooming right now. We want to contribute in Indonesian film industry’s growth, as well as just make really good content for overseas [market distribution],” Min said.

The huge potential of the Indonesian film business is starting to gain recognition, but the film community can still easily identify a number of challenges they must overcome to thrive. First, there is no available data for local box office sales from Indonesian film distributors. The number of actual theaters in the country is also still low, and 60 percent of a total 1,100 cinema screens in Indonesia are located in the greater Jakarta area.

In 2016, the Indonesian government finally removed film from its negative investment list (DNI), opening a door for foreign investors who want to seek business opportunities in Indonesia. Those investors are now welcome to fund local film production, distribution and exhibitions.

Nevertheless, the impact of the restriction lift is expected to take years.

Alex Sihar from the Indonesian Film Body (BPI) said the Indonesian government has yet to offer a clear frame of investment that may lure investors to come to Indonesia.

There is no forecast and overall look to investing in Indonesia. So everything is rather unstructured at the moment. We saw more than 120 film titles last year, so even though the film business only contributed to 0.16 percent, the growth went up 6.68 percent in 2016,” he said.

Abduh Azis, director of the State Film Company (PFN), said the restriction lift should be followed up with a more comprehensive strategy to lure investors.

We are lacking a strategic policy that benefits the local film industry. And it is difficult to take sides if we didn’t even have an investment scheme for local films,” he said.

Abduh took South Korea and France as examples.

When they started building their film industry, they realized they should give them support. They offer loans for [commercial] films and grants for non-commercial films. These are the things that filmmakers need.”

Producer Meiske Taurisia said it is important to boost the number of screens in areas outside Java because they need government attention the most.

‘The government must put an effort to lure new players in the industry. If it’s just the same old players, the restriction lift is not going to make any change,” she said. “I certainly hope the investment will target underdeveloped areas, but so far, I only heard one main player who will launch a partnership with a foreign company.”

Hilmar Farid, culture director general at the Ministry of Education and Culture, said the ministry has yet to create a ministerial regulation for the Investment Coordinating Board (BKPM) regarding foreign investment.

In a new ministerial regulation that we are currently working on, we are only asking for a foreign company to give us a copy of a permit from BKPM, because BKPM is the one who handles technical issues regarding the permit for foreign investment,” he said.

Meanwhile, deputy director of investment monitoring and implementation at BKPM, Azhar Lubis, said the board expects the 2016 restriction lift to improve film production, but not necessarily distribution and exhibition.

We were hoping that we would be able to present Indonesia as a destination for filming to help boost our number of tourists. Not the film exhibition, but the production. We’re expecting foreign companies to start building big studios in Indonesia, so more movies can be filmed here. That’s not what’s happening right now.”

In 2017, BKPM received only one Singaporean film distribution company that took the DNI lift as an opportunity to do business in Indonesia.

That’s normal. It’s only been a year. Investors need a lot of time,” Azhar said.

Azhar also said that Indonesian film exhibition is lacking in demand due to numerous choices of free and or more accessible entertainment.

It’s all about demand. Going to the movies is not a primary need for many Indonesians. They will go for clothes, houses and food first. And then education and health. The important ones. You can watch new movies on television or YouTube,” he said.

For the upcoming miniserial regulation, Hilmar said the ministry is mainly focusing on the gap between Film Law no 33/2009 and Local Government Law no 23/2014 about permit grants for film companies.

The Law no 23/2014 states that film is not to be handled by the local government. It can only be handled by the central government. So if people want to build movie theaters outside the capital city, let’s say, Sorong, they still need to get a permit from the ministry. We are trying to ease the permit. Hopefully, the new ministerial regulation will offer a solution,” he said.

The new ministerial regulation, which Hilmar expects to be out by the end of September, may offer a solution for film development in underdeveloped areas. 

Based on Film Law no 33/2009, exhibitors are required to report their number of viewers to the Ministry of Education and Culture, who then publishes that data for the public to view. Unfortunately, the film law does not sanction companies that refuse to provide data.

Abduh said that while the government is working on various regulations, the same problem remains.

When we talk about film, we always have to talk about the Ministry of Education and Culture, but every issue requires interconnectivity between ministries and other government bodies. That’s what they need to work out the most,” he said.

We have enough regulations, but we need policies that support investment scheme in films so the film industry will grow. I said our film has just started growing right now, because we cannot call it a real industry yet. The ecosystem does not exist,” Abduh said.

BPI and the Creative Economy Agency (Bekraf) are already working together on a solution to further develop the local film industry.

On Nov. 15-16, they will host the Akatara Indonesian Film Financing Forum – the first ever film market to cater to private investors who are looking to establish partnerships with Indonesian film companies. The event aims to connect local production houses, such as MD Entertainment and Falcon Pictures, with various stakeholders.

Angel investors, exhibitors, brand managers, local and international buyers […] and local investors who are looking to get into the film business but not knowing how and who to talk to,” said Alex.

Alex and Ari Juliano from Bekraf said they hope the event may help educate investors about the current film business climate in Indonesia.

Investors will always need clarity on how regulations about investments work in film. We will always guide and conduct intensive dialogue with them. So once they decide to invest, they know their rights, responsibilities and the Indonesian government’s commitment in the respected field,” Ari said. 

Additional reporting by Diella Yasmine, writing by Lisa Siregar