Hollywood Finds a New Golden Age of Cinema in Indonesia
(Bloomberg) -- Hollywood studios and global cinema chains are funding a new golden age in Indonesia’s movie industry as box-office receipts soar and new screens open at a rate of about two a day.
The resurgence of Indonesia’s movie industry, which had slumped since its heyday in the 1980s, is being driven by three factors that have come together in the past few years: the opening to foreign investment in 2015, rising wealth, and a push by major film studios and distributors to make more content for international markets.
“There’s been a change in lifestyle,” said Catherine Keng, corporate secretary of Cinema 21, Indonesia’s biggest owner of movie theaters. “We have more muscle to expand.”
In 2015 Indonesia sold 16 million cinema tickets. In 2017, the number had jumped to 43 million. And that’s still barely a quarter of the number sold in the U.K., which has a fourth of the population of the Southeast Asian country.
A sign of the changing lifestyle is tucked away behind Cinema 21’s venerable art deco-style Metropole, which was built when Hollywood itself was going through a golden age. In a low, white building, part of the chain’s Premiere brand, wealthy Jakartans pay 100,000 rupiah ($7.07) each to view the latest blockbusters in cosy theaters that offer waiter service and big, padded armchairs that recline at the touch of a button.
Like in other countries, the luxury venues are part of a response from cinema operators to fend off the threat from streaming services such as Netflix and Amazon Prime. But in Indonesia, a vast and diverse archipelago of 260 million people, even sales of ordinary tickets are soaring.
Indonesians with more to spend on leisure are flocking to new multiplex malls, often filled with high-end brand stores. Average monthly wages rose about 3 percent to $200 last year, while inflation and joblessness are near the lowest levels in decades.
On top of that, the industry got a major boost with the 2015 decision to reopen production, distribution and cinema ownership to foreign investors. A flood of money followed. Singaporean sovereign wealth fund GIC Pte pumped 3.5 trillion rupiah into Cinema 21 in December 2016 to expand the chain.
Since the change in rules, Cinema 21 has added more than 170 screens and plans to open 164 more this year, giving it 1,200. Over the next decade, the total number of screens in Indonesia is projected to rise to 7,500 from the current 1,700.
Mexican cinema giant Cinepolis de Mexico SA has bought a stake in Cinemaxx, owned by the Lippo Group, while a local unit of South Korea’s CJ CGV Co. is now in more than a dozen Indonesian cities. Korean retail conglomerate Lotte Group has acquired land to build at least 60 cinemas in the country.
Indonesian Investment Coordinating Board chairman Tom Lembong said Indonesia’s cinema sector, as well as the local film industry, are now booming.
“Ironically, and I see this time and again, the very companies that were protesting heavily against opening up, three years later have become filthy rich because suddenly they receive international capital,” Lembong said in an interview.
Hollywood studios looking to expand international audiences have also come knocking. One of the biggest hits last year, “Wiro Sableng 212,” or 212 Warrior, an action-comedy set in the 16th century, was a collaboration between an Indonesian studio and Twentieth Century Fox.
“Now producers can dare to invest more and think bigger,” said Cinema 21’s Keng. “It’s a new, exciting time for the Indonesian movie industry.”
Hollywood titles are still the mainstay — “Avengers: Infinity War” was the biggest movie in Indonesia last year, selling 8 million tickets — but demand for local films is also picking up. In 2013, just two locally produced films sold more than a million tickets. Last year, 13 hit that mark.
That’s partly thanks to movie streaming companies like Hulu, Netflix and Amazon Prime that are looking to make or buy locally made content to expand audiences.
Last year, Netflix-backed “The Night Comes for Us,” a gory crime drama written and directed by Timo Tjahjanto, was released in more than 190 countries. "Indonesia certainly represents a sizable opportunity for us," Netflix said in an e-mailed response. "Netflix is investing in Asia content and talent, creating new global demand for Asian content."
The potential rewards for Indonesian filmmakers are large. In 2017, the horror flick “Pengabdi Setan” or Satan’s Slaves was the biggest locally produced film, with a budget of 2 billion rupiah. Telling the story of a grieving family haunted by past events, it took 155 billion rupiah at the box office in Indonesia, selling over 4 million tickets, and was released in more than 40 countries.
The film, by director Joko Anwar, was a more than symbolic example of the industry’s revival since the boom days three decades ago. Set in 1981, it’s a recast of a 1980 Indonesian classic of the same name.
©2019 Bloomberg L.P.