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ilm industry players point out that the shortage of movie theaters has shrunk the market potential for local films, a problem that the government could help fix by opening doors to foreign investors interested in operating movie theaters in Indonesia, stakeholders say.

The government, through the Investment Coordinating Board (BKPM), has placed movie theaters under the negative investment list (DNI) — a list that notes the various sectors closed off to foreign
investment.

Michael C. Ellis, the president and managing director of the Motion Picture Association (MPA) for Asia Pacific, said that overseas investors, notably those from the Asian region, had shown interest in building cinemas to tap into the market potential of Indonesia.

“But the thing that is stopping them is the negative investment list,” he said on Wednesday.

It has been previously reported that Korean business conglomerate Lotte Group was interested in establishing around 100 movie theaters in Indonesia. However, those plans have been put on hold until the government has completed the ongoing revisions of the list.

As many as 675 movie screens are spread across Indonesia, data released by Screen Digest in March suggests. With a population topping 240 million people, the number indicates that there are roughly three screens for every 1 million people in the country.

The ratio of screens per million people in Indonesia is a far cry from figures in neighboring countries in the Southeast Asian region. Singapore heads the list with roughly 34 screens per one million people, followed by Malaysia with 22 screens, Thailand with 11 screens and the Philippines with 7 screens.

Chand Parwez Servia, a veteran film producer, said that the local film industry could indeed benefit from the presence of more movie theatres, given that there were still provinces and cities across the country without a single movie screen.

“The spotty distribution of screens has shrunk the market potential of the local movie industry,” he said.

According to Chand, an increase in the number of screens would mean that local filmmakers would have more venues through which their movies would be screened, and hence, earn higher revenues, which could be re-invested into the production of future films.

The presence of more screens would also help solve a problem faced by the local film industry — tough competition from foreign movies for screening periods, he noted.

Film directors and producers have previously pointed out that the deluge of local and foreign films released per week amid the lack of movie screens had prompted movie theaters to roll out movies at a faster rate. Local movies have to build up large audiences within a week, or risk losing their screen time to newer local movies or foreign blockbusters.

“The infrastructure related to accessing movie theaters has to be considered as well,” Chand noted.

Michael further added that increased investments in the establishment of movie theaters could potentially double the number of movie theaters, and benefit sectors closely related to filmmaking, such as film distribution.

In 2010 alone, the film and television industry contributed US$845.1 million to GDP, and chipped in $86.6 million in direct tax revenues, the Oxford Economics Report points out. The report added that, when considering the multiplier effect the film and television industry had on other sectors, the sector contributed $2.98 billion as a whole to GDP, or 0.43 percent of overall GDP.

Approximately 27,400 people work in the film industry, and 491,800 more work in industries affiliated with the film industry, the report also says.

“Therefore, having a strong film industry is also good for employment in general, given the significant multiplier effect of the film industry,” he said.