AADC 2: (Courtesy of Miles Films)

The good news is that more people are going to movie theaters to watch Indonesian films. In the first seven months of 2016, the number of viewers reached 16 million — and this year is expected to record the highest number of viewers since 2009’s 30 million.

After Ramadhan, the long Idul Fitri holiday in July was a box-office success, according to data collected by 21 Cineplex that controls 80 percent of screens nationwide. Biopic Rudy Habibie gathered 1.8 million viewers, romantic drama ILY from 38,000 Feet got 1.3 million while Raditya Dika’s comedy Koala Kumal (Shabby Koala) drew 1.6 million.

Along with Ada Apa Dengan Cinta? 2 (3.7 million), My Stupid Boss (3 million), Comic 8: Casino Kings Part 2 (1.8 million) and London Love Story (1.1 million), the holiday movies were recognized by the cinema chain as this half-year’s blockbusters.

The seven films were viewed by a total of 14 million people, or 88 percent of the number of viewers of the cinema chain, apart from the viewers at independent theaters and another two large chains.

Thanks to the presence of appealing movies, the market share of the national movies industry has also experienced an increase from 20 percent last year, when the total number of screens was 1,111, to 30 percent as of July with 1,188 screens.

But the bad news is that this partial data is far from adequate to serve as an indicator of how developed the national movies industry is.

An example is the flyer made available online on the first day simultaneous screening of AADC 2 in Indonesia and Malaysia in April. While the Indonesian flyer showed the number of viewers, its counterpart went further by making public the revenue made that day.

Absence of valid data on the number of viewers and revenue of each movies has led to a lack of confidence from foreign investors, although the government has scratched movies-related businesses from its negative investment list.

To solve the issue, the Creative Economy Agency (Bekraf) proposed the establishment of an online Integrated Box Office System (IBOS), which will be able to record real-time data from theaters.

The agency’s deputy for institutional and regional relations, Endah W. Sulistianti, said the system, adopted from South Korea, would provide valid data to be used by investors as the reference to receive tax incentives.

“Tax incentives would attract investors and in turn would boost the growth in the film industry, similar to South Korea in the past decade,” she said during a recent public discussion on investment in Jakarta.

The Malaysian government implements the Film Returns Incentive Scheme, with film producers entitled to receive 20 percent cash rebates should ticket sales reach at least 2 million ringgit (Rp 6.5 billion), while the French government provides tax returns to foreign investors in exchange for hiring local crews.

In South Korea, according to Endah, the government incentives also benefitted theaters through the establishment of facilities for people with different abilities.

The agency is currently drafting guidelines for the provision of incentives in the movies industry along with the protection of local resources.

Besides the box office system, the proposed incentives include certification for filmmakers, market research, capacity development, market access, investment access and facilitating Intellectual Property Rights.

For film production, the incentives could be available to local investment and also joint ventures with foreign investment.

REFERENCE POINTS

The chairperson of the Indonesian Film Producers Association, Sheila Timothy, who also spoke at the discussion, said that interested investors from South Korea and the US recently retracted their offers for co-production, post-production, sound and film screening due to a lack of concrete rules of the game.

“Aside from the need for valid data as reference for incentives to attract investors, at home we need it to measure market size and to determine the target for growth,” she said.

Film producer and non-chain theater owner Adisurya Abdy said the real-time data would save producers from the legwork of conducting their own surveys. However, he said the system could only be applied currently for major theater chains that have introduced online ticket sales, with most independent theaters relying on the manual system.

He argued that the proposed integrated box office system should also be applied to foreign movies screened in Indonesia to get data on the actual market share.

“We need to know whether moviegoers prefer Indonesian films or foreign films, which one has the larger chunk. It may affect the regulations, though,” he said.

Law No. 33/2009 on film requires theaters to allocate 60 percent of daily screening time for Indonesian movies. The regulation, said Adisurya, put small-time businesses in a difficult position unless all Indonesian films were of a similar quality with Hollywood blockbusters.

“We need to make a profit, too, because film screening involves a lot of money,” he said.

Filmmaker and producer Richard Oh said it was easier to get information on production costs and the revenue booked by foreign movies because they applied a transparent system for tax inquiries.

“Here, many producers benefit from the absence of such a reporting system. But if there’s nothing to hide, then why wait before releasing the data?”

According to Adisurya, many producers withheld the release of information on production costs because they wanted to avoid the assumption of producing cheap films.

“It would surely affect their revenue tax, especially when there were company sponsors involved.”

Indonesian Film Board (BPI) chairman Kemala Atmodjo said that while there was no existing regulation requiring the release of financial data, it could help both the movies industry and public to recognize the quality of the films being screened and public purchasing power, among other advantages.

“We have to make sure the purpose of IBOS before we determine the mechanism, [and] how it will work. Is it for the need to obtain valid data or is it made to avoid tax evasion?” he said.

Kemala said the government should also ensure it was not in conflict with existing regulations.

“If it is all clear, we could include it in the law on film. It’s about time to revise the existing regulation or, even better, to draft a new one that will benefit all stakeholders in the film industry,” he said.

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