A film industry body has come out against the government’s plan to open up the sector to foreign investment, saying liberalization would undermine the interests of local players.
The film sector is one of several reportedly being opened up to foreign investment through the government’s revision of the “negative investment list.” According to media reports, the government will allow foreigners to own up to 49 percent of Indonesian film companies when the revision of the list is finalized.
Rudy Sanyoto, the secretary general of the Indonesian Film Studio Association (Gasfi), said he supported opening up filmmaking to foreign investment but opposed liberalizing the sound recording and film duplication sectors.
“I support the filmmaking sector being opened to foreign investors because Indonesian filmmakers still lack the high-quality special techniques that you see in Hollywood films,” Rudy said.
But he said the domestic industry already had “more than enough” capacity and capability in the other two areas.
“For the sound studio sector, I can safely say that local players have existed in the business for the past 30 years and most of the equipment they use is more than 10 years newer than what their counterparts in neighboring countries like Malaysia are using. So we don’t need foreign investors,” he said.
Rudy said Gasfi was firmly opposed to liberalizing film duplication. He said there was no need to allow foreigners to invest in the sector because Indonesia already had 12 times as much duplication capacity as it needed.
“So for it to be opened to foreign investors would be an inefficient waste of existing capacity,” he said.
Rudy said 3,500 copies of local films were made and distributed in 2009.
“The quality [of local duplication] is good. Some 98 percent of our films are duplicated here,” he said.
Foreign films, including Hollywood blockbusters, are still being copied abroad.
Foreign film production companies, particularly those from the United States, are keen for the government to open up the sector so that they can copy the films in Indonesia.
While the film-duplication market in Indonesia is still relatively small, it is seen as having major potential because of the country’s large population and prospects for economic growth.
Rudy said the average cost of duplicating a film in Indonesia was $1,250 per copy. With about 3,500 film copies made last year, this equated to turnover of about $4.38 million.
If the more than 3,000 copies of films that were imported last year had been copied in Indonesia, this would have boosted the size of the industry to more than $8 million.
Rudy said the government should support the local film duplication industry so it could develop into an export industry.
“Countries like Malaysia have banned their films from being duplicated abroad. This is also what we should be doing, not opening the sector up to foreign investors,” he said.
Gita Wirjawan, chairman of the Investment Coordinating Board (BKPM), defended the liberalization plan, arguing that the entry of foreign players would provide benefits to the domestic film industry.
“I think our nation’s film industry could be more optimal if it were to be fully opened to foreign investors,” Gita said.
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