Movie theater monopoly crippling local film industry

Movie theater monopoly crippling local film industry

Joko E.H. Anwar, Contributor, Jakarta

If you happen to drive past a movie theater outside the 21
Cineplex chain, take a good long look at it because you may not
ever see it again.

"Every week, there is at least one film theater that has to
close down," a representative of non-governmental organization
(NGO) Monopoly Watch, Samuel Nitisaputra, told the press.

Echoing many allegations that the 21 group, the country's only
major film distributor and exhibitor, has unfairly been ruining
competing businesses, the NGO accused the business group of
running a monopoly.

Having done investigations in five cities -- in Jakarta,
Bogor, Bekasi, Depok and Surabaya (East Java) -- the NGO reported
their findings to the antimonopoly watch-dog Business Competition
Supervisory Commission (KPPU) last Friday.

The number of cinemas in Indonesia has been reduced from 2,314
in 1989 to 1,280 in 1998 since the group, which owns the
country's only major Cineplex chain, took control of the
importation of Hollywood films.

The three companies in the group -- PT Camilla Internusa Film,
PT Satrya Perkasa Esthetika Film and PT Nusantara Film -- run
under one big company PT Subentra Nusantara Films which is
largely owned by former president Soeharto's relative
Sudwikatmono. And the group is only one of many examples of
nepotism by the country's former dictatorial ruler.

The condition was made worse by Film Law no. 8/1992 which
crippled the local film industry. The law, among other things,
requires filmmakers to report the movie scripts before they are
produced. If the story is not considered suitable, the film does
not get a permit.

In their report, the NGO described nine violations of the
Antimonopoly Law No. 5/1999 committed by the group.

One of the points is that the group prioritize movies to be
shown at their 21 Cineplex chains before they are screened at
other cinemas.

Since the companies also affiliate with major film studios in
the U.S., they hold exclusive distribution rights for the
imported films. Due to this practice, film theaters outside the
group would have to wait until all 21 Cineplex got their turn to
screen the films.

"As a result, other cinemas got low admission rates as they
only had old movies to be shown," Samuel said.

The NGO reported that out of 178 film screens in the capital,
102 of them are owned by the 21 group.

The group will also not show films in their Cineplex if the
movie had been shown before in theaters outside their group.

According to the NGO, the group did not only obstruct other
film theaters business but also hampered the revival of the local
film industry.

Samuel said that local film producers did not have the
bargaining power in negotiations to screen their films at the 21
Cineplex cinemas.

"I've talked to local film producers and they said they did
not even have a written contract when they showed their films in
21 Cineplex," Samuel told The Jakarta Post.

The fear is that since the group also took part in film
production, it is possible that in the future they will only show
films that they co-produce.

According to the NGO's report, beside importing and showing
films, PT Nusantara Film also take part in co-producing local
films including last year's art-house favorite Pasir Berbisik
(Whispering Sands).

Director of communication division of KPPU, Murman Budianto,
admitted it also found indications of monopoly practices by the
group.

Murman said it would study the report. If it found the group
had been practicing a monopoly there would be several actions it
could take to right the problems.

"We have the right to cancel agreements between the group and
other companies such as film distributors abroad," Murman said.

Murman also said it was possible for other film theater
companies to demand compensations for their losses because of the
group's monopolistic activities.

If the group, Murman said, refused to fulfill the sanctions
given by the committee if found guilty, the case could be brought
to court as a criminal case.

Unfortunately, 21 group did not want to give any comment
regarding the report.

When contacted via phone by the Post last Friday, Director of
Operations of the 21 Cineplex group, Jimmy Haryanto, only gave a
brief comment. "Lets just see," he said.