The entry of local conglomerate Lippo Group and Korea’s CJ CGV into Indonesian exhibition looks set to shake up a market that has huge potential but has so far failed to grow.
The Riady family’s Lippo Group is planning to build 1,000 screens over five years across the country under its Cinemaxx brand – initially focusing on second and third tier cities before moving into major metropolises such as Jakarta.
The huge conglomerate – which has interests in retail, media, real estate, hospitality and healthcare – is well placed to expand Indonesia’s exhibition infrastructure as it owns shopping malls and has the deep pockets and political connections necessary for the job.
In recent months it has been signing deals with technology providers such as Masterimage 3D, Dolby Atmos, GDC and Barco and is also developing its own giant screen brand MegaMaxx. “Our goal is to offer state-of-the-art technology with first-class amenities,” said Cinemaxx CEO Brian Riady at this year’s CinemaCon.
Cinemaxx also plans to become a leading distributor in Indonesia. New head of film acquisition and distribution, Michael Sim, was in Cannes this year to start talks with major sales agents.
Meanwhile, Indonesia’s Blitzmegaplex is also set for expansion following the recent IPO of the exhibitor’s parent company PT Graha Layar Prima. CJ CGV is now a major shareholder in Blitz following its listing on the Jakarta stock exchange, and plans to contribute its cinema management expertise to the company’s expansion.
In the run-up to the IPO, Blitzmegaplex told Reuters that it planned to use the funds to build 15 cinemas over three years at a cost of $35m. It currently has 11 sites and plans to open two more in the next year before a more rapid rollout.
Although Indonesia has the world’s fourth largest population of 253 million people, it only has around 800 screens, most of which are controlled by Cinema 21, which has enjoyed a monopoly in distribution and exhibition since the Suharto era.
As the country remains under-screened, Indonesia’s annual box office is only around $250m – the same size as Singapore with a population of 5.5 million – although precise figures are difficult to track as only admissions are counted and ticket prices vary wildly between $2.50 and $7.50.
Blitzmegaplex entered Indonesian exhibition in 2006, but struggled to expand rapidly and at times found it difficult to gain access to product in the monopolised distribution sector. Cinema 21 subsidiary Omega handles all US studio films and also acquires both local and foreign films to distribute.
But the market could grow rapidly if competition is able to flourish: Indonesia has a rising middle class with disposable income and a young, social media-savvy cinema audience. The country also has a thriving local film industry, producing around 100 films a year, and has recently hosted overseas productions such as The Philosophers and Java Heat.
The bulk of Indonesian films are comedies, horrors and Islamic-themed romances with limited export potential, but filmmakers such as Gareth Huw Evans, with The Raid and its sequels, and the Mo Brothers, who recently directed Killers as an Indonesia-Japan co-production, have put Indonesian genre filmmaking on the map.
Following its move into Chinese and Vietnamese-language production, CJ CGV’s sister company CJ Entertainment is also planning to produce Bahasa Indonesian-language films. The company is currently developing a slate of around seven to eight Bahasa titles and plans to release the first few over the next year.
CJ took a similar course in Vietnam, where it bought out local exhibitor Megastar Media in 2011 and is gearing up to release its first Vietnamese production, Let Hoi Decide, which it co-produced with Chanh Phuong Films. The gay-themed comedy is directed by Charlie Nguyen (The Rebel) and stars local comedian Thai Hoa.
Indonesian producers could also receive a boost from the recently established Indonesian Film Council, which is developing a three-year strategic plan to develop the local film industry. However the new body currently has limited funding in the run-up to Indonesia’s presidential elections in July.
A new film festival, Equator Film Expo (EFX), which will have a focus on co-production, is also being launched in Indonesia next year. Although the venue has yet to be decided, the event has pegged out dates of March 27-30, which should enable industry professionals to visit the country immediately after Filmart in Hong Kong.