Newsmaker Interview: Fauzan Zidni

The chairman of the Association of Indonesian Film Producers on the changing landscape of the film industry and how to further boost its growth

By Gilang Ardana and Karmila Bain
Monday, June 11, 2018

Since the film industry was removed from the Negative Investment List in 2016, much attention has focused on how it could affect overall industry growth. The drive to increase its contribution to the overall economy is challenged by piracy and lack of sufficient talent, pushing back industry players from producing more quality films. 

With emerging technology being actively adopted by other sectors, film industry players are being pushed to tap opportunities faster for the greater benefit of all. Yet the question remains, are industry players ready? How are they responding to the challenging developments in the industry?

To answer these questions, AmCham Indonesia reached out to the Association of Indonesian Film Producers (APROFI), one of the key associations in the sector, to set the scene.

The new chairman of APROFI, Fauzan Zidni, explained how players are able to thrive in the challenging environment of Indonesia’s film industry. Fauzan was the producer of “Republik Twitter” (2012); “Yang Tidak Dibicarakan Ketika Membicarakan Cinta” (2013) and the recent award-winning film, “Marlina si Pembunuh dalam Empat Babak” (2017).

Can you give us an overview on APROFI and its role in the industry?

Fauzan Zidni: APROFI was established in 2013. We are an interest group with 40 producers as members. We focus on capacity building and advocacy. In terms of capacity building, we facilitate knowledge exchange between our members. We also do a lot of things in policy advocacy – piracy is one of our priority issues.

We partnered with the Motion Picture Association [MPA], the international arm of the Motion Picture Association of America, for the past few years to advocate the government on piracy. Three years ago we held a copyright forum with MPA, and the follow up from the meeting was a joint regulation between the Ministry of Law and Human Rights and Ministry of Communications and Technology to regulate the site-blocking mechanism. Last year we also created an anti-piracy campaign, which is one of the most successful MPA campaigns [in term of views and engagement from industry players]. We cooperate with artist associations and all professional associations in Indonesia. What we are aiming for from this year’s World IP [intellectual property] Day is to create a similar forum to what we had before with MPA.

Still on advocacy, we advocated – together with BEKRAF [the Creative Economy Agency] – to take film from the Negative Investment List [DNI]. We are happy to see that currently foreign investment can enter production, distribution and also exhibition in the film industry. I think this is very important, as we need foreign investment to raise our standards; we need technology and knowledge transfer so we can produce better films.

We worked with BEKRAF and KOFIC (Korean Film Council) to facilitate business matching between Korean and Indonesian production house. 

We also worked with Busan Film Commission to conduct Film Leadership Incubator, to establish a stable basis for the production of diverse films in Asia via nurturing young, talented Asian filmmakers.

Was there any significant change in the film industry after the opening up of the DNI? How do you assess it so far?

We do have investment coming in exhibition and production. There are more films created with foreign cooperation such as “Wiro Sableng” [Lifelike Pictures and 20th Century Fox]. I do hope there will be more success stories from our box-office films so we can get even more investment. However, I don’t think we can see direct results after only two years; we also need support from others.

We still need screens, at the moment we have 1500 screens all over Indonesia. Exhibitors can only release two or three local films and two or three foreign films per week, it cannot be more than that. Currently, 40 Indonesian films were finalized last year but not yet given screening time. This year we have another 150 films, so in total there are approximately 190 films still queuing.

In December 2016, the Government of Singapore Investment Corporation (GIC) entered into a strategic partnership with PT Nusantara Sejahtera Raya (Cinema 21). GIC’s investment would be IDR 3.5 trillion to build more cinemas.

We also have other companies targeting construction of 1,000-2,000 screens within a few years. But in reality, there is a bottleneck due to lack of investment in other sectors, which affects the growth of the film industry.

To add screens needs a process. What we can see now is the retail industry experiencing decreasing trends. A lot of investment in mall construction has been put on hold. We need new malls to have new cinemas, so when that happens investors also hold their investment in cinemas so growth cannot be as fast as we targeted.

In terms of audience numbers, in the last two years we saw more than 20 films whose audience was above one million – which we consider a box-office minimum. We have 130 films on average per year being screened, yet the films whose audience was below 100,000 were the majority.

If we get an audience of less than 100,000 – let’s say we sell at Rp 30,000 per ticket, and the producer will get half the ticket price – most producers will not break even. Last year, 60 percent of films had audience under 100,000, the year before that was 75 percent. This needs to be addressed.

For other trends, we’ve seen the interesting development of over-the-top (OTT) film platforms. This is a great opportunity for producers because they invest a lot, they pay a lot for content. We have several players already here in Indonesia, we have Netflix, Hooq, Viu and Iflix. This is a big market. With OTT, people who previously didn’t have access to cinemas now have access to entertainment on their phones. With improvement in the Internet network, there are more Internet packages offered by telecommunications companies, which means the need for more content is increasing.

OTT replaced revenue previously gained from DVD. This is also an alternative to counter TV station moves to reduce their purchase of national films. OTT offered a good price, and because they are new they want the best content. This makes the demand way bigger than the supply and the price is increasing, which is good for producers. This is an opportunity for the film industry to benefit.

However, the opportunities offered by OTT will not be long-lasting if the government cannot ensure the protection of OTT content from piracy and illegal streaming sites. OTT will not break even if those practices continue. It just is not fair that OTT buys the content at the highest cost but people can access it illegally free of charge. We should give them [OTT] the opportunity to grow their business.

So you think the growing OTT model is good for the industry?

Yes. OTT is an opportunity. We already have many serials being made for OTT in Indonesia. Sometimes there is content that is not fit for cinemas – and because our TV channels are so heavily regulated, we can’t get that on TV also. OTT gives us that opportunity. We can also now create programs adjusted to OTT markets. Take a look at Netflix, it currently has a lot of serials, this year they invest $8 billion for original content. This is a big opportunity. Besides, for the consumer, some OTT is affordable. It can be Rp 40,000-Rp 50,000 per month, equal to one cup of coffee.

However, all of the investment coming in to OTT will not grow if we are not taking action on online piracy. OTT will work if strong anti-piracy regulations are enforced. Regulators need also to think on how to give tax incentives and let OTT flourish. I think we need to talk together with content providers and content makers on this OTT issue; we need to be consulted.

Do you think the overall industry is ready for OTT?

I don’t think it is about whether we are ready or not. Ready or not we should be ready. The question is actually how fast can we tap into the opportunities to deliver in that medium? This is our real challenge.

Currently we can see that OTT is evolving into production houses, they are also securing exclusive film deals for their platforms, or chip-in with other production houses to make great films. Those are opportunities, those are good for us.

Another interesting fact is the some films that don’t work for cinemas audience, gained an audience in OTT – even reaching the top 10 films [in OTT]. This needs further research. Is it because audiences are not willing to pay for cinema tickets? Is it because they don’t have the opportunity to afford/watch in cinemas? Is it because the film is poorly advertised? Or is it simply because audiences are waiting for the film to be on OTT? This will be an interesting study to help players be more prepared to embrace [digitization].

The latest BEKRAF data showed that the film industry’s contribution to the overall Indonesian economy is still very low. What changes are needed to improve this?

The first should be financing. We need to work on this because it is one of the pressing issues in the industry. With better financing, we can have high-value productions to create a better product.

The second should be our human capital. If, let’s say, we achieved 10 percent annual growth in the industry, or even get bigger funding, are we ready in terms of human capital? That is a challenging question. There is strict competition happening within the industry to get a crew to make a film. Competition also happens in getting good actors. We often hear Indonesians complain that [the film industry] always uses the same actors for all our movies. That’s actually because we are lacking actors with star-quality that can attract audiences. In addition to that, a proven director is usually contracted for more than four movies for a production house. We are not even talking yet about the crew under those people. I think government and industry need to be hand-in-hand in addressing this issue.

The third should be distribution. We need to ensure all players get the same opportunities to distribute their works to help break even on their financing.

We understand that the current Film Law is problematic. Does APROFI plan to push for a revision of the law?

In April, the DPR announced that the revision of the film law is included in this year national legislative program (prolegnas). So we hope the Film Law will be revised soon.

But here’s the thing. Why should we revise a particular law? We revise it when we find it ineffective and inapplicable. That’s the problem with the Film Law. We have had a Film Law since 2009, and only one or two implementing regulations are in place after almost a decade.

I was involved in the process of creating the implementing regulations, APROFI was often invited to join many of the meetings. We can see that the conflict of interest among various parties is really strong. I think consensus needs to be reached between legislators, government, exhibitors, distributors and producers in the discussion of the next film Law.

One of the issues with the current law is on film quota requirements, which mandate 60 percent of total screening time should be given to national films. What’s your stance on this?

I think this should be a target [instead of a quota] and the focus should be directed on how to achieve the target. If we want to keep this quota and later we have a lot of films that lack quality, do you think audiences will watch them? I don’t think so. This is again the reality in the field. 

We are ranked eighth [in the world] in terms of national film share, which is 35 percent from the total audience. That is actually good growth from the previous year [around 20 percent], without any quota imposed. I think foreign and national films need to grow together and complement each other. The overall ecosystem should be healthy so the film industry can flourish.

In addition, 60 percent is actually really tough. So far we don’t have films – in terms of quality - that can attract an audience to 60 percent of our overall screen time. Our record was 2008 when we had 58 percent market share. If we still push this, people will just prefer to not go to the cinema because low-quality films are there simply to meet the quota requirement. When that happens, cinemas will suffer losses and this will discourage investors from coming in. This is a disadvantage for all of us.

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