December 18, 2023
MANILA – In a film industry marked by the rise of over-the-top (OTT) platforms, Indonesian cinema has leaped into the global spotlight.
Gadis Kretek, one of the most talked about Indonesian series in 2023, highlights the growth of Indonesia’s film industry.
As its producer, Netflix allocated an estimated US$250,000 to US$400,000 for each of the five episodes of this drama about Indonesia’s cigarette industry in the 1960s.
While Netflix’s landmark investment has made global headlines, it is not the only production of note this year. Thriller series Katarsis and Tilik the Series are equally loved by the local audience and have some wondering whether Indonesian drama, or I-drama, is the next big thing after K-drama.
The founders of local production house BASE Entertainment, Aoura Lovenson and Shanty Harmayn, enthused that Indonesia had the potential to surpass South Korean market due to the large population of close to 300 million individuals, who have a strong preference for local content.
“Our main focus is on Indonesia-centric theatrical content, and we are pleased to still have a strong interest in Indonesian-language content. Considering the population size, our market has a significant advantage over South Korea’s, indicating a promising potential for growth,” Aoura said.
“External exposure is a characteristic of South Korea as attracting [audiences] outside South Korea is not only possible, but essential. Indonesian cinema, akin to that of China and India, is nevertheless influenced by the domestic market; thus, comparisons to these nations are feasible.”
Emerging stronger from crisis
Indonesian movie theaters have seen a swift recovery from the COVID-19 pandemic. Cinema XXI reported revenue growth of 22 percent year on year to Rp 2.4 trillion (US$155 million) in the first half of 2023, ahead of the cinema chain operator’s initial public offering (IPO) in August.
Angga Dwimas Sasongko, the founder of Visinema, one of the biggest film production houses in the country, is no less bullish.
“More than 60 percent of the film industry is currently dominated by Indonesian productions. I have witnessed a greater variety of stories, not just in terms of quantity. This highlights the potential for hyperlocal films to flourish alongside the expanding Indonesian cinema industry,” he told the Post on Dec. 8.
The proliferation of OTT platforms since 2020 means fans now have easier access to a variety of content, and Indonesian creators can go global.
“The audience’s reach is now worldwide. Before the rise of OTT services, most Indonesian films that aimed to reach an international audience had to make their way via film festivals,” Angga said.
“Because of this, several global players were keen on meeting with us when we arrived in [the South Korean city of] Busan [in October for the international film festival]. One of them was even acquainted with our previous work,” he added.
Government has role to play
Nevertheless, he suggested the government could do more to support the filmmaking ecosystem in Indonesia: “I am hopeful that government policy will extend to the commercial sector as well as the arthouse film sector. Policy examples include tax incentives and financial support for the film industry. There are tax incentives for films in the United States and several European countries, whereas special investment funds are established by the governments of Korea and Singapore.”
In December 2022, South Korea’s Ministry of Culture, Sports and Tourism disclosed a midterm and long-term strategy to expand content market sales from 22.8 trillion won ($17.6 billion) in 2021 to approximately 30 trillion won by 2027, according to Yonhap News.
South Korea’s film industry has created many successful productions showcasing its renowned scriptwriting, set design and acting talent, making it a household name in the global business – and the one to beat.
“Our focus should be on expanding our market. Our goal is to double it by next year, and triple it by the following year. It is important to establish the remuneration system collaboratively,” Shanty said.
The growth of OTT in Indonesia is supported by various factors, such as the robust development of intellectual property (IP). Indonesia’s strong following for traditional media is expected to be complemented by the increasing appeal of OTT platforms, which is likely to bring more investment to the country, according to Aoura.
“Overall, the situation is pretty favorable considering the significant budget that [the platforms] brought to Indonesia. Additionally, the content on OTT platforms will experience a significant and immediate increase, in addition to the overall investment,” Aoura said, adding that OTT viewers and cinemagoers were both increasing in number.
Shanty highlighted the fact that OTT platforms offered filmmakers in Indonesia a new creative landscape in addition to the established cinema industry.
“Having [OTT] platform partners that put trust in us and are eager to invest capital into developing this [Indonesian film industry] is essential for this reason,” Shanty said.
Sutanto Hartono, CEO of Vidio, told The Jakarta Post on Dec. 11 that Media Partner Asia reported a significant milestone for the local film industry: In the third quarter, Indonesia accounted for 21.2 million OTT subscribers, almost half of Southeast Asia’s total 48 million subscribers.
However, that number still represents less than 10 percent of the population, highlighting potential for further growth and innovation.
“Korean content is highly sought-after by the global community due to its presence of subtitles, excellent production quality and the promotional support it receives from the government,” Sutanto said.
Optimizing human resources
Aoura emphasized the importance of having the right skills and human resources for the Indonesian film industry to thrive in both OTT platforms and cinemas.
“In Indonesia, the majority of the crew still work as freelancers, which can actually be quite beneficial, especially for those in creative positions. But [whether that’s appealing enough] for certain positions that offer a career path, that is also a valid question,” Aoura said.
From 1998 to 2017, the Indonesian Film Agency reported a significant increase in the number of Indonesian film workers to 23,000. However, there is also a high turnover rate, with many workers opting not to pursue a long-term career in film production.
“Without a doubt, the film industry is currently facing some challenges, but that’s exactly what we can tackle by working together through associations or organizations,” Aoura explained.
He noted enthusiastically that Indonesian cinema had made a remarkable comeback in 2022, after the pandemic had left movie theaters empty, and that 2023 would go down as one of the most successful years for the domestic industry.
The movie maker predicts that production houses will henceforth feel more comfortable investing larger sums in creators, be it directors or scriptwriters.
“It’s important to remember that success in the film industry doesn’t happen overnight. Building the audience and consistently delivering quality content is key. By doing so, producers can gain the confidence to invest larger budgets. It’s hard to determine which came first, the chicken or the egg,” he said.