Opening Indonesia's Film Industry to Foreign Investment
One of the business sectors in Indonesia that has recently been opened up to foreign investment is the movie theater industry. The opening of the movie industry for foreign investors can be regarded a milestone in Indonesia's film industry and also forms a lucrative business opportunity for these investors. There are currently only 1,117 movie screens in Indonesia to serve a potential audience of more than 255 million people, hence being one of the world's least penetrated cinema markets.
Sheila Timothy, Chairwoman of the Association of Indonesian Film Producers (APROFI) as well as movie producer, previously said foreign funds could give a much-needed boost to Indonesia's movie industry which is currently short of both movie screens and revenue. Foreigners are likely interested to tap this market because Indonesia is characterized by a rapidly rising middle class segment while the nation forms a largely untapped cinema market.
Overall, Indonesia is one of the least penetrated cinema markets with a screen per capita ratio of 0.2. However, the Greater Jakarta area is already saturated to a high degree. Around two-thirds of the 1,117 cinema screens are located in this area. As such, other cities on Java (Indonesia's most populous island) or the major cities on other islands are a more attractive investment opportunity.
The opening up of Indonesia's film industry to foreign investment is part of a major liberalization of the Indonesian economy. By attracting foreign investment into Southeast Asia's largest economy as well as boosting the nation's manufacturing industry, the government aims to boost economic growth and reduce the country's traditional reliance on raw commodity exports. Other business sectors that were subject to easing restrictions on foreign investment include tourism businesses, transportation companies, cold storage industry, waste management, restaurant business, and raw pharmaceutical materials industry.
Regarding the movie industry of Indonesia, foreign investors can now fully own local cinemas, film production houses as well as distribution firms.
The largest movie theater operator in Indonesia is privately-held Cinema 21, controlling about three-quarters of the market. This group, which held a monopoly in this industry during the days of president Suharto, also controls the rights to import and distribute movies from the six major Hollywood studios represented by the Motion Picture Association of America. Meanwhile, cinema operator Cinemaxx - part of the Lippo Group - targets to triple its number of movie screens to 250 in 2016. Over the next ten years, Cinemaxx aims to create an ambitious network of theaters with 2,000 screens spread across 85 Indonesian cities. The country's third-largest cinema operator CGV Blitz, which went public in 2014 and was acquired by South Korea-based CJ CGV Co Ltd, plans to quadruple its number of movie screens to 600 by 2020.
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Great News - A new Impulse for the Indonesian Society!
The film industry my be opened but banking is not. Indonesia will require that banks be 40% maximum owned by foreigners. You should also remember that what is true today may not be true next year. Laws change very quickly in Indonesia.