Cinemas Live the Horror as Film Boycott Slashes Profits

Posted: May 12, 2011 in News

By : Elisabeth Oktofani  | May 12 2011

While film lovers have been missing catching Hollywood blockbusters on the big screen, cinemas have been missing something more substantial: profit.

Djonny Sjafruddin, the head of the Indonesian Cinema Companies Union (GPBSI), said the foreign film distribution boycott in the country had caused a 60 percent drop in the local industry’s income nationwide.

“Since the Motion Picture Association stopped exporting their films to Indonesia, we, the cinema industry, have begun feeling the effect, especially in small towns such as in Central Java,” Djonny said.

The boycott that began on Feb. 17 was sparked by disagreement over a new royalty tax computation the government wanted to impose but that the MPA said would have a “significant detrimental impact on the cost of bringing a film into Indonesia.”

The government had promised a resolution by the end of March, but talks apparently still haven’t concluded as major releases like “Thor” and “Pirates of the Caribbean: On Stranger Tides” aren’t being shown here.

Syamsul Lussa, the director of films at the Culture and Tourism Ministry, could not be reached for comment on when Indonesia could expect a resolution to the issue as he was attending the prestigious Cannes Film Festival.

To cope with the diminished source of movies to screen, Djonny said cinemas had been making do with second-class foreign films and previously run movies as daily screenings are cut.

“The tax-scheme controversy is slowly killing the Indonesian cinema industry, while the government wants to add more screens across the nation,” he said. “But if there is no film, what will be screened in the new screens? Indonesian films have not really been able to attract the market.”

“Maybe 15 to 20 percent of Indonesian films can attract audiences, such as ‘Tanda Tanya’ by Hanung,” he said. “But other than that, does the audience really want to watch films with the same ghost concept all the time? I guess not, because the audiences are not stupid.”

Dian Sunardi, the head of marketing at BlitzMegaplex cinemas, testified to the decreased audience-drawing power of the films they had been showing.

“We still receive some film stock from major studios, including from Hollywood through other distributors,” Dian said. “However, the number of visitors has dropped 15 percent to 20 percent compared with last year.”

Even the Jakarta administration is feeling the impact.

“So far, cinemas have contributed 20 percent of the Rp 81 billion ($9.5 million) in entertainment tax collected for the first quarter of the year,” said Iwan Setiawandi, the head of Jakarta Tax Office. “But in previous years, cinemas have contributed as much as 40 percent to 50 percent of the Rp 350 billion entertainment tax collected annually in Jakarta.”

Industry representatives and moviegoers like Herda Aprillia, a member of the Indo Harry Potter online fan community, can only hope the matter is resolved soon. “Harry Potter and The Deathly Hallows Part 2” — the last installment in the hugely popular series — is due to be released in July.

“I am actually staunchly against pirated films. But what else can you do? I am not going to wait until the DVD is [officially] released or fly to Singapore only to watch the film,” Herda said.

The original article can be found here :

  1. Hi Marvel,

    Thanks for raising this issue.

    I wonder have you heard of the true story behind this fiasco? Cinema 21 is corrupting on taxes since 1995 because of cronyism with Sudwikatmono, Soeharto’s family.

    Not government’s fault at all. Cinema 21’s greediness of tax corruption is the cause of the absence of Hollywood blockbuster.

    Now they just have to pay the taxes they have corrupted all these times. As consumer, we should stop going to Cinema 21, let them go bankrupt, and replaced with honest movie industry player.


    • Thanks for sharing your thought Kandenza, the “true story” is still as vague as it’s always been. How do you know whether Cinema 21 has been corrupting taxes since 1995 issue is true or not? If you have concrete evidence about it (Tax Report, actual, valid tax audit results, etc), please do share. It will be a valuable thing to unravel this whole mess. The problem is, even IF they did do KKN, our government itself is not, and probably will never be free from it.

      Did you know that 21 Cineplex is the one the biggest tax contributor of Indonesia? Iwan Setiawandi, the head of Jakarta Tax Office. He said it himself that “…cinemas have contributed 20 percent of the Rp 81 billion ($9.5 million) in entertainment tax collected for the first quarter of the year”. There are still taxes paid by them. If you read the news and the statement of Jero Wacik, the Dirjen Pajak, etc, they said it’s about the UU no 17/2006 and also the 33/PJ/2009 regulation. If it was still based on the UU no 10 / 1995 one, they would be free from their tax “debts”.

      With all due respect, the national movie industry will be hit with a crippling blow if 21 Cineplex is bankrupt. It would take years, 5 or even 10 for anyone to rebuild the industry. Blitzmegaplex alone wouldn’t be able to keep up, movies will only be screened in select towns, and only in small amount of venues too. Do you honestly think the movie industry can be saved that way? The government wouldn’t be able to collect the tax from movie making, the movie makers wouldn’t be a able to get their profit from the local movies. And most people would lose interest in cinemas, they’ll just go to pirated dvds. That’s why, to end the dispute about this debt, royalty and audit, it would be the best to invite professional, foreign tax auditors, business and tax experts to review and conclude it once and for all.

  2. Hey chill, I just tipped CNN that the “Syamsul” guy is in Cannes film festival

    • Sorry, I don’t mean to startle anyone, I’m cool. I just want to emphasize that this is whole mess can not be resolved as easy as that. Thanks for tipping them, hope they cover the news about him

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