Since I was a mere lad going to the Saturday morning flicks at the ABC Roxy in Blackheath, I've loved watching films. For a time, before Jakarta became totally gridlocked and Our Kid came along, 'Er Indoors and I would go regularly to our local bioskop and luxuriate in large armchairs in air-conditioned splendour to watch whatever took our fancy.
Not that there has ever been much of a choice. There aren't any 'art houses' here such as I used to frequent in London, so trying to decipher the levels of, say, Luis Bunuel's Belle de Jour or exiting a cinema with a stunned silent audience after watching the 1981 version of Mephisto have been virtually non-existent treats. .
The few Indonesian movies I've watched have, without exception, been of little artistic merit, nor for me have they had any entertainment value, except for those who deem the lowest common denominator as acceptable..
Back in 1996, my father, then 75, sister and niece visited us here and we took them on the regular two week tour through Yogya, onto Bali and then back here. The train journey to Yogya offers magnificent views, but I wish I could say the same for the overnight bus trip to Bali.
What was on offer on the onboard TV was a VCD of a ghost-kungfu-satanic-softporn horror of a movie. My father was the only one of us who seemed to take an interest in it, but none of us dared to ask him the next day what he'd thought of it.
Although I have yet to watch any of the current crop of Indonesian movies, just a few of which – such as Laskar Pelangi – have demonstrated an eye for social issues, I am doubtful that the industry has yet to raise its standards.
A major talking point this week concerns a perceived plan by the government to increase the tax on imported movies.
Indonesia's largest theater chain, 21 Cineplex announced earlier that the government’s plan for a new tax on royalties for foreign films distributed in Indonesia would force the Motion Picture Association (MPA)-affiliated distributors to stop sending Hollywood movies here.
MPA Asia Pacific president and managing director Mike Ellis, however, has recently denied the boycott threat.
As has the government, stating that what it is undertaking is a reassessment of the customs value of imported films.
This, of course, has nought to do with revitalising or, as some have suggested, killing the Indonesian film industry. A closer examination of the players, specifically 21 Cineplex (a.k.a..Group 21), raises some interesting conjectures.
21 Cineplex is part of the Subendra Group established by a cousin of then dictator Suharto, Sudwikatmono, who died earlier this year aged 76. His family ties enabled him to get very rich and be a member of the jet set. (His daughter, Martina, is a prominent socialite in Beverley Hills – the California one.)
The advantages of being part of what is known as the Cendana Clan (named after Jalan Cendana, the street in Jakarta where Suharto had his main Jakarta residence) are well-known. They owned the government and bureaucracy, and through the laws they promulgated and regulated, and the institutions they established, became the oligarchs of Indonesia. (Watch this slide show presentation for evidence that vestiges of Suharto's rule remain.)
21 Cineplex has twice been referred to Indonesia's Business Competition Supervisory Committee (KPPU). This was established in 1999, post-Suharto, through Law No. 8/1999 on Consumers' Protection.
In 2002, Monopoly Watch, an NGO, reported 21 Cineplex to the KPPU not only because the company was seen as being the prime importer and distributor of Hollywood movies but that they were first screened on the c.500 cinemas of the Cinema 21 network spread throughout Indonesia.
Through two companies, PT. Camila Internusa Film (PT. CIF) and PT. Satrya Perkasa Esthetika Film (PT. SPEF), a business arrangement for the import and distribution of films was made with Motion Picture Association (MPA ), an association of filmmakers including Columbia Pictures, 21st Century Fox, Buena Vista International, Metro Goldwin Meyer, etc.
These companies were obliged to pay royalties to the MPA.
Another company, PT. Nusantara Sejahtera Raya (PT. NSR), also under the umbrella of the Subendra Group, owned the Cineplex 21 chain and showed the films imported from the MPA, and from other sources.
The major problem focussed on by Monopoly Watch was that in controlling the number of film prints and showing the films on their screens first, 21 Cineplex denied other cinemas the opportunity to benefit from the topicality of the films (i.e. release dates) and through the scale of their operations, which allowed PT. NSR to offer comfortable viewing experiences, conquered the market. Many other cinema operators went bankrupt.
In 2003, the KPPU found that although PT. CIF and PT. SPEF controlled the distribution of MPA imported films, their control was less than 50% of the entire imported films in 2001 & 2002, "such that it is not a monopoly as stipulated in Article 17 Number 5 1999".
Also, the total number of films imported by PT. CIF and PT. SPEF [did] not exceed 50% of the entire imported films, such that it is not a monopsony (i.e. only one buyer for a particular product) as stipulated in Article 18 of Law No. 5 of 1999.
The KPPU did find various infringements of Law No. 8/1999 to effect some changes, but not enough for film lovers or other cinema owners to notice, except, perhaps, in Surabaya.
PT. NSR is proven to own the majority shares in several companies in the field of cinemas, they are PT. Intra Mandiri and PT. Wedu Mitra in the same relevant markets, that is in Surabaya. Cinemas owned by the two companies control more than 50% of the market segment, such that it does not fulfill the stipulations of Article 25 of Law No. 5 of 1999.
The KPPU therefore ordered PT. NSR to reduce its share ownership in PT. Intra Mandiri and or in PT Wedu Mitra by selling or transferring its share ownership to other parties or to take other actions such that [PT. NSR] no longer breaches article 27 within 48 (forty eight) days as of the date this ruling is read (1st April 2003).
The KPPU also sanctioned PT. NSR to pay a fine of Rp 1,000,000,000 (one billion rupiah) if the Accused [did] not carry out dictum
The KPPU also advised the Makassar Mayor to nullify Decree Number 54/2002 or to take other actions, such that there is no film distribution arrangement.
More recently, a new upmarket cinema group, Blitzmegaplex, submitted a claim to the KPPU alleging that Cinema 21 had monopoly control of domestic film distribution.
With all the nonsensical palaver in the print media in the past couple of weeks about cinema goers being deprived of western movies supplied by the MPA, not much of the issue of tax avoidance (or evasion?) by the film importers and distributors has surfaced.
According to government regulations, imported films are subject to a 10 percent import duty, a 10 percent value added tax and 2.5 percent income tax. The total combined tax burden might top 43 US cents per meter of film imported into Indonesia.
In addition, film importers and/or distributors are also required to pay a 22.5 percent income tax on the royalties they pay to movie producers.
The income tax is of course of no concern to the MPA as long as their royalties are paid. Government officials say local distributors of foreign films may owe Rp 30 billion (US$3.4 million) in unpaid taxes on royalties over the last two years.
In his first comments on the royalties, Finance Minister Agus Martowardojo said on Thursday that the Rp 30 billion in unpaid taxes was “scary” and involved 1,759 film prints.
What is scary is that, as the director general of the customs and excise officer, Thomas Sugijata said, the amount owed might top Rp 300 billion if fines, which range between range between 100 percent and 1,000 percent, were included.
If you divide US$3.4 million by the number of prints, 1759, that's c.US$ 2,000. Over a two year period, that's surely not an onerous financial burden, especially for a socialite or two.
Not that I particularly care one way or another. I pay a monthly subscription to Indovision for six movie channels.
And I have several DVDs given away gratis by British newspapers as well as a stockpile of pirated and downloaded movies yet to be viewed,
Don't we all? So why all the fuss?
Oh yes. It was started by 21 Cineplex…
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