Defining and Calculating Success in the Indonesian Film Industry

The Indonesian film industry has experienced significant growth in recent years. In 2022, local movies succeeded in capturing 61% market share, defeating foreign films' total audiences for the first time ever in the country's history.

This number is a big achievement for the local film industry, especially after the closure of cinemas and the delay in the film production process during the pandemic. 

It’s also a prideful moment for local production houses, since in 2019, national films only controlled 35% of the domestic film market. Even then, this figure is considered relatively good. After all, in the majority of countries in Asia (except for China, India, Japan, and South Korea), market share for the local film is still below 30 percent.

Does this show a good potential for the upcoming film industry in Indonesia? 

It certainly does, and yet there are many things we don’t know that can make or break the success of a movie.

On this occasion, Ms. L, a movie enthusiast and content acquisition expert, shared with us the ins-and-outs of the local film industry, how production houses navigate through Over The Top (OTT) platform’s growing dominance, and why certain films can achieve the success they have.

What is the usual audience acquisition for movies?

The first three days following a screening are the most crucial for a film, particularly for cinema releases. If many people are watching on the first day, the hype may attract more viewers on the following day.

In-demand or popular films usually can attract at least 1 million viewers. Meanwhile, what we consider record-breaking is when a film gets around 3.5-7 million ticket buyers.

The KKN di Desa Penari film was able to get nearly 10 million viewers with many contributing factors. First, the film itself has been postponed twice, so many viewers are even more curious about it. In addition, the story itself is already very popular on social media.

Also, when the film was shown, it coincided with the long Eid holiday and there were no foreign films as competitors during the screening period.

How much budget is needed for streaming platforms to acquire one movie? 

Prices in the film industry have no benchmark. Producers can set prices however they want. Moreover, there is a fundamental difference between films that are released in theaters and original series that will be shown for the first time on streaming platforms.

For films that have been released in theaters, the factor that might arguably determine their price is their box office figures. Cinemas will usually provide data on daily viewers for each film, which they announce on their website or social media accounts.

Can already-purchased movies be shown on different platforms?

Some platforms ask for full exclusivity, where films they have purchased cannot be shown on other platforms or even regions. Some only ask for a window of exclusivity, in which the buyer can broadcast the movies they bought for the first 6 months exclusively and only other platforms buy the movie after that 6-month time mark.

There are also those who buy non-exclusively, so production houses can sell their films to several platforms at the same time.

What factors can make a film successful in the market?

Cast is a big factor in a film’s success. If the lead actor already owns a large fan base, chances are the film will be successful.

In Indonesia, a large fan base can guarantee at least 300 thousand viewers when the film is first released. Some popular Indonesian actors and actresses may reach 500 thousand viewers.

Another factor that may have an influence is the director, though it also depends on the production house. In the Indonesian film industry, the film crew does not remain loyal to one production house. Therefore, films with different production houses may have the same director and film crew.

Indeed, there are several production houses that have “favorite” directors, but generally production houses are more concerned with casting than directing. Therefore, the role of the director for the success of a film may only be around 30-35%.

What benchmarks must a film pass to achieve a return on investment?

To achieve ROI, we need to look at the film production costs first. The average production of films in Indonesia can spend IDR 1-3 billion (for drama) or IDR 5-10 billion (for horror).

Some of the more ambitious local films such as Merdeka Trilogy (Merah Putih [2009], Darah Garuda [2010], and Hati Merdeka [2011]) can reach a total of IDR 64 billion. Films like Bumi Manusia (2019) can also cost IDR 50 billion to produce.

However, for films with an average production cost of IDR 5-10 billion, the production house can already get a return on investment with a benchmark of 1 million viewers.

So, the biggest profit from the film industry itself comes from cinemas. If the production house sells broadcast licenses to OTT platforms at a later date, the profits from there are basically considered just as a bonus.

OTT platforms generally cannot estimate the profit they can obtain after buying a broadcast license for a film. They depend on the box office number or the production house’s status. There are indeed a number of production houses with a proven expertise in assessing market tastes, so OTT platforms tend to buy from them.

Navigating through the film industry is difficult and can be unpredictable. In addition to the high financing challenges in production, the industry also faces other challenges, such as technological developments, the presence of illegal distributions, changes in consumer behavior, and the domination of foreign films.

However, things can probably look a lot brighter in the future. Currently, it is not too difficult for Indonesian films to reach the standard target audience of four million viewers per film. If things keep up, it's possible we'll see higher local film production numbers that enter Indonesia's box office soon.

Contact us to explore more about the current trends in the entertainment industry and be connected with our expert network in Indonesia.

Subscribe to our newsletter, and stay updated with the latest insights on various industries. 

About Ms. L:

Ms. L is a Head of Content Acquisition & Relation at Top Broadcast Media Production and Distribution Company in Indonesia.

Ms. L is the Head of Content Acquisition & Relations at an established broadcast media production and distribution company in Indonesia. As a Head of Content Acquisition & Relations, she is in charge of compiling a list of all active local film producers and distributors to maintain a relationship with them. Additionally, she monitors every new movie that comes out and analyzes the ones that could be big hits based on consumer tastes and market trends and formulates a plan to acquire them.