Lights, camera, action!: The film industry has been selected as a key area of development

While a lot of celluloid has passed through the camera since the first Malay-language film was shot in 1933, the local movie industry’s fortunes have recently been transformed. Backed by government plans to boost creative content and establish the country as a global filmmaking destination, the sector is expanding at a rate seen in few other places. Indeed, cinema audiences are growing, along with the number of screens, in contrast to international trends.

RISING NUMBERS: According to the National Film Development Corporation of Malaysia (FINAS), the number of cinema screens in the country rose from 265 in 2005 to 571 in 2010, while some 662 screens were operating as of 2012. This provided more than double the number of seats there were in 2005 – 126,174, as opposed to 61,482. Admissions also more than doubled, from 25.92m to 59.5m in 2011. These numbers were reflected in gross box office takings, which nearly tripled, from RM217.35m ($70.12m) to RM601.9m ($194.17m) between 2005 and 2011.

Good news for cinema owners, but also a clear sign of the growing strength of the Malaysian movie industry overall. Between 2009 and 2011, the number of locally made feature films rose from 27 to 49, with 1Q12 already seeing 20 domestic movies produced. Gross takings from local movies were also up, from RM50.84m ($16.4m) in 2009 to RM124.85m ($40.28m) in 2011.

“On the exhibition and production side, we are seeing terrific growth these days,” N. Balaraman, director of planning and research at FINAS, told OBG.

One key driver is the government’s Economic Transformation Programme. This national development scheme has made communications, content and infrastructure some of its National Key Economic Areas (NKEAs). These sectors are seen as worthy of significant state and private sector support because they add value to the country’s output. The film industry has been specifically highlighted and a number of important incentive schemes for the movie production industry are either planned or now coming into force.

In April 2012 the prime minister approved a measure – starting from the beginning of 2013 – that will see foreign and local film production companies offered incentives to produce their movies in Malaysia.

INCENTIVES: The guidelines for this were being prepared in 3Q12, with the current thinking at FINAS, which comes under the Ministry of Information, Communication and Culture, being that foreign filmmakers coming to use the country as a location would receive a 30% cash rebate on all in-country spending – providing there is a minimum spend of RM5m ($1.6m). For local companies, the incentive is likely to be the same, although the spending limit will be lower, at RM2.5m ($800,000).

The rebate will likely be available for feature films, documentaries, animations and – crucially – TV, in an effort to attract big-budget regional commercials.

Malaysia has much to offer production houses as well.

The general cost level is lower than in rival Singapore while the infrastructure, particularly in terms of transport and IT, is also superior. The widespread knowledge of English is an added plus, as is the general safety of the country, which provides lower insurance costs.

NEW TALENT: In addition, there is a growing local talent pool for movie-makers to tap into. The NKEA stresses the importance of developing local creative talent, with this government-backing producing concrete results. One key example is Khazanah Nasional, the government investment holding arm, which is funding the RM400m ($129m) Pinewood Iskandar studios, due to open in 2013. The centre will boast five film stages and a complex of post-production studios and facilities. The studios should have a major impact on regional filmmaking. Meanwhile, Malaysia has begun negotiations on its first co-production agreement, which is with Screen Australia. “Malaysia is more supportive than other countries of regional integration of the film industry, and this subsequently widens the net of funding and pool of expertise,” said Mohd Naguib Razak, director-general of FINAS.