The film industry focuses on attracting further investment

Thailand’s film industry stands at a crossroads in 2017, as both the potential benefits and challenges brought on by increasingly globalised film industries have re-oriented the sector towards targeting revenue from foreign productions and joint ventures, as the number of domestically produced films wanes.

Golden Age

Often credited as the starting point of the Thai film industry, King Chulalongkorn’s recorded visit to Bern, Switzerland in 1897 and its subsequent exhibition in Bangkok spurred the birth of a budding film industry in the South-east Asian nation. A proliferation of domestic productions ensued, with the 1930s being widely considered the “Golden Age” of Thai cinema as the domestic industry responded strongly to an era when innovations in sound opened the market to dubbed foreign films. Sri Krung Talkie Film Company was among the foremost innovators of its time, producing the first local sound film Long Thang (1932) and the first local colour film Pu Som Fao Sap (1933) in quick succession, followed by several commercial successes.

Growth was largely sustained through the decades that followed, and the establishment of cinema as an important channel of artistic and conceptual communication spawned new genres of film. Owing largely the Thai government’s imposition of tax on imported films in 1977, domestic production figures boomed through the late 1970s and 1980s, with 150 local films being released in 1978 alone, despite varying levels of quality. The reopening of the market to foreign products in the mid-1980s, however, coupled with the Asian financial crisis of 1997, impacted the industry, and the annual rate of domestic film production collapsed. By year-end 2015 foreign competition, changing viewer tastes and the breakup of major local studio Grammy Tai Hub led to the market share of local productions dropping to just 18%, the lowest such recorded rate in two decades.

This is certainly not to say that the Thai film industry cannot achieve success through other streams. The Department of International Trade Promotion, organised under the auspices of the Ministry of Commerce, is playing an active role in promoting foreign film production in Thailand, as the nation looks to establish itself as a regional production and post-production centre. Strong tax incentives are on offer, including cash rebates to foreign film studios of 15% for every BT50m ($1.4m) spent on locally shot films, along with an additional 5% contingent on achieving benchmarks with regard to the hiring of locals during production and the promotion of tourism. The results have thus far been mixed, with 2015 recording 724 foreign productions filmed in Thailand – a 14.74% increase over the previous year – and revenue of BT3.16bn ($89m) – up 63.6% compared to the previous year – only for 2016 to reverse that trend, recording just 605 foreign productions and revenue of BT1.51bn ($42.5m), representing drops of 16.09% and 50.43% year-on-year respectively, according to statistics from the Department of Tourism’s Thailand Film Office. Stakeholders hope 2016 to be an aberration relative to the overall trend, attributing the drops to restrained consumer spending in the mass market due to slow recovery in economic growth and the national period of mourning which muted entertainment-related activity for the large part of the final three months of the year.

Local Allure

Perhaps more encouraging is the attraction the Thai market holds for foreign production companies seeking to develop local footprints. In March 2016 South Korea’s CJ Entertainment, the country’s largest entertainment company, and Thailand’s Major Cineplex finalised a deal establishing the joint venture entity CJ Major Entertainment, armed with an initial capital of BT100m ($2.8m) and the aim of co-producing 10 films over the following three-year period. Further similar investments could also be in the cards. Should the industry successfully harness the growing global appetite for co-productions while catering to changing local tastes, it could yet carve a profitable niche of commercially viable local and regional films.