Film projection Vertical Integration in Indonesia

Film projection Vertical Integration in Indonesia

Cinemaxx is the name of a new cinema chain ownership of Lippo Group, which is engaged in the type of business exhibition and distribution of films. In the coverage of Variety in Cannes 2014 dated May 23, 2014, explained that, “Lippo sees Cinemaxx as part of a vertically integrated media empire spanning newspapers, TV (First Media, Big TV), cable and recently Internet service provision.” Does this indicate integration media industry verticals Lippo Group’s ownership will be expanded to the type of business the film?


Is Vertical Integration movie?

Dated May 3, 1948 records an important history in the American film industry, namely the collapse of the Hollywood Studio System. The system allows an entity, called the studio, to a single role as owners and businesses from upstream to downstream movie or vertical-integration of production, distribution and exhibition. This case refers to bebeberapa studio, but specifically Paramount Pictures, as the only Hollywood film studios at the time, which controls a third of the movie business.

The case came to light because of the formal complaint from the Supreme Court against Paramount Pictures. Causes of this case is the purchase and delivery injustice movie studio owned, particularly related to films that are not produced by the studio. Termination rope vertical integration is known as the Paramount Decree. As a result, Paramount Pictures decided to handle the business of production and distribution, while the business exhibition held by United Paramount Pictures, with the diversification requirements affiliates cinema.

The impact of this decision is the emergence of a producer, studio and independent cinema. The next form of cooperation is the financial support of major studios, through the purchase of distribution rights of films of independent production studio. While the exhibition business limited affiliates in the form of restrictions on the number of broadcast slots, and the geographical area theaters. It means that vertical integration is very conducive to the monopoly of the film industry as a result of large-scale capital investment.


Japan and Thailand

Eiren or Motion Picture Producers Association of Japan (MPPAJ) is a Japanese film producer association, which is composed of the four largest film companies, namely: Toho, Toei, Sochiku and Kadokawa. Why a film producer Association consists of four companies alone? The answer is because the four companies that perform complete vertical integration include the production, distribution and exhibition.

The entire film producers other than members MPPAJ referred to as an independent film producer. They also impose rules are not allowed the independent movie producer to enter films directly to theaters, bypassing the distributor, who also MPPAJ. There are only a handful of independent distributors are allowed. They are distributors who have a history of personal relationships, for example, former employees MPPAJ.

The impact of vertical integration in Japan, causing a lot of trouble selling his independent film. As an illustration: in 2008, some 806 films in theaters with the composition of the film 418 local and 388 foreign movies. 17 local films were produced and distributed by MPPAJ controls 84% ​​of the gross box office figures local movie (97.29 Billion JPY). While 344 other local films or independent films are distributed by MPPAJ, sharing the remaining 16%.

UniJapan, as an organization under the Ministry of Economy, Trade and Industry (METI) recognizes the difficulties the commercialization of independent films with this system. Other independent films that are not distributed by MPPAJ will appear in Mini Theaters (Art-house Cinema) scattered throughout Japan.

In Thailand kepemilkan cinema network system divided by region, namely: Bangkok, Chiang Mai, North Zone, North East (Korat), East (Chonburi), and South (Surat Thani) .Pembagian raises different cinema network in each region. A producer or distributor of the film origin Bangkok, when selling the film to other areas outside of Bangkok, will perform sell-breaking system. The amount of about 8-10% of the box office in Bangkok.

In Bangkok, the largest cinema chain owned by Major Cineplex, SF Cinema and (will appear) Kantana Movie Mall (KMM). SF Cinema concentrate fully on the activities of the distribution and exhibition of imported films, while locally produced films minor nature. Instead Major Cineplex, as the largest Cineplex network, has a concentration in local films, including the production and distribution of films.

Back to the matter of vertical integration, both Major Cineplex, SF Cinema, and KMM, all doing vertical integration as a whole. Balancing ecosystem film industry of Thailand is (1) The specialization of distribution and exhibition of local films and imports, (2) Ownership cinema by region, and (3) The fact that the majority of box office movies produced by the studio GTH (GMM, Thai, Hub Ho Hin) which is not affiliated with the exhibition business. For example Pee Mak, the biggest box office film history Thailand (18.1 Million THB). (Source: The Hollywood Reporter)

Independent film outside the studio will perform screenings on the Lido, Scala and House-RCA (Art-house Cinema) located in Bangkok.

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