Changes in vid winds

Ever since a government crackdown on piracy in 1991 cleared the shelves of most of Indonesia’s videocassette outlets, the video business in Indonesia has been virtually dormant. That situation could change shortly, however.

Plenty of laserdiscs continued to be imported for sale or rent, but the vidcassette trade effectively went up in smoke during the ceremonial burning of seized stock in Jakarta in ’91, and the U.S. majors exited the market. But with some U.S. companies preparing to return, and a potential market of an estimated 4.6 million videocassette recorders and 450,000 laserdisc players in the country, some vid distribs are forecasting an imminent boom.

Warner Home Video led the majors’ charge in April when it signed a two-year licensing deal with Indonesian distrib Vision Home Entertainment. That was followed by Columbia TriStar Home Video, which inked a deal with Kenchana Pratama Bhakti, the distrib division of Mitraguna Likorindo. The first Col TriStar homevid package of 10 cassette titles, all subtitled, plus three LDs, a mix of new and old, is being released July 26.

“We see incredible potential in Indonesia,” says Col TriStar Home Video Eastern Hemisphere VP and regional director Janet Robertson.

Robertson forecasts distrib revenues for Western product will jump in the first year from $26 million to $37 million. That comprises $10.25 million for videocassettes – up from $2.75 million – and $27 million for LDs – up from $23.25 million.

Robertson wants videos priced so they are accessible as both rental and sell-through items to the majority of VCR owners. Thus, the distrib is selling vidcassettes to retailers at a “market entry price” of a minimum of $10 each. That will cover costs, plus a small royalty to CTHV and a small distrib free, says Wayne Mathews, a consultant to Mitraguna Likorindo.

Robertson says the aim will be to time product release closely with U.S. release to forestall parallel imports, while providing for a reasonable window after theatrical release in Indonesia.

Warner’s initial offering, “The Specialist,” did not do “as well as we would have liked,” admits Tan Poh Lam, WHV regional director for Southeast Asia, who blames parallel imports. Undeterred, WHV is planning to release next month a mammoth 200 titles from its library via Vision. Mathews is watching the WHV revenue-sharing deal with interest, but says the point-of-sale terminals required may be too sophisticated for typical shops.

He adds that consumers will have to be encouraged to buy new VCRs, since the absence of product meant there has been no reason to buy one in Indonesia for at least five years.

Better organized

Eko Soepardjo, chairman of Asirevi, the Indonesian Video Importers Assn., is bullish on the market. With product flowing in from at least two majors and stores getting better organized, “we’ll see a boom in the near future,” he says.

Soepardjo estimates there are 300 videostores in Jakarta, but fewer than 1,000 in the entire country. Before the return of the majors, importers like Soepardjo tried to make a living by buying small amounts of product from U.S. indies. There’s still the problem of laserdiscs, which are sold for about $50 a copy and rented for as little as $2. The government permitted the importing of LDs in 1993, but there is a thriving trade in copies of films that are still in theaters or have not been released theatrically.

In April the government initiated moves to eliminate illegally imported LDs and records in Jakarta. Semyon Sinulingga, head of the City Film Control Agency, said all LDs and vidcassettes that did not display stickers from the Film Censorship Board would be seized and destroyed. In a subsequent police raid, 1,755 LDs were confiscated.

The government also said LDs must be imported through Jakarta only – ignoring the fact that it’s relatively easy to enter Indonesia through other ports.

Soepardjo says, “We’re asking the Motion Picture Assn. to help us fight parallel importing. We’ve found out that in Singapore for example, 5,000 copies (of some titles) are being sold when the number would normally be 1,000.”

Despite the progress, some vid distribs who got burned in the 1980s remain cautious. Gope Samtani bought and released 500 titles – U.S. and Mandarin – in three years, incurred big losses and quit the field.

“I maintain a wait-and-see attitude,” he says. “I don’t have the courage yet” to take another chance at video distribution.

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