The ‘father’ of Indonesian cinema, Usmar Ismail, began filming the first local movie Darah dan Doa (Blood and Prayer) in March 1950. However, the very first film made in Indonesia was Loetoeng Kasaroeng, a silent film directed by Dutch filmmaker L. Heuveldorp in 1926. That said, European films had begun entering Indonesia as early as the late 19th century, meaning that the history of cinema exhibition in the country slightly predates that of domestic film production.
During the Dutch colonial era and the Japanese occupation beginning in 1942, many local films were produced, and numerous cinemas were established. In remote rural areas, the Japanese military operated mobile screenings by loading film projectors onto trucks—a tradition that continues today in a modernized form.
<Table 1> Status of Theaters in Indonesia (April 2024)
<Courtesy: CGV Cinemas>
According to [Table 1] provided by CGV Cinemas, as of April 2024, Indonesia has 427 cinemas and 2,228 screens nationwide. In contrast, during the 1980s and 1990s, the country boasted significantly more theaters. Djoni Syarifudin, chair of the Indonesian Cinema Owners Association (GPBSI), recalls around 2,900 theaters, while film expert Hikmat Dharmawan estimates there were up to 6,600 screens.
Given that theaters back then were mostly single-screen venues, Syarifudin’s figure seems more credible. In either case, the data points to a once-thriving exhibition industry with a larger footprint than today.
The sharp decline to just a few hundred theaters occurred when then-President Suharto’s cousin entered the exhibition business with the brand "Cineplex 21." The parent company of Cinema XXI—the top listing in Table 1—is the same entity as Cineplex 21.
With the emergence of Blitzmegaplex (now CGV) in 2006, the market gradually shifted toward today’s oligopolistic structure. Yet, prior to that, Cinema XXI maintained a monopoly on both theater operations and Hollywood film imports throughout Suharto’s rule and even for years after his resignation in 1998. Within a decade of Cineplex 21’s 1987 founding, thousands of theaters were forced to close, starkly illustrating how unchecked corporate greed under authoritarian protection devastated the industry.
Even 26 years after Suharto’s fall, Cinema XXI remains the dominant player. During its peak, government agencies had little incentive to support regional theaters. Unfortunately, this neglect continued even after the reformist administration came into power in 1998.
In 2014, President Joko Widodo’s government established the Creative Economy Agency (Bekraf) under the presidential office to develop 16 cultural sectors. Yet, the only major policy change regarding theaters came in 2016 when the government significantly expanded foreign investment in the film industry, paving the way for international players like CJ and Mexico’s Cinepolis.
To date, no comprehensive support policy for regional theaters has been implemented. Because theater operations require substantial capital and long-term investment returns, only large corporations or wealthy investors tend to enter the business. As such, small and medium-sized enterprises are virtually excluded from participation—and support programs rarely target the big players.
Consequently, access to cinema remains extremely limited in smaller cities and rural areas, where screen density per population is disproportionately low. Government aid remains elusive in these regions.
Some local film communities and municipalities have attempted to revive the traveling cinema tradition with mobile projectors and temporary screens, a format known as Layar Tancap (literally “planted screen”). These mobile screenings primarily showcase educational or promotional content rather than commercial films. Although this service was halted during the COVID-19 pandemic in 2020, efforts to resume it are now gradually underway.
A recent proposal in the National Assembly’s budget committee suggests installing at least one cinema per district, with some budget likely to be allocated next year. However, given that thousands of districts still lack any theaters, the feasibility and credibility of this plan remain in question. Meanwhile, some government bodies have proposed standardizing ticket prices and film taxes to increase local tax revenues and support regional film industries, including cinemas.
Regional Cinema Support Policy: Standardizing Film Taxes
The government plans to regulate film taxes by applying a uniform rate to all movie tickets nationwide. The idea is that lower ticket prices will attract more viewers in regional areas, thereby boosting local income.
Under Indonesia’s Basic Law No. 28 of 2009 concerning local taxes and government transfers, film tax is categorized as a local tax and may include up to 35% in entertainment tax. However, the actual rate is determined by regional regulations (Perda), leading to inconsistent tax rates across the country. This inconsistency has long been a subject of debate.
Because each local government sets its own rate, some areas impose taxes so high that building a cinema becomes unfeasible. If a reasonable compromise can be found, investors may be encouraged to open cinemas and turn a profit, while residents would enjoy nearby film access without traveling long distances.
The key lies in establishing a solid legal basis and implementing effective regulations on the ground. One step in that direction was the enactment of Basic Law No. 1 of 2022 on Fiscal Relations between Central and Regional Governments (HKPD). However, local authorities often deviate from national policy, making proper field enforcement critical.
When a cinema opens in a previously unserved area, the region naturally benefits from increased tax revenue. As film tax is a local tax, the respective municipal governments oversee it. But there is a risk of setting unfriendly rates for residents and investors alike. This has led central authorities to push for nationally uniform rates.
After the pandemic, local films claimed up to 64% of screen time. But if the tax issue remains unresolved, many fear a resurgence of Hollywood dominance, echoing the 2014–2015 period.
Increased tax revenues could also bolster national film support funds. As such, government authorities are considering finalizing the relevant regulations through a presidential decree.
A full version of this report, titled "Status of Small Theater Chains and Regional Cinemas in Indonesia" (KOFIC Correspondent Report 2024 Vol.35), is available on the Korean Film Council’s policy research bulletin.
Original Correspondent Report (Click)
