Movies, and then Some

Visiting a movie theater is no longer just about the interesting images on the screen. Today there is a lot more to keep customers satisfied. Harumi Supit reports.

The subterranean depths of Grand Indonesia’s Blitz Megaplex has the look and feel of a mini-mall: a Hewlett-Packard center where one can surf the Internet and print, a computer gaming area frequented largely by teenagers and children but which occasionally plays host to serious gaming competitions, a smoking section plastered with LA Lights stickers and lounge areas where one can sit and watch the world go by.

Above, 11 auditoriums of various sizes, the largest seating up to 600, screening foreign and domestic films.

Blitz ushered Indonesia into the era of the modern multiplex with the opening of its first complex in Bandung last year, a nine-screen venue which received an enthusiastic reception from local moviegoers.

David Hilman credits co-founder Ananda Siregar with the idea.

“We both like going to the movies and what frustrated us was when we have to stand in line for hours or even send over the driver to get tickets,” says Dave wryly.

Neither had a background in the entertainment business but both had prior business experience in the local market. David previously founded and sold a call center software company, and Ananda spent time at the Indonesian Bank Restructuring Agency. The duo spent two years researching and learning about the movie industry before they were convinced they had a workable model good enough to sell investors on.

Initially they planned to focus on the exhibition business of showing movies but quickly learned that they would need to move into the distribution side of buying movies in order to compete with local movie giant 21 Cineplex. Although major Hollywood films operate on a revenue-share basis, independent movies — which can include high-grossing titles like The Aviator — usually opt to sell country rights outright instead of dealing with the hassle of box office reconciliation.

The result is that whoever acquires those rights can rightfully lock out rivals from screening the films.

Visually, the large, airy megaplexes would look at home in any major cosmopolitan city. At the Grand Indonesia mall, the Blitz premises blend in seamlessly with the affluence projected by the host of brand names.

“Our slogan is ‘beyond movie,’” says David.

His goal is to offer a total pleasant movie experience. To this end, he is focused on making ticket and concession stand purchasing as convenient as possible, including pushing Internet sales to reduce wait times, and increasing the number of ticket lines.

According to David, the Grand Indonesia Blitz complex draws an average of 11,000 moviegoers daily on weekends and 4,000 on weekdays. In addition, the entertainment center derives revenue from food and beverage sales, venue rentals for private events and merchandising. He expects to recoup the investment needed per complex ahead of the seven-year-return investment return period that he says is typical of the movie industry.

Blitz’s eventual target is to open three complexes a year. This year’s venues are Grand Indonesia and Pacific Place in Jakarta. Residents of Kelapa Gading and Bumi Serpong in the Jabotabek area can expect a Blitz megaplex to come to them in 2008. There are also plans for Blitz megaplexes in other major cities.

Behind the glitzy veneer, the advent of a new player spells quiet promise for Indonesian movies, which normally have just a handful of days to prove their onscreen profitability before being discarded. It’s a vicious cycle: Indonesian films typically don’t get much screen time to prove themselves and recoup their investment costs, with the result that investors are reluctant to put much time or money into production — resulting in poor quality films that do little to raise the standard of Indonesian film and attract a larger paying audience.  

“The [current] economics are not conducive for Indonesian producers to make movies,” says David, who adds that he is willing to give local films a longer run.

That is indeed a worthwhile objective.

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