- The Washington Times - Tuesday, September 6, 2011

JAKARTA, Indonesia

Western companies have flocked to Indonesia to sell everything from Louis Vuitton bags to Pizza Hut, but one big business has held out against the foreign invasion. Cinema screens are currently off-limits to most Hollywood blockbusters - thanks to a virtual monopoly on film imports by a single company.

And moviegoers in the nation of 240 million have just about had enough.

With a booming national economy, a growing middle class and a relatively young population - 36 percent are between the ages of 15 and 40 - Indonesia provides a near bottomless market for consumer industries.

Yet the film world has managed to escape many of the reforms that resulted in the dismantling of monopolies following the collapse in 1998 of the 32-year dictatorship of Suharto, who placed control of entire sectors in the hands of family and trusted friends.

As long as Group 21 maintains a firm grip on all film imports and most screens in theaters nationwide, cinema lovers will have little to cheer about, said Raam Punjabi, a prominent producer and outspoken critic of the movie industry.

Last year, there wasn’t a single American blockbuster you couldn’t find in Indonesia’s glizty shopping malls, numbering in the thousands. But Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film, Universal Pictures and others kicked off a boycott in February after the government said it would start enforcing a long-ignored import duty on all foreign flicks.

When that dispute was finally resolved in June, a few Hollywood hits starting trickling back to the predominantly Muslim nation. But a related legal skirmish between Group 21 and the government means the releases are sporadic and long behind other countries.

Why the movie industry has held out for so long against competition might be answered when the government wraps up its eight-month investigation into how Group 21, which gained control over the movie industry in the 1980s, has maintained its grip over the three largest importers with exclusive rights to distribute all Hollywood films. They also own 570 out of 676 of the screens in theaters nationwide.

It’s not a monopoly exactly, said Nawir Messi, chairman of the country’s fair competition commission, but with that kind of dominance there are reasons to be suspicious.

Even after June revisions to the tax law, Hollywood was largely shut out because their longtime distributors, hit with more than $30 million in unpaid levies and related penalties, were challenging the case in court.

It wasn’t until Omega Film - started by Ajay Fulwani, a nephew of Harris Lesmana, one of Group 21’s primary owners - got the go-ahead to start importing and distributing blockbuster films that “Harry Potter and the Deathly Hallows: Part 2” finally hit theaters in late July.

“Transformers 3,” “Kung Fu Panda 2” and “Fast Five” followed in August.

But competitors - and moviegoers like Adinda Rizka Margrethe - say the changes are minute.

“In Singapore, some movies like ‘Captain America’ have already come out, but here not yet,” said the 15-year-old schoolgirl as she showed up with three friends at a half-empty theater in downtown Jakarta. “I love watching Hollywood movies more than Indonesian movies, so I’m a bit frustrated.”

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