Indonesia’s film industry has a huge room for growth. The number of Indonesian films produced reached an all-time high of 132 films in 2018 with more making it to box office. Ticket sales of local films jumped from 35 million in 2017 to 52 million in 2018, and there have been more foreign investors coming in to invest in cinemas and film productions.
One company that has been attracting investors is the Visinema Group, particularly with its intellectual property (IP)-focused business model. Founded by one of Indonesia’s youngest and rising directors Angga Dwimas Sasongko, Visinema has transformed from a small production house into a full-ecosystem entertainment and technology company.
Angga started making films back in highschool. After he graduated, to add to his college fee at the University of Indonesia, Angga also worked in the film industry, from doing productions, scouting locations and so on. Finally, in 2008, he decided to build his own production house with a capital of Rp 1 million to rent a garage at his friend’s house in Jati Padang, Jakarta, which was the humble beginning of Visinema. Angga started it with one staff member named Aris Wiyono, who today still works at the company. His first film was titled Hari untuk Amanda with media company PT Media Nusantara Citra. Angga had to sell the script to MNC, who became the owner, distributor, and financier of the film. He saw that such a business model wasn't sustainable, since it has unsatisfactory margin and owns no distribution rights or intellectual property rights (IPR).
“After that, I feel that this kind of business model won’t be sustainable, because we’re only waiting for people’s orders. So for the next four years, I tried to produce the first film that was fully-produced, distributed, and Visinema did everything from A to Z. The title is Cahaya dari Timur: Beta Maluku,” Angga says.
It wasn’t easy, so Angga shifted the company’s business model, he had to cut all production-services projects. Visinema even reached a point where it had no cash flow other than payroll, he says. Angga recalls that he and the late Glenn Fredly, who played a crucial role in both the film and Visinema Group, had to do fundraising while shooting.
Hard work doesn’t betray. Cahaya dari Timur was released in 2014, and it became a huge success. Visinema took the spotlight by winning the Citra Award for Best Pictures at the 2014 Indonesian Film Festival. Following the achievement, former minister of trade Gita Wirjawan, who had been an angel investor for the film, converted his investment into equity and became a chairman in Visinema.
“Since then, we built Visinema into a company that doesn’t only produce a film, but also develops IP,” says Angga.
The IP development began with Filosofi Kopi, a movie released in 2015 promoting Indonesian coffee by a coffee shop and baristas. It became a box office, and the original coffee shop of the same name still runs until today with five outlets in four cities (Jakarta, Yogyakarta, Semarang, and Makassar). The story of Filosofi Kopi itself continues, having its 10-episode series in 2019, as well as its spin off Ben dan Jody which finished filming recently.
The IP development business model succeeded in attracting investors. In 2018, Djarum-backed GDP Venture led a $2 million seed round. With the capital injection, Visinema increased its film production—from previously two films a year to six quality films a year. Earlier in February, Visinema also bagged a $3.25 million series A led by Intudo Ventures, which is used to strengthen its animation division and expand its content in the Southeast Asia market—where it is dealing with making a Vietnamese version of Filosofi Kopi as well as the Cambodian version of Terlalu Tampan (2019).
The investment from Intudo Ventures has made Visinema a rare case of, if not the first, film company in Indonesia who obtained foreign investment. To Angga, it shows the credibility of the Indonesian film industry. Visinema also provided an investment slate to finance its film production. The majority of the fund will be Visinema’s capital, while the rest professional investors’.
“This is one of the mandates from our equity partners—to provide a sophisticated financing model for the entertainment industry because this precedent is still uncommon in Indonesia. Other developed countries have very sophisticated investment models for entertainment projects. We have many foreign investors, such as from Malaysia and the US, most of which are investment arm from media or entertainment groups, or investment firms with portfolios in the entertainment industry. So we want to show the precedent that entertainment business in Indonesia can be turned into a credible investment portfolio,” explains Angga. Some of the investors are US-based XRM media, Astro Malaysia, Jagartha Capital, and investment arm of ecommerce Blibli.com.
Indonesia’s film industry has welcomed foreign investors since it was removed from the negative investment list in 2016. The film, animation, and video subsector only contributed 0.16% to the total creative economy GDP of Rp 922.59 trillion in 2016, but its 10.09% growth was the second-highest among all subsectors. Moreover, the film industry embodies many creative expressions and other subsectors that can further support the economy. One of the challenges, however, remains at the issue of piracy. Angga believes that for Indonesia’s creative economy to thrive, there must be stricter law enforcement.
By August, Visinema had several business units that altogether built a 360 entertainment ecosystem: from the theatrical and non-theatrical content producer, music, talent development, film-based education platform, to writers room. It recently acquired Afterlab, a Bandung-based animation and VFX studio, to strengthen its animation division. Angga has done several expansion plans, such as launching its own over-the-top (OTT) platform BioskopOnline.com with a Transactional Video on Demand (TVOD) model or pay per view basis in September, an elearning platform VCampus.id in October and a joint-venture with a US-based content entertainment agency next year. Visinema is also entering the experience business, as it is already in discussions to build a play park and theme park. By 2021, it plans to lead 12 business units.
“We dream of being Indonesian Disney, more or less. We don’t just produce films, we have a full package of the entertainment business. We’re creating value from our creativity, making films, making contents, making IPs, and then becoming a full ecosystem of entertainment [...] Our vision is to be savvy in tech, and we want to be leading in content,” says Angga.
In terms of revenue, Angga claims that Visinema grew by 300% from 2017 to 2018 and nearly 400% from 2018 to 2019. The significant growth wasn’t only due to ticket sales, but also digital business such as its exclusive contract deals with OTT platforms like Netflix and GoPlay. With more units to come, Angga aims for its digital business to account for 55% of total revenue by 2023.
Having Visinema raised to this extent is far beyond Angga’s expectation. In terms of content, Angga says that Visinema is going in the direction that he really wanted—to take part in public discussion and collective memory through issues touched in Visinema’s films. For example, Cahaya dari Timur (2014) touches upon the conflict in Ambon, Maluku and Surat dari Praha (2016) the 1965 Tragedy, Filosofi Kopi (2015) represents Indonesia’s coffee industry, and Nanti Kita Cerita tentang Hari ini (2020), and Keluarga Cemara (2019) focuses on relatable family conflicts.
“We never take our movies for granted, making them only to create box office or only to achieve millions of audiences. It is one of our goals, but the ultimate goal is for Visinema’s films to settle in people’s hearts, be remembered as a memorable film, and affect people’s lives in many ways.”
Its recent box office were Keluarga Cemara (1.7 million audiences) and Nanti Kita Cerita tentang Hari Ini (2.2 million audiences). The success of NKCTHI has led to a sequel titled Story of Kale, which had its shoot done amid pandemic and aired on BioskopOnline.com starting October 23–garnering more than 200,000 audience in the span of 10 days. Angga says that the shooting process was done by implementing stricter health protocols than what had been advised by the government. Before and after the shooting period, they did a PCR swab test instead of a rapid test for a more accurate result and quarantined crews in the hotel to ensure everyone is free from any possibility of bringing virus home or to the location.
The pandemic has also pushed back Visinema’s timeline for its releases. Currently, Visinema has two films ready—Generasi 90an: Melankolia, and animation film Nussa. Angga refuses to release them on OTT streaming platforms and will wait for the theatres to resume.
“We made these contents for theatres. Theatres will need content when they finally reopen, and we want to provide them with it. [...] I don’t believe that business is all about me. Business is all about the ecosystem and partnership. We can’t possibly work by ourselves. So I always told my friends here—we hold, we wait until theatres reopen. They’ve always been there for us as our partners, so we want to be there for them too when they need us."