So, in a sense, it is odd that these countries are creating laws to cut the number of foreigners who appear on their airwaves and in their newspapers.
Their politicians — and some ad folk — want fewer ads to be made abroad. And they want more ads to be acted, edited or animated by home-grown talent which, they claim, struggles to find work.
“Why should an actor, producer or sound designer, who’ve worked hard at school and university, enter the job market only to find there are no jobs — or, at best, poorly-paid ones — because our agencies have used production companies overseas?” asks Vincent Lee, who is the president of the Malaysian 4As.
“To get work, they have to go abroad — which leaves us with a talent drain.”
1 Lee is working with the Malaysian Ministry of Information on ways to resurrect ‘Made in Malaysia’ (MIM), a controversial set of rules devised in the 1980s. MIM set out to protect the country’s production industry, as well as the Malaysian public from the seedier side of Western culture. But the ruling has been widely ignored by agencies and has, Lee admits, “died a natural death”. Meanwhile, in neighbouring Indonesia, Communications and Information Minister Sofyan Djalil has decreed that non-nationals will no longer be clogging the corridors in local production companies. He also said that foreign-made ads are not to be aired on Indonesian TV stations.
2 Political wranglings permitting, the new dos and don’ts should be ironed out in both countries by July. As it stands in Malaysia, 80 per cent of an advertiser’s production costs — with the exception of tourism campaigns — must be spent locally. This figure will almost certainly rise. Incentives and tax exemptions will be awarded to advertising agencies that are using local production houses.
3 In Indonesia, a foreigner will only be allowed to work at a local production house if he or she has three Indonesians acting as assistants, “to ensure the transfer of knowledge to locals”, insists Djalil. However, there are some general loopholes in the rules. Global brand icons, such as Marlboro’s Caucasian cowboy, will be permitted, as they are inseparable from the brand’s identity, Djalil reasons.
4 The number of foreign-made ads has exploded in both countries over the past decade, as more multinational companies have moved in. Malaysian production companies produced 400 commercials a year a decade ago. The industry now produces 100. In Indonesia, 3,000 commercials are produced each year — 10 per cent for global brands. But global brands account for up to 70 per cent of Indonesia’s Rp 30 trillion (US$3.4 billion) ad market.
5 Globalisation has not been kind to production companies in Malaysia. Tai Hon, Screenpost, Renaissance Film, Joe Hasham and Pegasus Works are a just few to have closed in Malaysia — some because they couldn’t pay staff. Only a handful of the best survive by taking on jobs from abroad — including Jakarta. “We have seen the value of the commercials production industry shrink from RM300 million (US$88 million) to RM29 million in one year,” says Lee. In Indonesia, productions houses survive on local scripts, but the work is rarely in danger of troubling international awards juries.
6 The changes will be most dramatically felt in Indonesia. Its advertising market is much bigger (US$3.7 billion compared to $1.2 billion). It is faster-growing (15 per cent in 2006, compared to three per cent), ironically, with a lot of help from foreign investors. And a bigger portion of its advertising market goes on TV (70 per cent compared to 30 per cent in Malaysia), which usually demands more production time and manpower than other media.
7 How the rules will be enforced is yet to be decided. Fines administered by censorship bodies are the likely punishment. However, Malaysia has ignored the MIM rules for 30 years with impunity. In Indonesia, at least 10 of the country’s top production companies have temporarily closed for business from foreign clients.
What it means for ... Advertisers
Local brands will now have to use local production companies, which could be bad news for brands with international ambitions. The best directors and photographers will now be harder to book. What’s left may not have the required skills to craft ads which travel well.
International advertisers wanting to run pan-Asian or global campaigns in Indonesia and Malaysia now face higher production costs as their spots must be re-shot locally. “For foreign companies to spend a very small proportion of their huge marketing budgets here is a small price to pay towards the development of a small country like Malaysia,” says Vincent Lee.
What it means for... Agencies
Agencies in both countries will, in theory, get richer and bigger. There will be more work to go around. But recreation of certain foreign scenes, such as the New York skyline, will prove tricky and expensive. “If a scene calls for a foreign location, why can’t we have the flexibility to shoot abroad, rather than try to recreate it from scratch here?” asks Malaysian director Al Isaac from Superwonderful Films.
Local agencies will have better opportunities to strike relationships with international advertisers wanting to reach Malaysian or Indonesian audiences.
Malaysian agencies will generally be happier than Indonesian agencies. Creative standards are higher in Malaysia, its agencies are less dependent on foreign talent, and there is less benefit to be had from foreign influence. Even so, says Isaac, “if we are to stand tall against the rest of the world, access to foreign talent and resources, as and when we need it, is crucial.”
In Indonesia, there are worries that the country’s creative product — one of the weakest in Asia — will get worse still.