A new Government regulation requiring agencies to use local talent - prohibiting foreigners from working as technical advisors, models, directors, art directors, camera- men, editors, animators or music directors in local production houses - has caused widespread panic. Production houses have suspended operations and some ad agencies (which claim that 70 per cent of their spots require foreign talent) have been forced to halt work on ad campaigns.
“If (the Ministry) was interested in our opinion, it would have asked us before issuing the decree, not after,” one agency source tells Media. If his comment sounds defeatist, it’s easy to see why - particularly given the intricacies of the political agenda at work.
Whether or not the regulation is simply a knee-jerk reaction by an anxious Government anticipating a globalisation process that will inevitably open up the ad industry or, (less likely) as some speculate, the outcome of a sweet deal struck by a struggling production industry, is uncertain.
What’s interesting, however, is the timing of the ruling. It comes as the equally draconian Made In Malaysia (MIM) restrictions are tightened in Indonesia’s Southeast Asia neighbour. Like the Indonesian rules, MIM (first introduced in the 1980s) aims to keep commercial production within the country. But while MIM seems restrictive at first glace, as always in Malaysian business, there is room to move. It’s likely that some sections of the code will be interpreted in different ways, and advertisers sitting down with agencies and those responsible for advertising standards can continue to expect flexibility and a reasonable hearing.
And let’s not forget that unlike Indonesia, which can easily lay claim to perhaps the lowest creative standards in the region, Malaysia is a major creative hub. Its local talent is of international standards, with the market bringing home metal from major global award shows. Indonesia, on the other hand, continues to rely heavily on Thailand, Australia and, ironically, Malaysia to fill its talent gap.
Indeed, Indonesia has much to lose. For one thing, the market is bigger at US$3.7 billion compared to Malaysia’s $1.2 billion; for another, it’s faster growing (15 per cent compared to Malaysia’s three), thanks largely to investment from foreign companies.
But would, as the Government argues, the local broadcast industry benefit from such protective measures? Admittedly, the new regulations are likely to give local directors, who in the past would merely have played a supporting role to foreign talent, a leading part. It should also, in the long run, drive investment in the local creative industry.
But perhaps most pressing is the question of whether Indonesia’s production and post-production houses have the resources to cope with the tsunami of work headed their way. Indonesia churns out 3,000 spots annually (compare that to Malaysia’s 300). The strain on the industry in terms of production value, talent and creative output clearly won’t go unnoticed. And with some of the market’s top directors already snapped up for upcoming campaigns, an inevitable queue at the production end will only lead to the postponement of commercial material delivery. Television currently accounts for 70 per cent of spend, but significant delays could indeed drive dollars to other media and impact brands and broadcast institutions.
For companies in Indonesia, using foreign production houses is an economic imperative.
Media Institution, Indonesian Association of Advertising Agencies (PPPI) has, surprisingly, expressed support of the regulation. It must now at the very least lobby for a fair hearing and propose a resolution to the tension between pressure for an outright ban and the need to protect advertiser and agency interests.
