Local films are capturing an ever-increasing share of Indonesian eyeballs. Domestically-produced content captured 61% of the market last year, according to research from Spire Research and Consulting. And Indonesian films are breaking out overseas, becoming a regular sight at prominent international film festivals. 

MD Entertainment, backed by Chinese tech giant Tencent, is at the forefront of this rising industry. Founded in 2002, the studio is already a powerhouse locally. It produced three of Indonesia’s top 10 grossing films last year, the only studio to have more than one film in the rankings.

And Punjabi sees even more growth in Indonesia’s future. “I see ourselves as South Korea 15 years ago,” he says. “When you are behind, what happens is that you can only climb up,” he says.

Under-screened

Indonesia, Southeast Asia’s largest economy, is still an underdeveloped movie market. Cinemas in the country sold more than 53 million tickets last year, surpassing levels before the pandemic. But there’s still a lot of room to grow.

Watching a movie is still a luxury for many Indonesians. Tickets can cost around $3 to $6, about the cost of a meal for an average middle-class household.

There’s also a lack of cinemas. The Southeast Asian country only has one screen per 137,500 people. That compares to one screen per 30,000 in nearby Malaysia, or one screen per 16,000 in the content powerhouse of South Korea. 

“We are very under screened in Indonesia,” Punjabi said. 

But the film head sees that as an opportunity, rather than a constraint. Markets like Japan, South Korea and mainland China are “developed countries, they are on top,” he says. 

The appetite for local content is growing, as Indonesians look for films that reflect their lives, says Jeffrey Bahar, chief operating officer at Spire Research and Consulting, a regional market research firm. A film that sells a million tickets is known as a “gold class” film in the market; Indonesia has had 14 movies reach that rank this year, Bahar says. 

The country’s movie market ranked sixth in terms of total revenue, including exports, in Asia-Pacific, and will move to fourth place by 2026, according to a report released by the market research provider Euromonitor International in July last year.

How MD got its start

Punjabi is a child of the film industry. Both his father and uncle were part of Multivision Plus, a successful national film and production house. His family tried to dissuade Punjabi from following in their footsteps. But after short stints in pulp and paper, and even as a textile factory owner, he eventually returned to his passion: The movies.

He “started from ground zero” and joined the family business for seven years, after which Punjabi and his father split off to set up a new company: MD Entertainment. 

MD started with “Sinetrons,” the local version of soap operas. The constant stream of making television episodes, starting with “one episode a week, to [one] a day, to seven a day, to 50 hours a week, [to] 2000 hours a year,” helped give the firm the necessary experience to expand into areas like film and animation, Punjabi says. 

The firm was the first film company to list on the Bursa Indonesia, the country’s stock exchange, debuting in 2018. The company decided to pursue a public listing to be more transparent to attract investors, Punjabi says.

Tencent-endorsed

Today, MD Entertainment makes content for both streaming services and cinemas. And, unlike Hollywood, Punjabi doesn’t see the two delivery methods in competition. A horror film like KKN di Desa Penari may be better suited for the cinema, he says, while a romantic comedy works on a streaming platform.

Streaming platforms have been looking for Asian content that can travel overseas. Netflix, which has seen massive success with Korean film and TV with content like Squid Games, made its first Indonesian original movie, The Night Comes for Us, in 2018 and followed up by commissioning seven new made-in-Indonesia projects last year.

Punjabi is hopeful that more Indonesian content—including his own—will also go global. MD Entertainment released KKN di Desa Penari in Malaysia, Singapore and Brunei. The company has more global plans in the pipeline, Punjabi says, though did not provide details beyond suggesting that news would come next year. 

“I see an opportunity for us to go global in a very strategic, smart, way,” he explains.

And now, Punjabi has a powerful backer: Tencent, the Chinese tech giant and prolific investor. The company’s purchase of a 15% stake in MD Entertainment in 2021 was a game changer, Punjabi said. 

Tencent’s interest in MD came during the pandemic, when the film company turned to making series with streaming services like Disney+ and Tencent’s WeTV. My Lecturer My Husband, first released on WeTV in late 2020, went viral on social media, and still features prominently on Tencent’s platform. (The series involves a university student and an arranged marriage with the most hated lecturer on campus).

Punjabi sees Tencent’s backing as a powerful endorsement of his company. “I would say we got the stamp of Halal!” he says, referring to the religious certification that a product complies with Islamic law—and is often sought out by consumers in Muslim markets.

Update, Nov 8, 2023: This article has been updated to clarify the title of Jeffrey Bahar.