The Malaysian government is pulling out all the stops. In the past few years, the Ministry of Information, Communications and Culture, has launched several major initiatives aimed at growing the country’s creative sector.

Goodies Galore
A grant which the Ministry announced in 2012 is the Creative Industry Development Fund, which has a budget of US$33 million (RM100 million) for the next three years and will be regulated by the Malaysian Communication and Multimedia Commission (MCMC). The fund aims to facilitate and encourage Malaysians’ involvement in the creation, production and distribution of multimedia content for domestic and international markets.

Pinewood Iskandar Malaysia Studios (PIMS), a strategic agreement with the Government of Malaysia’s investment holding arm Khazanah Nasional Berhad, is expected to complete in May this year. The Malaysian Insider reported that Pinewood Iskandar CEO Michael Lake would require 1,500 talents by the end of this year to support the first phase of PIMS development. In order to make this happen, Iskandar Region Development Authority (IRDA) chief executive Datuk Ismail Ibrahim announced the commencement of Iskandar Malaysia Creative Industry Talent Development programme.

“The first seven ‘Train the Trainers’ course under the development programmes will start in March 2013 and are designed as intensive eight to 12 week courses to provide skills and knowledge needed by Malaysian film industry professionals, trainers and workers to seamlessly integrate with large scale international film production companies,” said Datuk Ismail.

On the industry collaboration front, Malaysia and Singapore have also expressed their intentions to combine efforts and resources to penetrate the global entertainment and media industry. For the first time at MIPCOM 2012, Malaysia’s FINAS and Singapore’s Media Development Authority (MDA) joined forces to co-host and co-organise a Malaysia-Singapore Cocktail Reception.

“I am proud to say that this campaign to boost cooperation between the two countries’ creative industries is timely as we share common interests, cultures, traditions, languages and race. We commend Singapore’s positive efforts and welcome mutually-beneficial collaboration in Iskandar Malaysia,” said His Excellency Dato’ Sri Kamaruddin Siaraf, Secretary General of the Malaysian Ministry of Information, Communications and Culture, during the event.

On promoting animation, Kuala Lumpur played host to the inaugural Asian Animation Summit (AAS) in December 2012. Malaysia’s Multimedia Development Corporation (MDeC), in collaboration with Korea Creative Content Agency (KOCCA) and Australia’s ABC TV, co-organised the two-day pitch market that was attended by international programme buyers, including FremantleMedia Enterprises’ Kids & Family division, eOne Family, Corus Entertainment, Korea’s EBS and Disney Channels Korea.

Encik Kamil Othman, Vice President and Director of the Creative Multimedia Division, MDeC, said the event is taking place at a time when Malaysia is on the verge of becoming a regional creative content powerhouse. According to MDeC, there are currently 257 Multimedia Super Corridor (MSC) Malaysia status companies in the Creative Multimedia Cluster. In 2011, the cluster recorded revenue of RM6.1 billion, out of which exports accounted to RM3.65 billion while the remaining RM2.45 billion accounted for revenue generated from the domestic market.

These moves seem to already be paying off for the industry. On the first day of MIPCOM 2012, H.E. Dato’ Sri Kamaruddin Siaraf, Secretary General of the Malaysian Ministry of Information, Communications and Culture announced 12 deals worth US$30 million during the Creative Malaysia Networking Reception. One notable deal is Hasbro Studios’ multi-million dollar production deal with Malaysia’s Vision Animation and Australia’s Moody Street Kids for the animated TV series Transformers – Rescue Bots Season 2 (26 x 30’), with work distributed between Malaysia, Australia, Canada and the United States.

Asian Side of the Doc, originally announced as a companion event to the KLCCIM which has been postponed, is going ahead as planned. The event, organised by Singapore-based Bang Singapore, is on target to take place in Kuala Lumpur from March 19 – 22, 2013.

Bumps on the Road
The “Film in Malaysia Incentive”, widely announced at various content markets in 2012, saw the Malaysian government potentially dishing out a 30% rebate to companies producing or post-producing in Malaysia beginning January 1, 2013. By March 2013, it is unclear whether any media company has benefitted from the scheme, with some producers citing the high minimum production budget set by FINAS being an obstacle to applying for the rebate. The minimum amount set is RM5 million for foreign movies and RM2.5 million for local ones.

According to Malaysia’s The Sun Daily’s news report on Feb 11, FINAS representatives were asked about the status of the rebate at the European Film Market (EFM) this February. The Sun Daily quoted Finas Marketing and Promotion director Abd Khalid Maulod saying that “although they (FINAS) could not give a concrete date in response to the filmmakers queries as to when the rebate would be implemented, it was definitely in the near future”. The report further added that FINAS tells filmmakers to start shooting their movies and apply for a provisional certificate in the meantime.

FINAS also announced Malaysia’s first international content market – the Kuala Lumpur Communications & Creative Industry Mart (KLCCIM) plus an associated film festival, the International Film Festival Malaysia (IFFM), both originally set to take place November 2012, in Kuala Lumpur, but subsequently rescheduled them to March 26 – 29, 2013. By February 2013, it became clear to the industry that both events were to be delayed until further notice. Delays were largely attributed to the organisational mergers of FINAS and the Malaysian Film Department (Filem Negara Malaysia) that was announced last November. Controversy also brewed with the departure of FINAS director-general Mohd Naguib Razak who has since been succeeded by Raja Rozaimie Dalnish Shah, who is now Acting DG. FINAS never formerly announced Razak’s departure, but he was visibly absent at the Asia Television Forum in December when FINAS reported the March 2013 dates for the new KLCCIM.

Industry Regulation
The Government has also ramped up its efforts to curb piracy. In October last year, Malaysian police arrested 12 individuals involved in what is considered to be the first illegal IPTV syndicate in the country. Local reports stated that the syndicate, which has been operating for a year with more than 2,000 customers already, was selling foreign television content applications illegally and had profits running into the millions.

Astro Monopoly?
One of the biggest highlights for Astro Malaysia, the first free satellite TV broadcaster in Malaysia and notable monopoly player in the pay-TV industry, was the company’s listing on the Malaysian stock exchange, Bursa Malaysia, under the “Trading/Services” sector. This was reported to be Malaysia’s third largest listing in 2012, after Felda Global Ventures Holdings Bhd (RM9.93 billion raised in June) and IHH Healthcare Bhd (RM6.3 billion raised in July). The IPO though, was generally considered a disappointment.

According to Malaysia’s The Star, analysts reported that while market interest was strong, the company’s share price performance was considered slow on the first day of the offering. Three weeks after its listing, Astro shares dropped to its lowest closing point. The company closed at RM2.65 and was down 11.7% from its initial public offering (IPO) price of RM3.The dwindling shares of Astro began to spark several controversies. It was unclear which parties have been selling down shares of Astro as there had been no news of major shareholders selling off their stakes and no filings were made with Bursa Malaysia by any substantial shareholders. The Star claims that this led market analysts to suspect that Astro employees themselves who cannot meet margin calls could be the ones who have been selling their pre-IPO owned shares.

Fortunately for Astro, their financial analysts reported strong financial results for the first 9 months of the financial year ending 31 January 2013. They managed to earn a double digit revenue growth of 11% from RM2.8 billion to RM3.1 billion. Meanwhile Astro shares have since shown signs of an uptrend. The growth in revenue was possibly due to other services offered by the broadcaster. Astro provides HD, 3D, PVR, VOD and IPTV services through Astro B.yond and Astro On-The-Go (AOTG). To enhance these services and further prove their commitment to their customers, Astro signed a partnership with Maxis to develop and co-market consumer packages for high speed broadband together with Maxis’ Fibre Internet, Mobile Internet, Wireless Internet and ADSL services. With this partnership, signed last year, Maxis has been appointed the value-added fibre broadband service provider to significantly expand Astro’s B.yond IPTV service footprint. In turn, Astro will be the IPTV service provider for all Maxis fixed and wireless platforms.

Astro continues to reinforce its monopoly when it won rights for the Barclays Premier League (BPL) bid last year. Unlike recent years, Astro had to win the bid with new cable player Asian Broadcasting Network (ABN) and Telekom Malaysia entering the picture. Astro was reported to have spent up to RM800 million for seasons ending 2012/2013, up from RM500 million in the year ending 2009/2010.

A new pay-TV player, ABN, was launched in July 2012 by Nilamas Corporation with the aim of reaching three million subscribers or 40% of the market share within five years from its commencement. Pay-TV distributor Multi Channels Asia (MCA) concluded a major channel carriage agreement with ABN last year to aid its start up. The eight-channel carriage agreement includes Bloomberg Television, KidsCo, NDTV 24/7, NDTV Good Times, NDTV India and Outdoor Channel.

“We are not competing with existing pay TV operators. Our goal is to really reach the un-served market,” said Sreedhar Subramaniam, CEO, Nilamas Corporation.

Free-to-air incumbent, Media Prima, which currently owns TV3, 8TV, ntv7 and TV9, also showed positive growth last year. TV3 remains as one of the top free-to-air TV station with an audience viewing share of 26% on both free-to-air and pay- TV. Media Prima recorded a 5% growth in net revenue for the third quarter of 2012 to RM437.21 million compared to RM417.47 million recorded for the same period last year.

Despite increased competition, Astro still reigns due to its extensive territorial reach and ownership of a large pool of exclusive content. However, since the entrance of ABN, Astro and other players have had to step up their game. Customers hope that with the new competition, Astro will revise their subscription pricing. Outside the industry, with the new government funds, latest developments and increased competition, Malaysia is definitely carving a path to stand out as a significant media player in the Asian region.