Group wants to limit foreign commercials

Interview Malaysian Association of Advertising Filmmakers (PPFIM) president Khoo Kay Lye.

Huge inflow has impacted businesses of local production houses

FRESH from concluding an agreement with the Association of Accredited Advertising Agents of Malaysia (4As) on the balance of payments for commercials, the Malaysian Association of Advertising Filmmakers (PPFIM) is now looking at its next challenge – to limit the huge inflow of foreign commercials flocking into the country.

Association president Khoo Kay Lye tells StarBizWeek that foreign commercials are fast flowing into Malaysia and this has to an extent impacted the businesses of local production houses, which at the moment are already in a dire situation due to stiff competition in the industry.

“Not only are foreign commercials flocking into the country but also foreign talents which are used in these commercials. As of last year, there were 2,089 imported commercials making their way into the country.

“It is estimated that the average cost of a foreign TV commercial in Malaysia is between RM250,000 and RM350,000. So, in essence, if we were to import an average of 2,000 films, we will have lost RM700mil to foreign production houses,” he says during an interview with StarBizWeek.

He adds that although there has been no updates by National Film Development Corp Malaysia (Finas) on the “Made in Malaysia” (MIM) commercials for the whole of last year, there were 1,025 local commercials with total production cost of RM73mil as of June 2015.

“If this scenario continues, Malaysia stands to lose in terms of the outflow of foreign exchange,’’ Khoo says.

An industry observer feels the foreign imports of commercials could also be due to the existing Communications and Multimedia Act 1998, which gives the Malaysian Communications and Multimedia Commission (MCMC) the authority to issue broadcast licence without mandating the MIM ruling. The practice before the Act was that the issuance of such licence was only done by the Information Ministry.

Khoo adds that PPFIM is looking to have a dialogue with Finas on how to curtail the import of foreign commercials and enhance the use of local talents.

He says the association plans to improve the situation by having campaigns to educate local advertisers on the use of local talents to produce equally effective and quality commercials, noting that the cost is also low.

The association is also looking to compete with foreign producers by providing more training to its members. Towards this end, in collaboration with 4As and Finas, PPFIM will invite a renowned creative director from India to provide talks and insights into creativity, he says, adding that more similar moves could be in the offing.

The latest landmark initiative to safeguard the interest of advertising production companies, creative agencies and advertisers came into play on March 1 this year after a long drawn difference between PPFIM and 4As was settled pertaining to the balance of 50% payment for commercials. Previously, the association wanted a standard contract as oppose to 4As which favoured a willing buyer-willing seller type of contract.

After some high-powered discussions, which was moderated by Finas, PPFIM finally agreed with 4As for a written agreement embodying the willing buyer-willing seller clause for the balance of the 50% payment. This meant that the balance of payment is to be negotiated between an advertiser and their creative agencies for the amount to be paid to production houses.

However, 4As fully supports and agrees as standard that the first 50% of the total project be paid to film production companies will be not more than seven days prior to the commencement of film shoots to be executed within Malaysia.

In practice, creative agencies will collect payments from their advertising clients and pay on their behalf to the production house who shoots the commercials.

Commenting on this move, Khoo says there are a some members who are not happy with the contract regarding the balance of payment, but he is confident that this will be resolved overtime.

Khoo, who recently won his third term as president of PPFIM, says the other initiative which had helped the industry garner stronger support and lifted it to a higher level was the requirement that production houses should be members of PPFIM before they can shoot a TV commercial in the country.

With the implementation of this initiative last year as well other measures to take care of the welfare of its members, he notes that it had helped raised the association’s membership base to 119 from 29.

Established in 1990, the association’s primary objective is to create the best possible business environment for its members. PPFIM is a member of Gabungan Persatuan Karyawan Filem Malaysia (GAFIM) along with the Film Directors Association Malaysia (FDAM), Crew Association (PROFIMA), Post-Production Houses (POSTAM), and Actors Association (SENIMAN).

It also serves on the Council of the Communications and Multimedia Content Forum of Malaysia (CMCF).

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