A QUICK HISTORY OF RTM AND PRIVATE PRODUCTION COMPANIES

The following is a report I wrote for the heck of it. I have given it to many parties including one that say will forward it to the new Information Minister Datuk Seri Utama Dr Rais Yatim. I hope so.
For those who are willing to spare some time, below is the report in full. It's quite long. Please comment.

OBSERVATIONS OF THE LOCAL TV PRODUCTION INDUSTRY


THE INTRODUCTION OF DRAMA SWASTA

Ever since the introduction of drama swasta in the early 80s (by the then Information Minister Y.B.Dato Seri Rais Yatim), RTM has been a constant beacon for the survival of the local film and TV production industry.

In fact, the concept of ‘drama swasta’ also led to TV3 launching their version of privatized commission a few years later under the label ‘Cerekarama’.

Nevertheless, the main idea behind the advent of these ‘commissioned’ productions were two fold: “To assist and support the livelihood of the professionals within the local film industry due to the dying cinema industry at that point of time”.

“To create a domestic creative industry that can support the TV stations with fresh and popular products for the TV viewers”.

The film practitioners of the local film industry welcomed the move as funding for cinematic releases were not forthcoming and making movies were considered too risky. So, in the early 70s, RTM came forward to assist them by commission original productions produced directly for TV.

My parents’ company RJ Film was one of the pioneering companies to have participated in this ‘drama swasta’ system. My mother made various series in 16 mm film for RTM and I made my first ever television production also through this system under my parents’ company = “Karam Di Mata Karam Di Hati” which starred the late Mahmud June and Marlia Musa.

During those early days, there were no funding available from banks or other financial institutions – so mom beg and borrowed to ensure her career as a producer grew back then.

THE TECHNOLOGY BEHIND TV PRODUCTION

At the beginning of the launch of ‘drama swasta’ video technology has not yet reached the local film industry and therefore, dramas were still produced on celluloid (albeit with 16mm film). Only by the late 80s were producers introduced to the video format – from the old two inch C formats to the much cheaper three-quarter inch U-matic video format introduced by Sony.

Since then, technology ruled the production – within 20 years – producers had to change between many formats – from U-matic to HiBand U-matic to Beta SP to the current Digi-Beta. Every three to five years, the technological standards are changed much to the chagrin of the producers who invested in equipment. Not only recording systems changed but also cameras. During the early days of TV production we used tube cameras and I was lucky to have used Ikegamis that I thought gave the best colors on video then. Unfortunately, whilst tube cameras were better than cameras with chips at that time, they have an inherent disadvantage. For night shots, when the camera is panned or tracked, any light point or points becomes streaks of lights.

Today, the whole world is studying the introduction of HD or HDV formats – which would bring down equipment costs drastically. Malaysia has not been able to avoid this drastic change. HDV and HD equipment are readily available and used for local dramas and documentaries. Even prosumer-level cameras are considered acceptable by many producers. Recently I have even heard of a local producer shooting a telemovie on Red – which is one of the leading brands of HD camera systems.

The post-production industry that began life as film/celluloid post also had to realize the changes from analog post-production technology to the current non-linear post-production technology. In the early days of 16mm and Super 16mm, editing was done the film way, on old Steinbecks rented by the hour from Finas or some studios like Pancha Delima or Filem Negara.

Today, in the digital world, post-production houses are poppin up everywhere since editing systems have become so-affordable. Anyone with a high end PC or Mac CPU and software like Final Cut Pro or Macromedia Premiere Director can cut a movie or television series.

THE CONTENT

When drama swasta began, there were no specific dramatic formats offered. The producers were told to propose and if found acceptable, it would be commissioned. These include the telefilm format (90 minute format) and the serial format (between 4 to 13 one hour episodes).

Content was usually typical social melodramas. Only in the late 80s would local producers attempt more ‘unusual’ or more creative content. This was due to the technological advances that allowed producers and directors to work with video technology that replaced film technology and made local dramas more affordable.

From social dramas, RTM now commissioned situational comedies, documentaries, variety shows and even local form series.

Amongst the more popular outsourced TV productions of the late 80s include Pi Mai Pi Mai Tang Tu, Gerak Khas and Gado-Gado on RTM.

THE PRODUCTION COMPANIES

The local film/TV companies in the early days were operated by Bumiputra managed and controlled companies, but however when RTM required more content, and with the video technology being introduced, the non-Malays began to control the ‘support’ industry – this means Bumiputra controlled company’s had to rent equipment and edit their programmes in non-Bumiputra premises.

In time, these companies began to finance Bumiputra companies who received commissions from RTM. By the beginning of the 90s, the industry was basically financed by non-Bumis though it seemed Bumiputras controlled the industry.

In the late 80s HVD, a Bumiputra production company controlled by non-Bumiputras, was the biggest producer of original RTM content but when the then incumbent Minister Dato’ Mohamed Rahmat retired, HVD went into limbo. Its owners migrated and instead started various businesses in China. HVD’s era as the foremost RTM content producer ended. Today it is mostly a company that does dubbing for foreign imported TV series.

About a decade ago, due to the sudden rise in numbers of production companies, RTM decided that all these companies must apply for production hours from RTM through consortiums. So small companies band together to form these consortiums. I was involved in setting up of one of these consortiums but left when I disagreed with the Board structure. Amongst these consortiums include Keris Motion Sdn Bhd and Telemal Sdn Bhd.

THE CONCEPT AND PROBLEM OF COMMISSIONING ‘HOURS’

RTM has been handing out hours since the early 90s. HVD had been the biggest benefactor of such hand-outs from RTM.

What are these ‘hours’?

Currently, each hour that RTM buys average RM40,000. Therefore, if RTM awards a company 100 hours, this means the company stands to earn a revenue of RM4 million. For those who cannot fathom the amount of production content 100-hours gives you, it is equivalent to nearly two hours of programming per week for the whole year.

There were unsubstantiated rumours that, at its height, HVD had been awarded 3000 hours (this means a revenue of RM120 million) per year. This allowed HVD to build an empire in terms of production facilities including a mini-city backlot in Cheras (which has since been destroyed).

HVD also ‘assisted’ Bumiputra producers by starting a so-called ‘umbrella’ industry. It offered young directors and producers sub-contracted projects. But in reality, it was pure ‘slavery’ as HVD wanted to squeeze and maximize profits. For example, a telefilem which RTM pays HVD RM80,000 then, they will in turn offer it to struggling Bumiputra producers at RM50,000 but with the proviso that these producers rent their technical equipment. This means that the desperate Malay producers only received about RM35,000 for production (artistes fees, directors and script fees and production daily costs) as the balance RM15,000 would go back to HVD field and post production rental.

When the era of HVD ended, RTM began offering more local producers ‘hours’ depending on various reasons.

However, by the early 90s, more than 400 production companies had registered with FINAS in hope to produce programmes for RTM.

Everybody who knew anybody in RTM seemed to be getting hours. So much so that true professionals were forgotten and push aside, so that these new ‘generation’ of producers can come up.

WHERE THE PROBLEMS BEGIN

As businessmen, these producers were looking at quick profits – trying to make 50% profits on all hours received. This means the quality of productions for RTM remains ‘backward’ as producers prefer to concentrate of profits rather than quality productions for RTM.

The disparity of awarding the hours had also become political, and the industry ‘societies’ and associations (as unions doesn’t exist) went to the Ministry and demanded hours for their societies to help their members who are finding it hard to make ends meet. It seems that only a few producers were making huge profits and these associations wanted more of the revenue to flow to the whole industry (or so they claimed). The story remains the same even today as associations beg, politicked, cajoled and threatened the government that they deserve hours from RTM to survive and support their members.

Due to political pressure, over years, some hours were given to various associations – SENIMAN, PPFM, PAPITA and KARYAWAN. It was deemed that profits from the hours awarded to the associations would create a fund to help the welfare of its members. However, some of the associations – re-offered the hours to third parties at 30% discount. The association rake in 30% profits whilst the crony producers make another 20% profit - meaning, the costs of production were still being depressed at about 50% of RTM’s purchase price.

2007 TENDER PROCESS

The 2007 tender process nearly killed the local film industry. For a year, 90 percent of the industry did not produce a single hour whilst RTM tried to change the commissioning scenario. RTM, due to the Minister’s intervention, decided to categorise producers into three definite categories – A, B and C with A being the top most qualified production house or company. When they categorizing ended, there was again much discrimination. Producers who just had minimal experience, no equipment and financial backing, but knew insiders, were given A Grades. Long time experienced producers with equipment, funding lines and creative teams but had no clout with insiders were listed or categorized as Grade B or even Cs.

The tender process aggravated the situation further. RTM was in no position to conduct such a tender process. They received thousands of full proposals to read and rate, and rumors have it that many proposals have yet to be read and vetted.

Producers spent hundreds of thousands preparing tender proposals but their proposals were deemed not suitable (these include producers who have been producing quality production for RTM).

As far as we know, RTM is the only TV station in the world that has a tender process for creative content. In most if not all other countries, creative content is a competitive exercise of who comes up with the best proposal and idea at any point of time. Producers pitch and present ideas to sponsors and TV stations with ideas and concepts (never full blown proposals).

Upon approval, a production committee oversees the production process till completion.


FUNDING AVAILIBILITY

The tender process also screwed up the funding process already established by SME Bank (Bank Pembangunan). Current the tender process requires all successful tenders awardees to establish a ‘5% performance bond’ to the Government’ for the production.

This means, if the producers won a RM500,000 production, they have to first put in a performance bond of RM25,000 (a bond enforceable for a year in a bank).

SME Bank already has a similar mechanism that they call a ‘sinking fund’ – a 20% force savings upon all payments received from RTM by the producer. This fund is released once the producer’s funding line is fully cleared.

Therefore, a producer faces a 25% cashflow problem in this current scenario. This is made further problematic with a prime interest rate of 8% on the outstanding loan. This further means, the producers are already looking at 33% cashflow obstacle.

Contrary to what many people think, SME Bank doesn’t give 100% loan for RTM’s contract. They currently offer producers a 70% funding to RTM’s contracts. And of this 70% they only release 80% upon receiving the contract from RTM. The balance 20% is only released upon RTM’s approval of the finished product. In effect, local producers only get a 48% cash drawdown available from SME Bank before they can start their production.

This is why, producers try to produce the total production based on funding available which is 48% of the RTM’s contract.

This is again causes the rift and under funded producers ended up going to non-Bumi companies who have unlimited funds to finance their productions. These companies who are well funded and have equipment, welcome such producers.

At the end of the day, Bumiputra producers are surviving from hand to mouth whilst others (especially non-Bumiputra) smile all the way to the bank.

RTM’s tough production policies also scare away creative producers who would rather accept less money from TV3 and Astro as long as they have more creative control and produce products that they believe would be seen by more of their fans. Amongst the top producers doing work consistently for TV3 and Astro include Aziz M. Osman, Rosham Nor, Sheila Rusly, Erma Fatima, Rashid Sibir.

Producers and directors that hardly ever do any work with RTM any more because of the bureaucratic maze of RTM’s procedures include Othman Hafsham, Dato Rahim Razali, Nurhalim Mohamed, Ahmad Tarmimi, Bernice Chauly, and many others.

In the middle of last year, the industry heard of rumors which later became ‘open secrets’ by the news news of four unknown companies had received windfalls after being commissioned thousands of hours – this makes the tender process a laughing stock in the industry. It was rumoured that RTM/Ministry, or someone of power, in the Ministry, had approved each of these entities more than 1000 hours each (a total worth of RM400 million). These hours included the production of original production and the sale of imported and syndicated television programmes.

DIRECT NEGOTIATIONS

At the end of 2007, after the departure of former Information Minister Dato’ Zam Maidin, the tender process was in limbo. The new Information Minister was the dynamic Dato’ Shabery Chik. Things once again became fluid and blurry. RTM’s KSU then announced that whilst the tender process will still be maintained, RTM will introduce other measures that will help the industry.

One of these measures was that RTM is allowing direct negotiations – proposals given directly to RTM as was practiced ten years ago. However no details were offered and to date, no producers know what the KSU meant.

He also announced that if producers are confident of their own materials, they could produce it first (at their own cost and risk) and offer the completed product to RTM for purchase. RTM assures that all quality productions will be bought at attractive rates.

The non-Malay producers with bottomless funding sources cheered the news and are currently producing series and telemovies for RTM, confident that whatever they produce would be taken up by RTM. As far as we know, only a handful of Malay producers have gone that route as they feel it too risky. The few Malay producers that are producing ‘finished products’ are actually working for these non-Malay producers.

SYNDICATED PROGRAMMES

Another form of business being done by producers and distributors is the acquisition of syndicated programmes to RTM. Syndicated programmes are foreign programmes from overseas (The USA, Australia, Britain, Japan, Indonesia, India and China).

The price of these programmes are not standardized because it depends on the popularity of series and the speed at which it is offered to RTM since their airing in its original country.

These syndicated programmes also include movies, telemovies, documentaries and gameshows.

Currently, the biggest distribution companies in the country are Juita Viden and Vision Plus (both non-Malay controlled companies). With the current hours awarded to them, the lucky three new companies, are trying to outsell these two giants.

Vision Plus basically has given up the ‘battle’ to sell their best programmes to RTM because of the ‘difficulty’. They have built a better relationship with TV3, they sell their best titles to that station.

Vision Plus is also a regional player selling programmes to Indonesia, Thailand, Hongkong, Japan and Singapore.

Vision Plus represents some of the top TV principals or producers from the West. There is also a likelihood that these ‘approved’ companies by RTM are actually buying stuff from these two giants and resell the packages to RTM at a hefty price hike.

This is true when it comes to Indonesian TV series. Bumiputra distributors do not option Indonesian TV series for RTM because the non-Bumiputras have already ‘spoilt’ the market.

The TV producers in Indonesia prefer to work with non-Bumiputra distributors because they pay 100% up-front for the series they option for RTM. This ‘upfront payment’ means millions of Ringgit.

RTM then overpays these distributors between 100-300 percent. Most Indonesian TV series and serials (sinetron) are actually only worth between US$300 to US$2000 per episode but these distributors, claiming series popularity in Indonesia, dump these series between US$5000-US$8000 per episode to RTM.

CONTENT REQUIREMENTS

What the public sees on RTM are controlled by a handful of RTM’s executives who have their own ideas about programming and production content. There is no consistency and no strategic or long term planning.

The joke about RTM is that when a new Minister comes in, old policies are scrapped and new policies brought in. In the past six years, RTM has had four Ministers – Tan Sri Kadir, Zam Maidin, Sabree Chik and now DSU Rais Yatim.

A majority of the local drama’s commissioned by RTM are simplistic social dramas that are “stale in originality, monotonous and of low entertainment value”.

Malay dramas in RTM are a laughing stock of the industry because the quality is questionable. Most of the good directors and producers who understand public taste prefer to produce dramas for TV3 and Astro. However, a few good producers and directors still continue working on projects for RTM because they feel they still can make a difference. But they have to suffer the bureaucracy to get their vision onto the channel.

RTM truly needs to re assess the commissioning process. Producers are held to ransom by a handful in RTM. The situation and relationship between RTM and the producers MUST change. Sometimes it doesn’t help when producers are treated like idiots and incompetent people. Othman Hafsham, a man with a proven track record, is one of the top and talented local producers who have had enough being told what to do and how to do it from people who have had no production experience before. I too had been called for a production meeting with RTM (for a proposal I sent that they said they wanted to commission) but unfortunately, five minutes into the discussion, I rejected the offer to do the project.

However, like most producers who depend solely on RTM, we usually sit and nod and smile at the remarkable comments they make about our proposals, in hope that they will approve it. The credo is that since RTM is paying for the production let them have what they want especially when RTM actually pays better than the other stations. So basically the local producers shut up listen and accept all the comments from these few and produce whatever proposals that are approved. It is after all the producers' rice bowl and they cannot bite the hands that feed them. The circle is therefore vicious.

The tender process did not solve anything. Production is a creative process and tenders do not guarantee programme success.

RTM also has a weird view of documentary production. Documentaries are not cheaper to produce than dramas. In fact, good documentaries are difficult and expensive to produce because they need extensive research.

Malaysian-made documentaries are not popular at all with foreign markets because its content is weak. Only fully sponsored documentary series like Jejak Rasul can break the foreign market (only Islamic market).

RTM also thinks that documentaries can be made by producers who are good at making dramatic content. They also do not understand that producers should compensate researchers (who are experts in their fields) properly. These doctors and professors, who make the difference in the documentary content, should be paid well for their knowledge and their time.

Documentaries need input from experts, professional researchers and educationists – all these are unique professionals. They are paid very highly for their time however, producers who produce documentary and magazine programmes cannot afford them – that is why producers hire unqualified writers and journalists to do research for them.

Good documentaries sell overseas. They have a long shelf life and are easier to sell than dramatic content. Therefore, Malaysia needs quality documentaries and RTM (and not Discovery Channel) should be the right party to assist documentary filmmakers to produce world-class documentaries.

TECHNICAL REQUIREMENTS

The industry is waiting for RTM to accept HD and HDV quality products including ‘16:9’ widescreen productions which is banned from RTM.

HDV quality is accepted worldwide and is broadcast standard that is being accepted worldwide. RTM insistence of using Digi-Beta and Beta SP originated dramas (which is analog by definition). Rejecting dramas shot in HD or HDV is ridiculous.

The drama industry will face a great paradigm shift if RTM accepts HDV dramas. The technology is affordable and directors and producers can be more creative and productive. The camera is lightweight therefore allowing the camera crew to be more productive.

However, RTM does not seem to believe in HDV technology. RTM is pushing the expensive Digi-Beta technology to the industry (stating officially that only Digi-Beta content is broadcast quality). DigiBeta, which is nearly obsolete elsewhere in the world, is being dumped in Malaysia. A Digibeta player costs RM140,000 per unit whilst a HDV player costs only RM25,000 per unit. A DigiBeta camera with recorder costs RM150,000 whilst a high end HDV camera is only RM40,000.

HDV and HD would be the ideal way to go for producers and RTM if they want to follow the digital world.

BUYING PRICE FOR LOCAL PRODUCTIONS

The industry is thankful that RTM is currently both the best paymaster and offers the producers the highest price per hour. However, most producers who have big outfits cannot survive on producing one 13-episode series per year.

For an average size production house, they require at least RM 1million in revenue to survive because their average gross profit is about RM250,000 from this one million. Less operating and capital expenses, the company may make a net profit of about RM50,000 per year.

In the light of the current fuel price increase, it makes production much more expensive. I understand that RTM believes producers can produce dramas and content for RM50,000-RM60,000 per telefilem (at RM100,000 selling price), but ‘true’ producers who use experienced directors, writers and artistes, require at least RM,70,000-RM80,000 to produce good quality dramas for RTM.

Fuel price increase would also make shooting on location outside Klang Valley too expensive, and therefore it is hoped that RTM would be able to revise their purchase price upwards.

I would also like to suggest an open pricing policy for productions. This means that the procurement unit in RTM reviews purchase price of projects on a project-to-project basis. From the production proposal they receive, they can judge the correct production costs and purchase price for that project.

The current fixed price policy promoted by RTM now forces the producers to only propose projects that would fit the RM100,000 price tag. Producers will not propose productions that use CGI, specials effects, special costumes, exotic locations and sets and scenes that require lots of extras.

It is sad that currently, RTM doesn’t procure any costumed series because the price constraints doesn’t allow producers to produce anything requiring period sets, costumes and also stunts.

RTM’S ROLE IN PRODUCING BUMIPUTRA BROADCASTING TYCOONS

There are no Bumiputra broadcasting tycoon or TV producers in the country. Apart from TV3, which is a GLC, no Malay or Bumiputra broadcast personality can claim to be a tycoon.

Yusof Haslam too cannot claim to be that because he only produces two to three programmes for RTM. Anyone whose revenue is below RM10 million a year is no tycoon.

Compared to Ram Punjabi and the Samtani family in Indonesia – who are real TV tycoons – Malay film producers are a pitiful lot.

In Malaysia, content is King but Malay producers are not. RTM must be able to create at least 3 broadcasting tycoons who are involved in production and distribution in the same league as these Indonesian tycoons who also have a strong presence in Malaysia. Producing tycoons by way of giving them handouts like 3000 hours, and then watch them exploiting the industry they are supposed to help. should not be the way. These should be tycoons who understand and develop the industry from within.

CONCLUSION

This is not a tall order. RTM has the tools and it does not take much to get things in order. Creative people are getting frustrated, and they want to be active and produce quality work. RTM can truly be their saviour and not their bane.

ALL RTM needs to do is listen, cooperate, empathise not sympathise, assist and develop the industry.

Let’s hope that Dato Seri Utama Dr Rais Yatim can do a Chris Angel and make the industry float to heights never before reached.