Current Status and Support Policies for Regional Cinemas in Malaysia

Malaysia, a federal state, has diverse cinemas across its regions. Due to the country’s unique multicultural nature, local governments support cinemas tailored to their residents, attracting audiences. However, the regional film market has also faced a decline since the COVID-19 pandemic. This is not just a problem for regional cinemas but reflects a broader trend of avoiding crowded places due to the pandemic, alongside the normalization of online streaming services like Netflix.

For example, Malaysia’s largest multiplex chain, Golden Screen Cinemas, announced it would reduce the number of screens in shopping malls in the Klang Valley metropolitan area starting in 2024. Meanwhile, MBO Cinemas’ Petaling Jaya branch, located in a large shopping center with over 30,000 daily visitors, decided to close by June 30, 2024.

The fact that multiplex operators are restructuring and that cinemas in the metropolitan area—not just rural areas—are shutting down indicates the severe financial difficulties facing Malaysia’s film industry. While major multiplex chains in the capital area are seeking breakthroughs by adopting premium strategies, regional cinemas with low profitability are struggling more to attract audiences.

The Malaysian government lowered the entertainment tax on movie tickets from 25% to 10%, but this tax relief applies only to the federal territories and administrative centers (Kuala Lumpur, Putrajaya, and Labuan), so financial burdens on regional cinemas remain. In this difficult situation, local governments continue to provide diverse support tailored to their regional characteristics, significantly contributing to revitalizing regional cinemas by offering residents greater opportunities to enjoy culture and arts. This article reviews the current status of regional cinemas in Malaysia and explores the support strategies by region.

1) Selangor

Selangor, part of the metropolitan area, has the most cinemas in Malaysia. However, due to the pandemic’s impact on local cinemas, the Selangor state government implemented temporary entertainment tax reductions and exemptions from the previous 25%. According to the Malaysian Association of Film Exhibitors (MAFE), Selangor cinemas lost 80 million ringgit (approximately 17.6 million USD) in 2021. Operating profits were 45 million ringgit (approximately 9.9 million USD), down 85% compared to the previous year. In response to these difficulties, Selangor provided temporary entertainment tax relief in 2021. As of December 2021, this temporary tax cut and exemption reduced tax burdens by an estimated 50 million ringgit (approximately 11 million USD).

2) Kuala Terengganu, Pahang

In Kuala Terengganu, where over 95% of the population is Muslim, a gender-segregation policy in cinemas has been implemented since July 1, 2020, based on Syariah (Islamic law). Pahang, where over 70% of the population is Muslim, also considered a gender-segregation policy in cinemas in July 2020. However, this policy was not enacted following opposition from the Joint Action Group for Gender Equality (JAG), which criticized the Islamic party’s cinema segregation policy as outdated and discriminatory.

3) Kelantan

Kelantan, with over 95% Muslim population, remains the only state where cinema operations have been banned since the closure of Lido Cinema in 1997. Since the Malaysian Islamic Party came to power in Kelantan in the late 1990s, cinemas have been banned, citing that films undermine Islamic values and promote immoral behavior. However, recent signs suggest potential changes in Kelantan’s cinema policy. In 2022, the PAS Youth (Islamic Party Youth) declared they would permit cinema openings if policies such as gender-segregated screenings and bans on films during prayer times—as practiced in Kuala Terengganu—were followed.

<Northwest West Malaysia>

1) Penang

Penang has a rich film history, including one of Malaysia’s first cinemas, the Majestic Theatre, which opened in 1926. However, with the rise of multiplexes in the 1990s, many single-screen cinemas in Penang closed. The Penang state government has since transformed some closed single-screen cinemas into unique cultural complexes with private companies to serve local communities. Additionally, to revive the arts and culture sector post-pandemic, Penang applied a full entertainment tax exemption on cinemas from April to December 2021.

2) Perak

Perak, like Penang, has a history of early film industry development. Since the first cinema, Yau Tet Shin Cinema, opened in 1909, several single-screen cinemas operated, including Rex Cinema, Lido Cinema, Ruby Cinema, Cathay Cinema, and Sun Cinema, but most have been demolished or repurposed.

Perak preserves the historic facades of cinemas from the early 1900s to the 1940s and repurposes historic buildings into tourist facilities like hotels, restaurants, and museums. The state also operates Malaysia’s first drive-in cinema as a tourist attraction, selling vouchers usable at the drive-in as part of the Travel Perak Lah campaign, developing the drive-in as a tourism product to support regional cinemas.

<East Malaysia>

1) Sarawak

Compared to West Malaysia, East Malaysia—comprising Sarawak and Sabah—has significantly fewer cinemas. According to a nationwide cinema list compiled by the Malaysia Film Development Corporation on January 13, 2023, East Malaysia has only 21 cinemas. Sarawak, the largest state with an area comparable to all of West Malaysia, has only four cinemas in its capital, Kuching: TGV Cinemas, Lotus Five Star, MBO Cinemas, and GSC Cinemas.

Sibu, with a population close to 240,000 in 2020, once had eight cinemas but now has only one remaining, Kings Trioplex, as of 2024. Kings Trioplex survived largely due to marketing that reflects the population makeup—approximately 62% Chinese Malaysian as of 2010—using promotional posters from Taiwan and other Chinese-speaking regions. Through this targeted marketing, Kings Trioplex expanded to three screens in the 2000s and transformed into a multiplex with 3D screens in 2011.

2) Sabah

Sabah has five 10Star Cinemas locations, established in 2021, with new branches opened in Tawau, Sandakan, and Papar within the same year. 10Star Cinemas is well-loved by locals for improving film accessibility and operating in a way that reflects local culture.

Though East Malaysia has less film infrastructure than West Malaysia, regional governments provide meaningful environments for locals to watch films and hold cultural events in cinemas, creating meaningful spaces. In December 2023, the Malaysia Film Development Corporation announced plans to enhance Malaysia’s film competitiveness by highlighting the history and culture of East Malaysia’s legends and social customs, signaling increased future support for cinemas in the region.

<Conclusion>

The Malaysian film industry has recovered to about 75% of its pre-pandemic revenue, and cinemas like Golden Screen Cinemas have reinvented themselves as multifunctional cultural and arts spaces, screening live performances and broadcasting sports events to engage audiences.

However, as a federal state with diverse social and political circumstances by region, local governments support cinemas according to their unique characteristics. While regional cinemas in Malaysia have not flourished, local governments’ continued support plays a significant role in their operation.

The detailed report “Current Status and Support Policies of Regional Cinemas in Malaysia,” featured in KOFIC Correspondent Report 2024_Vol.38, is available on the Korean Film Council's policy research board.

Written by Hong Seong-ah, Malaysia Correspondent for the Malaysia Film Development Corporation

Original KOFIC Correspondent Report in Korean (Click)