5.4 RQ2: What is the development path for Malaysian creative economy enterprises?

Animation History in Malaysia

Animation started in Malaysia mainly for documentaries and public service filmlets by the
Malayan Film Unit. However, the significant impact of the first cartoon Malay magazine, Gilagila
made the local market realise the potential of a cartoon sector in the country. The early
development of Malaysian cartoon and animation products were inspired mostly by western
influence. For example, Gila-gila copied the concepts of Mad and Crazy magazines, before
they gained their own identities that reflected local culture. The earliest local animation
products (Kluang Man, Silat Lagenda and Yokies) have some influences from the west and
Japan (Sang Wira) (Mahamood 2001, 142-143). Nonetheless, Malaysian culture was still the
primary element adopted by these early local products. Since then, animated products for
local television and film have grown to embrace Malaysian culture. The future direction of
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Malaysian animated products is to have significant global features with local culture influence
(3D World Magazine 2010).
With government support and encouragement, more private companies started to enter the
animation market in the mid-1990s. The Malaysian government has always been at the
forefront in developing and promoting local animated cartoons by providing moral, material
and financial support. Malaysian culture has been one of the most important aspects that the
government stressed upon in local animation products. This is based on their realisation that
foreign cartoons—especially from the west—are not suitable for local viewers, for they show
negative values that do not conform to the local culture (Mahamood 2001, 135). Hence, the
animated television series such as, Anak-anak Sidek, Kacang, Lat the Kampong Boy, Tuah,
Upin & Ipin, and Usop Santorian feature Malaysian culture. However, these series did not
have such a substantial impact as LCP’s Upin and Ipin. Also, these television series were only
popular among a small group of Malaysian viewers, except for Lat the Kampong Boy, which
managed to break through outside the Malaysian market. This success came because the
television series was co-produced with international companies from the Philippines, the US
and the UK. The series is adapted from the cartoon book by Lat, who is famous locally and
internationally. Unfortunately, not all Malaysians were able to watch Lat the Kampong Boy
because it was aired on a pre-paid television channel. Further, none of these television series
were turned into films (unlike LCP’s treatment of Upin dan Ipin), and after one to two years
they stopped their production due to internal problems and lack of response from the audience
(Filemkita.com 2010).
Data gathered from the Filemkita.com website (2010), reveals that in 1998 the first animated
film was produced in Malaysia. Silat Lagenda—adapted from the Malay legend of Hang Tuah
and his four friends who lived in fifteenth-century Malacca—had a total production cost of RM
6 million. Unfortunately, the audience response was not favourable, and the box office takings
amounted to less than RM 150,000.00. In 2001, a second animated film, Cheritera was
produced by Matahari Animation and Production Sdn Bhd, and their Indonesian partner Red
Rocket Animation. Once again this film did not manage to attract significant Malaysian
audiences. The box office takings amounted to less than RM 3,000.00. Not long after that
another animation film was produced and managed to collect almost RM 400,000.00. Putih
adapted the classic Malay folk-tale, Bawang Putih Bawang Merah, a Malay version of
Cinderella. The film did not use computer animation, instead using traditional drawing
animation methods. Table 5.4 shows more details about Malaysian animated films.
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Table 5.4: RQ3 - Animated films produced in Malaysia
Title and Year Producer Total
Cost (RM)
Story line
Silat Lagenda
(1998)
Peninsula Pictures Sdn
Bhd
RM 6
million
Malay self-defence called
Silat performed by five
youngsters
Cheritera (2001) Matahari Animation and
Production Sdn Bhd, and
Red Rocket Animation
(Indonesian)
Not stated Penan Kid (native ethnic in
Sarawak)
Putih (2001) Eurofine Production Sdn
Bhd
RM 1.1 Malay story version of
Cinderella
Geng:
Pengembaraan
Bermula 3D (2009)
Les’Copaque Production
Sdn. Bhd.
RM 4
million
Action adventure about how
twin and their friends solving
problem
(Filemkita.com 2010)
3D Animation Movie in Malaysia by LCP
LCP is the first animation company in Malaysia to become successful with their animation
products and merchandise locally and in the rest of the region. Their television series, Upin
dan Ipin started to make a substantial impact in Malaysian animation scene in 2008, followed
by their successful 3D animated film, Gang: The Adventure Begins in 2009. The total cost to
produce the film was RM 4 million, making it one of the most expensive local films produced in
Malaysia, but the cheapest 3D animation film produced in the world. The film and series were
not only well-received in Malaysia, but also in other parts of the region, such as Brunei,
Indonesia and Singapore. In Malaysia alone, the film collected RM 6.3 million—a significant
collection for the Malaysian market and for local film. Today, other countries such as
Singapore, Brunei, Indonesia, Turkey and India have started to buy LCP products. Their
television series and 3D animation film won multiple awards locally and internationally.
Presently, LCP is collaborating with Asian companies on future animation products. In 2009,
they decided to market their 3D animated film in India, adapting it for the local market by
working with popular Indian actors like Kamal Hassan to provide voices for the characters
(LCP 2010).
LCP has managed to become an eye opener in Malaysia with their animation television series
and 3D animated films. Their new ideas to produce animation products with local images and
culture that still have a global appeal managed to raise the Malaysian animation sector to a
different level. At present, the Malaysian public is aware of the potential of a Malaysian
animated industry that features Malaysian culture. Additionally, the process of developing the
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animation products involved three years of R&D, brainstorming, meetings, and discussions
that resulted in LCP’s products entering the market with more preparation, the right timing,
and meeting market demands. Further, their products were released at a time when animation
sector was experiencing significant growth due to the advancement of innovation in the
technology sector happening all over the world. Today, the facilities to develop animation
products are better and cheaper compared to a decade ago. All of these factors combine with
LCP’s new, unique ideas to make their products well received in the local and international
market. This proves to other Malaysian companies that Malaysian culture has significant
potential in animation market.
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5.5 RQ3: How do Malaysian creative economy enterprises utilise
traditional Malaysian cultural assets?
The findings in this section are answered holistically, based on the comparative analysis from
the literature of similar cases studies, mainly in developing nations, as well as the key
informant interviews and desk research.
I argue that there is a significant and close relationship between the animation sector and
Malaysia culture. During the interviews, the LCP staff often talked about creative industries,
creativity and Malaysian culture. Their top management also stress this particular point when
they had interviews with the local media (Raja Azaham 2009; Patrick 2008). They categorised
their products as belonging to creative industries, but they also agreed that culture is an
important aspect of their products and making their products unique. This is in line with what
Malaysian government wants from the animation sector in Malaysia: to have the country’s
national identity in their products (Muthalib 2007). An UNCTAD Report (2008) stated that
developing countries have rich cultural resources and these should be used to generate their
economy. As a result, the animation sector in Malaysia has a strong Malaysian traditional
culture when it comes to shaping the themes, subjects, plots, forms and content (Mahamood
2001, 149; Muthalib 2007). In addition, many authors in the literature have highlighted the
close link between culture and creative industries.
There is clear evidence that the creative industries and cultural sector need each other to be
become more competitive and to sustain their products in the market (UNCTAD 2004; 2008).
In the case of Malaysia, their multiethnic characteristic is the unique image of the country
(Musa 2000; Tourism Malaysia 2009), therefore culture has been used in many sectors,
particularly when the country is marketing their products and services to the world. The close
relationship between creative industries and cultural experience that exists in Malaysia is also
taking place in other countries in Asia such as China (Keane 2007, 77), Indonesia (Indonesia
Department of Trade 2008), Singapore (Yue 2006), and South Korea (Kim, Agrusa, Lee and
Chon 2007). In these countries, the creative industries are being developed together and side
by side with their cultural sector. Sometimes this happens indirectly rather than directly. For
example, in Taiwan the term, creative cultural industries is part of the government’s
commitment to protect their local cultural identity (Keane 2004). Thus, in Malaysia and the
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Asian and European regions (Bayliss 2006; Nielsen 2004), it is clearly shown that their
creative industries, culture and tourism are significantly related. 1
Although their products are primarily based on technological creativity, LCP realised the
importance of adding Malaysian culture to their product and services in order to make them
unique in the market. In their animation series, Upin and Ipin and 3D film, Gang: the
Adventure Begins, the three major Malaysian ethnic lifestyles were portrayed. This feature has
made them different, unique, and well received in comparison to the other animation series
and films on the market. Malaysia has the advantage of being a multiethnic country, and this
culture is being identified as a distinctive feature to be introduced to the world. Other earlier
animation films and television series in Malaysia have also implemented Malaysian culture in
their products, but majority of them failed to gain significant attention from local and
international markets. Most local animated films failed in the market, while the television series
only managed to capture children’s or small market attention. Learning from the failure of
those earlier products, LCP managed to devise a better version of the animation and 3D
products according to what the government and public wanted. LCP products showcased the
multiethnic culture of the country in a manner that is suitable not only for children but also
adults.
1 For the past decade, many research studies have acknowledged the growth of niche tourism activities
called film tourism (Hudson and Ritchie 2006). Many places in Australia, New Zealand, the UK and US
(refer to appendix 9) have reported significant tourist arrivals due to film tourism. However, the majority
of the studies on this topic focus on developed countries in the west, although Asian and African
countries (such as China, India, Indonesia, Japan, Morocco, South Korea, and South Africa) have also
gained substantially from film tourism. For example, the number of Japanese tourists to South Korea
increased significantly due to the success of their films and television series in Japan. Further, a South
Korean television soap drama received positive responses in Asia, and the number of tourists from
Asian countries to Korea increased tremendously, but data is not easily available on this topic. It is
beyond the scope of this study to discuss this topic further. For further reading relating to film tourism
refer to Beeton (2005); Busby, Brunt, and Lund (2003); Cousins and Anderek 1993; Singh and Best
(2004); Urry (1990).
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5.6 RQ4: How can Malaysia position itself in the creative economy in
the region?
For the past two years Malaysia has moved aggressively to position itself in ICT and creativity
related sectors not only in the region but also in the world. The development of the creative
economy, which is the umbrella for creative industries, has become a top priority for the
Malaysian government, and is always being discussed by the country’s top political leaders.
To speed up the development of these sectors, the government and private companies are
working together closely. The government is offering a range of incentives and support in
terms of budget allocation, friendly policies, and world-class facilities for local and international
companies to ensure the smooth growth of ICT and creative sectors in the country.
Importantly, by the year 2020, the government wants Malaysia to reach developed country
status.
Budget Allocation
In the 2010 budget, the Malaysian government allocated RM 400 million to the development of
creative industries in the country (MSC 2010). With help from the Malaysian private sector,
which is working closely with the government, there is potential for the creative industries to
become a major income source for the country. Unfortunately, government allocation is not
easily accessible due to the tight rules and regulation imposed on the application. MDeC
noted there have been problems in getting the allocation approved by government for
creativity sector, which is managed by MOSTI, because not many production companies have
been helped with this fund (Leong 2009). To gain MOSTI funding for research and
development grants is also difficult, particularly for the creative industries. Therefore, funding
allocation alone is not enough if its accessibility is too strict and not transparent for the market
players and researchers. This is an important issue that needs immediate attention in order for
Malaysia to have a better position in the creative industries in the region and in the world.
Policy‐makers in Malaysia
Positioning Malaysia in the creative industries in the region and in the world needs the right
policies. Clear policies from the government can provide a good guideline for Malaysian
creative economy players. This study found that the policy-makers in Malaysia demonstrated
they are actively promoting creativity, innovation and technology for the country’s
development. Thus, they are working closely with each other and with other organisations
internationally and domestically to develop the creative sectors in Malaysia. Among the major
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policy-makers involved directly with creative industries development in Malaysia are MICC,
MoTour, MOSTI, MOHE and MITI. A substantial impact can be seen in the animation sector,
particularly after the establishment of MDeC. The number of local animation television series
shown in Malaysia and outside the country has increased significantly. Friendly policies
relating to creative activities in Malaysia are encouraging more local and foreign companies to
invest in the country. However, there is no clear national creative economy policy being
introduced in Malaysia, although the term creativity is used extensively by many policy
makers. 2010 was announced as Year of Creativity and Innovation, but the impact was
insignificant. With no clear definition of creativity and innovation in Malaysia, this designation
remained nothing more than a slogan to the public.
More than five ministries play a major role in the growth of creative industries in Malaysia, with
three ministries—MOSTI, MoTOUR and MITI—assisting LCP with their 3D animated film and
television series. MITI and MDeC play a significant role in the marketing of LCP’s products
outside Malaysia. Sometimes the roles of these ministries overlap, creating conflict during the
implementation and enforcement stage. As well, debates take a long time to resolve, and this
is not productive for the development a young and growing sector like creative industries.
Preparing for the Global Market
Importantly, can LCP products compete with the animation products from developed countries
that have advanced technology and funding in the global market? With the significant gap that
exists between the developed and developing countries in this sector, the chances of
developing countries like Malaysia being competitive are slim. Animation products from
countries such as Australia, Japan, the United States (US) and United Kingdom (UK) are
recognised as market leaders in this sector (Rosnan et al. 2010). With rapid global changes in
technology, the animation sector is considerably competitive. A small company like LCP may
not be able to compete with large and established studios like Pixar and Disney. While LCP
has expanded their market into most South East Asian countries and other parts of Asia, their
products still cannot break into other regions such as the American and European markets.
Animated products from Japan (such as Bleech, Doremon, and Thundercats), have been wellreceived
all over the world due to their global characters, features and scripts. However, LCP
can use their strength of natural resources and cheaper labour to come up with new ideas and
services that target different markets. The animation products from LCP perhaps are more
suitable for Middle East and Muslim markets than animation products from Japan. Hence,
LCP should take this chance to network with companies from these markets. To date, with
new networking and close ties with other animation companies from China, India and South
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Korea, LCP can improve their products by sharing their technologies with each other, and
enter these new markets. From this networking, LCP products can explore fresh ideas. Also,
from their joint effort they may create a better chance to enter the global animation market.
Local Malaysian animation companies such as Handy Pro are reportedly entering the Saudi
Arabia market (Abu Bakar 2009), and MDeC has focused on the whole of the Muslim market
through their joint effort with Al-Jazeera television channel.
To prepare the company to become competitive in the global animation sector, LCP
introduced a slightly different formula for their second 3D film. For a start, their second 3D
animated film, which is scheduled to be launched in 2011 and titled Gang: Outer Space has
more global features. Also, the company is ready to venture into other types of films and not
limit themselves to animation (Raja Azaham 2009). Also, LCP has started to collaborate with
international partners from China, India and South Korea to exchange ideas about their
animated products, and plan to co-produce animated television series and films in the future
(LCP official website 2010). All of these steps are part of a plan to make an impact on the
animation global market.
However, with the fast changes in technology happening every day, the immensity of this task
should not be underestimated. To successfully position the country in the region, careful R&D
and innovative planning is needed. This is a competitive market, and LCP faces fierce
competition locally and globally. Also, governments around the world and Asian region such
as those of China, Indonesia, Singapore and Thailand are investing billions of dollars to
develop their creative industries. For example, Singapore has attracted not only many foreign
investors, but also creative talents to work there by using high salaries as an incentive. By
contrast, Malaysia has a different strategy and no interest in playing the “money game” to
attract local and foreign markets. Their main intention is to develop a strong base to foster
creative talent in Malaysia, as stated by MDeC Manager for Creative Industry Strategy and
Policy (3D World Magazine, 73). Competing with animation products from developed countries
is a difficult task for a small company like LCP, as animation companies from developed
countries have more advanced technology and stronger financial backgrounds than their
Malaysian counterparts. Thus, LCP and other Malaysian creative industries need to use their
unique culture and access to cheaper labour to their advantage. With rapid expansion of
Muslim market, the government is actively promoting Malaysia as a halal hub not only in food,
but also content industry.
The halal market for Muslim is identified as significant, and many non-Muslim countries such
as Australia, China, Denmark, New Zealand and the UK are also starting to capture this
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market (Fisher 2008), mostly on offering more halal food outlets, cosmetics, pharmaceuticals
and hygiene products. Although the halal term is not directly suitable to be used for animation
or content industry products, the current Malaysian products are suitable for Muslim viewers.
This is because the Malaysian culture that these products are portraying has significant
influences from Malay (Muslim) and traditional Asia. Recently, a 3D animated television series
called Boboiboy by Animonsta Studio featured a main character wearing a hijab, and one of
LCP’s main characters in their series and 3D film is the grandmother of Upin and Ipin, who
wears a hijab. According to Shafie and Othman (2006), the potential of the halal sector is
substantial because by the year 2025 it is expected that, thirty per cent of the world population
will be Muslim. This is another potential market that Malaysian animation products can
consider to penetrate in the future.
According to Jarman and Chopra (2007), developing nations like Malaysia tend to face two
major problems in developing their ICT and innovation relating sectors. Firstly, developing
nations are currently more successful in attracting the lower order activities of multinationals
that are being outsourced and off-shored to reduce costs; while a physical infrastructure can
be built over a period of few years, human capital takes much longer to develop, perhaps up
to twenty years for one child; this is due to the multifaceted nature of the knowledge economy,
which presents in a complex scope of activities. Secondly, the Malaysian government has
been criticised for not being open enough to new ideas, particularly when it comes to sensitive
issues such as culture, politics, and religion. Hence, those who have innovative ideas choose
to work outside Malaysia where they feel they are freer to implement their ideas. As a result,
the Malaysian human talent pool has migrated to countries like Australia, Hong Kong,
Singapore (Low 2001; Sidhu 2009), the UK and US. These countries not only encourage
creatives to express themselves freely, but they also receive a higher salary than if they work
in Malaysia. Renowned names in creative sectors, including Chef Wan (chef), Kamahl
(composer/singer), Jimmy Choo (fashion), Maha Sinnathamby (engineer/developer), Michelle
Yeoh (actress), Shahril Ibrahim (software developer), and Zang Toi (fashion), are Malaysians
who have built successful careers abroad.
Recently successful creative Malaysians abroad have started to show interest in working
closely with the Malaysian government and local companies. They are willing to train new
young talent from Malaysia to penetrate the global market. Also, the Malaysian government
has managed to attract many larger companies to open up local branches. These positive
changes can assist more creative talents from Malaysia in finding a global audience, introduce
the country as a good place to invest for foreign companies, and bring Malaysia a more
favourable position in the creative economy in the region and globally.
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5.7 Conclusion
This chapter examined LCP as a leading animation television production company in Malaysia
and Southeast Asia. Their television series and 3D film managed to create a significant impact
in the market by portraying Malaysian culture (refer Appendix 9). Animation is one of the
important sectors given top priority under Malaysian government MSC project. Beforehand,
Cyberjaya—the capital city for the Malaysian MSC—and Hong Kong’s Cyberport were
discussed. Both places aim to become their region’s ICT capital. The differences and
similarities between the two places were discussed extensively. RQ1 was addressed through
seven themes identified by this study based on the interview with LCP. Following that, the
second and third research questions were answered through the discussion on how Malaysia
developed their creative economy focusing on animation sector, and using traditional their
cultural assets. There is a close relationship between the animation and cultural sectors in
Malaysia. To date, the majority of Malaysian animation products are marrying both elements.
This is their unique feature follows the government’s direction to feature Malaysia’s culture in
animation products. However, the Malaysian animation sector is still new, and lacks advanced
facilities and funding. They also face fierce competition from developed countries and large
studios or productions with large budgets and established infrastructure. Thus, the future of
this sector is volatile and requires continuous support from the government. The last research question (RQ4) raised key issues (for example, budget, policy making, and global market  challenges) faced by the country currently in positioning Malaysian creative economy in the region.