Research interests in the film industry have burgeoned in recent years as it has emerged as a new dynamic industry in world trade (UNCTAD, 2008). Whereas, most studies focus on its effects on culture and local audiences, this study aims to fill the gap by employing a qualitative research approach to increase our understanding on the challenges faced by the Malaysian film industry under the conditions of increased globalisation. The study found the main areas posing challenges as: (i) to produce film products that achieve international standards (ii) to compete with other countries as an attractive location for shooting, and (iii) to develop the animation sector. It is argued that the government's role is instrumental in alleviating the impact of globalisation on the indigenous film industry.