Indonesia's TV stations struggle for survival<\/p>\n
Luas Samudera, Contributor, Jakarta<\/p>\n
The Bali bomb blast in October last year, which killed over 200
\npeople, mostly foreigners, devastated the country's tourism
\nindustry, yet the news had little effect on the television
\nindustry.<\/p>\n
Although this year's advertising revenue is still expected to
\nincrease supported by a stronger currency against the greenback,
\nindustry players are worried about the legislative and
\npresidential election next year, the first time in the country's
\npolitical history that a president will be elected directly by
\nthe people.<\/p>\n
Observers say business players will tend to wait until the
\ngeneral election, scheduled for April 2004, to throw in more
\ninvestment, including money slated for advertising.<\/p>\n
While this year's advertising expenditure is predicted to
\nrise, many believe the increase will not be as high as 2002,
\nwhich saw an increase of 37 percent.<\/p>\n
But still, life is not as easy as it used to be. With the
\nintroduction of several new commercial stations, competition has
\nnever been so tough. Stations are spending more money on
\nacquiring both local and imported programs to attract viewers.<\/p>\n
In the first nine months of 2003, two publicly listed firms,
\nIndosiar television and SCTV's parent holding company SCM,
\nreported a more than 50 percent drop in profit.<\/p>\n
Indosiar's profit dropped from Rp 278.1 billion (US$32.71
\nmillion) in 2002 to Rp 152.3 billion ($17.91 million) this year
\ndue to the rising costs of both local and imported programs.<\/p>\n
Likewise, SCM suffered a 51.35 percent drop in its net profit
\nfrom Rp 143.81 billion ($16.8 million) to Rp 69.97 billion ($8.23
\nmillion).<\/p>\n
Imported programs such as news from Middle East-based
\ntelevision, Al Jazeera and Al Arabiya, created a boost for
\nseveral stations shortly after the invasion of coalition forces
\nled by the U.S. and the UK in Iraq.<\/p>\n
But this year's trend among commercial stations are reality
\nshows. Although mostly filling the fringe time, they help the
\nstation to gain significant viewership shares.<\/p>\n
Most importantly, they have very low production costs, which
\nis what every station needs at this time.<\/p>\n
Currently each station produces its own format or acquires
\nforeign formats and produces them locally. To face the difficult
\nfinancial situation, most players are seeking injections of extra
\ncapital.<\/p>\n
SCTV issued bonds worth Rp 425 billion ($51.8 million) on the
\nSurabaya Stock Exchange at the end of June 2003. While Indosiar
\nplans to go private by delisting from the Jakarta Stock Exchange,
\nin order to add its foreign shares and to boost its liquidity.<\/p>\n
Under the new Broadcast Law, foreign investment in broadcast
\nfirms is limited to a maximum 20 percent which is already
\nexceeded in Indosiar. The Indonesian Banking Restructuring Agency
\n(IBRA) plans to sell the remaining shares of IBRA's Holdiko, some
\n8.26 percent of the total Indosiar's shares.<\/p>\n
In a similar move, Indonesia's first commercial station RCTI
\nissued medium term notes worth up to Rp 700 billion ($82.3
\nmillion) to finance broadcast related businesses.<\/p>\n
Bimantara group, major share owners of RCTI and Global TV, has
\nbecome the majority shareholders of TPI following an agreement to
\ntake over TPI's outstanding debt to satellite operator Indosat.<\/p>\n
TPI issued convertible bonds five years ago worth Rp 150
\nbillion ($17.6 million) to Indosat, equal to more than 40 percent
\nshares.<\/p>\n
Meanwhile, state-run TVRI claimed to be on the brink of
\nbankruptcy, earlier this year.<\/p>\n
The station, which has 395 transmitters and 23 regional
\nstations throughout the country, needs an annual Rp 1.3 trillion
\n($144 million) to function normally, but the state budget only
\nprovided Rp 150 billion ($16 million) in 2002, almost half of
\nwhich is allocated for the payroll of its 6,800 employees.<\/p>\n
To make matters worse, from January this year, the state has
\nnot allocated any budget for the station. The government then
\nchanged its status from a public service company to a limited
\nliability company and injected Rp 250 billion ($27.7 million) to
\nhelp the new entity. The government also appointed a new board of
\ndirectors.<\/p>\n
However, those who still see a future in the industry are
\nlaunching or planning to launch new stations.<\/p>\n
To add to the current Islamic satellite TV Ar Rahman, Bandung-
\nbased Manajemen Qolbu launched Islamic satellite TV, MQTV, in
\nOctober. It is beamed through Palapa C-2 bird, MQTV eyes mainly
\nIndonesians who own a Rp 3.7 million satellite dish pointed
\ntoward the bird.<\/p>\n
It is also accessible in other countries in Southeast Asia and
\nbeyond such as Hong Kong, Taiwan, Australia, New Zealand,
\nBangladesh, Pakistan, part of India and the Middle East.<\/p>\n
The publisher of Republika daily, listed PT Abdi Bangsa, also
\nplans to launch its own commercial station next year. PT Abdi
\nBangsa president director Erick Thohir said the firm has gained a
\nlicense to run a commercial station which is expected to hit the
\nair next year.<\/p>\n
Indonesia's local free satellite television launched its
\nmaiden broadcast in September 2003 with an initial investment
\nearmarked at $1.5 million.<\/p>\n
PT Pacific Televisi Anugrah, with the help of a subsidiary of
\nMalaysia's electronic media firm Formis Sdn. Bhd in setting up
\nthe station both technically and in programming, catering to
\nviewers in North Sulawesi and Jakarta.<\/p>\n
One of the most anticipated names in the industry this year
\nare the 27 prospective members of the country's first Indonesian
\nBroadcast Commission (KPI), the equivalent of the American FCC.
\nAs stated in the new Broadcast Law, passed on Dec. 28 last year,
\nmembers of the KPI must be installed on Dec. 28 this year.<\/p>\n
The supposedly independent KPI will set broadcast guidelines,
\nprovide broadcast permits, oversee implementation of broadcast
\nregulations and dispense sanctions for the Indonesian broadcast
\nindustry.<\/p>\n
The 27 names have been submitted by President Megawati
\nSoekarnoputri to the House, which later will conduct a fit and
\nproper test and reduce the number of candidates to nine. Among
\nthose names are Bimo Nugroho of media NGO ISAI, lecturers
\nSinansari Ecip, Victor Menayang and Ade Armando, and former
\nANteve president director Anton Nangoy.<\/p>\n
In the area of pay TV, other than a dispute between
\nIndonesia's satellite operator PT Mediacitra Indostar, which
\noperates the Cakrawarta-1 satellite, and wireless Internet
\nproviders PT Global Pratamasis in Jakarta and PT Mitranet in East
\nJava's capital Surabaya over frequency interference, there is
\nlittle to report.<\/p>\n
A Jakarta-based company, PT Sarana Insan Muda Selaras, offers
\na multi-media cable service in Yogyakarta under the name Jogja-
\nmedianet.<\/p>\n
Indonesian satellite operator Satelindo has signed a deal to
\nlease its Palapa C2 transponder to Muracam TV of Japan to beam
\nprograms from several foreign TV stations to viewers in Japan.<\/p>\n
The deal was signed by Muracam TV CEO Osamu Murakami and
\nSatelindo director Djoko Prajitno. Prajitno said Palapa C2 was
\nselected because of its widespread footprint in Asia, Australia
\nand New Zealand.<\/p>",
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