Media wages an advertising war<\/p>\n
By Atmakusumah<\/p>\n
The competitive media environment in Indonesia is
\nstrengthening the strong and sidelining the weak. This is the
\nfirst of two articles.<\/p>\n
JAKARTA (JP): Television viewers are in for a treat this year.
\nJakarta will soon have another private television station, Satya
\nMandara Televisi (SMTV). This means viewers will have a choice of
\nsix private channels and one state-owned channel.<\/p>\n
In addition, the government is planning to open a cable TV
\nchannel that uses a decoder and transmission receiver for
\nviewers. This channel will air education and entertainment
\nprograms for 12 to 18 hours a day. Initial programs will be
\ndirected for university student audiences.<\/p>\n
On the other hand, TV entertainment company Indovision offers
\nfive foreign TV channels which subscribers can switch to with a
\ndecoder: CNN (for news), HBO (films), ESPN (sport), The
\nDiscovery Channel (science) and TNT (cartoons).<\/p>\n
Indovision was established in 1994 by media entrepreneur Peter
\nF. Gontha.<\/p>\n
The new privately-owned Indonesian communication satellite,
\nCakrawarta, launched from French Guyana on Nov. 12 expands the
\nnumber of pay channels Indovision offers from 25 to 40. Gontha is
\npresident director of the Datakom Asia group that is behind the
\nUS$173 million satellite.<\/p>\n
The government's domestic satellite, Palapa, can relay 16
\ntransnational stations. After the launch of the third generation
\nC-1 series in January 1996, Indonesian satellite dish owners can
\nnow have more stations to choose from. An estimated 700,000
\ndishes are now installed in Indonesian homes, offices and hotels.<\/p>\n
All this sets the stage for a bigger scale "undeclared war"
\nbetween the print media and private television stations for
\nadvertising revenues with little warning on Indonesia's media
\nscene. Now the faceoff apparently has spread into the newsroom
\nwhere editors plan the tactics and strategy to outreport the
\nopposition.<\/p>\n
The advertising war started when the Indonesian government
\npermitted the airing of the nation's first private TV station,
\nRajawali Citra Televisi Indonesia (RCTI), on Aug. 24, 1989.<\/p>\n
Four other commercial stations quickly followed: Surya Citra
\nTelevisi (SCTV), Cipta Televisi Pendidikan Indonesia (TPI),
\nCakrawala Andalas Televisi (ANteve), and Indosiar Visual Mandiri
\n(Indosiar). All are based in Jakarta.<\/p>\n
Before 1989, Indonesia had only one television station
\ntransmitting nationwide, the state-owned Televisi Republik
\nIndonesia (TVRI). It debuted on Aug. 24, 1962 -- 27 years before
\nIndonesia's first private TV station.<\/p>\n
Indonesia now has an estimated 20 million TV sets. Some 100
\nmillion Indonesians 10 years old and above, out of a total
\npopulation of 200 million, watch television.<\/p>\n
The government also manages the first radio station
\nestablished in the country after Indonesian independence in 1945.
\nRadio Republik Indonesia (RRI) was established on Sept. 11, 1945
\n-- less than a month after the Aug. 17 proclamation of
\nindependence. It now has 52 stations throughout Indonesia's 27
\nprovinces.<\/p>\n
There are also 146 government-controlled local radio stations
\nmanaged by provincial governments throughout the country.<\/p>\n
Since the New Order under President Soeharto came into power
\nin mid-1960s, private enterprises have been permitted to open
\nradio stations. The number of commercial stations surged to 700
\ncomprising 247 FM and 453 AM stations.<\/p>\n
Indonesians use an estimated 40 million radios, 36 percent of
\nwhich are owned by urban dwellers. Altogether, radio has an
\nestimated audience of 150 million people.<\/p>\n
Meanwhile the print media has 167 newspapers, 77 of which are
\ndailies and 90 weeklies, with a total circulation of seven
\nmillion. The print media also has 124 magazines with a
\ncirculation of five million. This means there is only one copy of
\na print publication for nearly every 17 Indonesians.<\/p>\n
The Indonesian government restricts the number of print media
\npages to 24 for broadsheet newspapers and 48 for tabloids. The
\nreason for the curb is to ease competition between the "strong
\nmedia" and the "developing media".<\/p>\n
The information ministry limits advertising space to 35
\npercent of the entire number of pages of a publication. It also
\nplaces a cap of 20 percent and 25 percent of air time for TV and
\nradio respectively.<\/p>\n
Over the past decade, the print industry has seen the growth
\nof press conglomerates. In the past, notably before the enactment
\nof the 1982 press law, a press company was managed by press
\nprofessionals themselves. Now, non-press businessmen have entered
\nthe press business.<\/p>\n
Among the businesses owned by media professionals or those
\nwhich started their business in the media are Kompas, Jawa Pos
\nand Tempo, Pos Kota, Media Indonesia and Suara Pembaruan.<\/p>\n
Apart from publishing in Jakarta (except for Jawa Pos which is
\nbased in Surabaya), a media group would also cooperate with
\nprovincial media to develop small but potentially viable local
\npapers.<\/p>\n
In what are known as "technical cooperation" arrangements, the
\nmedia group would send management and editorial staff to a
\nprovincial publication that requested help. The cooperation
\nusually covers capital injection and provision of printing
\nequipment from the media group as well.<\/p>\n
Other groups are Femina and Kartini, both in Jakarta, and the
\nSuara Merdeka group based in Semarang, Central Java.<\/p>\n
Meanwhile, those new groups emerging in the past ten years
\nfinanced by investors who did not initially work and grow in the
\nmedia business include Bisnis Indonesia of hotelier Sukamdani S.
\nGitosardjono, Gatra-Paron of forest industrialist Mohammad "Bob"
\nHasan and Bintang under manufacturing magnate Sudwikatmono.<\/p>\n
Others include Fadel Muhammad of the Bukaka group in Warta
\nEkonomi, trade and building tycoon Aburizal Bakrie in the Sinar
\nPagi and Berita Buana dailies, and department store developer
\nAbdul Latief, currently minister of manpower, who has invested in
\nNeraca, Belanja and Tiras.<\/p>\n
A distinctively different kind of media entrepeneur has
\nentered the media business not for business reasons alone but
\nalso for intellectual and Islamic reasons. The Republika group is
\naffiliated with a brain trust, the Association of Indonesian
\nMoslem Intellectuals, ICMI, chaired by B.J. Habibie, the minister
\nof research and technology and president of the national aircraft
\nindustry, IPTN.<\/p>\n
The group publishes the Republika daily and the bi-weekly
\nmagazine Ummat, both in Jakarta, and owns shares in the Jakarta-
\nbased daily Indonesia Times and the Surakarta-based weekly
\ntabloid Adil.<\/p>\n
Big investors are also behind commercial TV stations. Bambang
\nTrihatmodjo is a major shareholder in RCTI. Bambang, President
\nSoeharto's second son, is chairman of the Bimantara conglomerate
\nthat is involved in apartment complexes to automobiles.<\/p>\n
Toll road builder Siti Hardiyanti "Tutut" Rukmana, the
\nPresident's eldest daughter, has a big investment in TPI.
\nMeanwhile, Bambang's wife, Halimah, and investor Henry Pribadi
\nhave interests in SCTV. Bambang has a stake as well in Indosiar,
\ncontrolled by the family of Sudono Salim, a long-time friend of
\nSoeharto.<\/p>\n
The Bakrie family holds the majority shares in ANteve.<\/p>\n
The print media is not only competing among themselves for
\ncirculation and public opinion, it now also has to accept the
\nreality of the new electronic media in the competitive arena.<\/p>\n
Within only five years since the first private TV station,
\nRCTI, came on the air in 1989, commercial television has captured
\n50 percent of the advertising revenues in Indonesia. The
\nremaining 50 percent is scrapped over by the print media, radio,
\nbillboards and movie theaters.<\/p>\n
Absolute figures of ad revenues of the print media continue to
\nrise annually. However, the print media's take of the whole ad
\npie is declining percentage-wise. In contrast, TV ad billings are
\nleaping in absolute and percentage terms.<\/p>\n
The table below shows where the print media stands on ad
\nearnings vis-a-vis commercial TV in billions of rupiah. The U.S.
\ndollar is valued at Rp 3,500 for November 1997 exchange rates and
\nRp 5,500 for December.<\/p>\n
(Translated by Warief Djajanto Basorie, the Indonesian version
\nis appearing in the weekly magazine D&R)<\/p>\n
Atmakusumah is an Indonesian media commentator. Formerly, he
\nwas an editor at the investigative Indonesia Raya daily. He is
\nnow executive director of the Dr. Soetomo Press Institute, a
\nJakarta-based journalism school for motivated university
\ngraduates who seek careers in the news media.<\/p>",
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"sponsor": "Okusi Associates",
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