RI pay-TV business labors to survive<\/p>\n
By Antariksawan Jusuf<\/p>\n
JAKARTA (JP): At the end of 1998, the Indonesian pay-
\ntelevision industry is struggling to survive the painful economic
\ncrisis, but the future remains rosy in this vast market of more
\nthan 200 million people.<\/p>\n
The government has issued nine licenses, but only three
\noperators -- Indovision, TV Kabel and Indonusa -- have launched
\ntheir commercial operations.<\/p>\n
Due to the economic crisis, Metra license holder has put off
\nindefinitely its plan to start operating in October. Metra, owned
\nby, among others, businessman Sudwikatmono, Henry Pribadi, state
\nTVRI and PT Telkom, earlier planned to roll out its service early
\nthis year.<\/p>\n
Good news came in mid December. In spite of the economic
\ncrisis, market leader in free television RCTI announced the soft
\nlaunching of its cable service, Indonusa. The hard-wire cable
\noperator with a total investment of Rp 3 billion is owned by PT
\nTelkom, PT Telekomindo, media giant PT Datakom Asia and RCTI.<\/p>\n
Indonusa's launch came at a time when direct-to-home (DTH)
\noperator Indovision was in the midst of a serious rift with media
\nmogul Rupert Murdoch's Hong Kong-base Satellite Television Asian
\nRegion (Star) TV.<\/p>\n
The dispute saw Star TV withdrawing eight channels under the
\nStar TV Group: Star Movies, Star World, Star Sports, (V)
\nInternational, (V) Asia, Fox News, Phoenix and Film Indonesia.<\/p>\n
Star, which owns 45 percent equity in the DTH platform in
\nIndovision, is opposing the switching of its services from Palapa
\nC2 to Datakom's S-band Cakrawarta-1 satellite. The switch would
\ncost Star US$1 million a month to lease transponders.<\/p>\n
Earlier, all Indovision's 31 channels were broadcast from Hong
\nKong. By using Cakrawarta, broadcasting could be controlled from
\nJakarta. In its latest announcement, Indovision said it would be
\nin full gear again next January with several additional premium
\nchannels such as Kermit, AXN Action and Animal Planet.<\/p>\n
Looking at the number of its subscribers, currently a total of
\n34,000 by DTH and 12,000 by cable, it is easy to say that the
\nIndonesian pay-TV industry is still some years away from taking
\noff. This number is expected to remain unchanged in the coming
\nmonths and before the economy gets back on track.<\/p>\n
However, RCTI VP and operations director Alex Kumara says that
\nconsidering the current cable TV distribution in Indonesia, with
\n26.2 million TV households, there is so much room for growth.<\/p>\n
Out of the more than 200 million population, \"Currently there
\nare only 12,000 subscribers of cable TV among 60,000 already
\nconnected houses in Jakarta,\" Kumara said. Connected homes are
\nsituated in very limited enclaves such as Sunter, Kelapa Gading,
\nKemang, Kebayoran Baru, Kuningan, Cipete and Menteng.<\/p>\n
Other countries, such as China, India, the Philippines and
\nTaiwan, have hundreds of cable operators each.<\/p>\n
With PT Telkom's fiber optic cable facilities, Indonusa
\nexpects to sign up 60,000 homes out of Jakarta's hundreds of
\nthousands of middle and upper class residents who seek home
\nentertainment other than that available on regular television.<\/p>\n
\"Even TV Kabel finds it difficult to fulfill the demand for
\ncable service in Jakarta only because not all areas are reachable
\nby cable,\" Datakom spokesman Eddie Ellison said, adding that its
\nlicense covers all areas in Java.<\/p>\n
There will be no head-on competition among the three
\noperators. Aside from ownership -- Datakom Asia has stakes in
\neach operator -- all operators have agreed to set the same price
\nfor their services.<\/p>\n
\"Subscribers can decide which cable operator they want to
\nhave,\" Kumara said.<\/p>\n
However, Kumara sees a bigger opportunity for companies
\noffering services other than the DTH system in big cities. \"The
\nsign-up fee is much lower,\" he said.<\/p>\n
In terms of quality, satellite service is superior to cable.
\nBut with its decoder and satellite dish, DTH has a higher sign-up
\nfee.<\/p>\n
\"Suppose a hotel subscribes to 60 channels using DTH, it would
\nhave to purchase 60 decoders. Costing some Rp 6 million to Rp 7
\nmillion for the parabola antenna and decoder, the investment
\nwould be very expensive,\" Kumara said.<\/p>\n
To reduce the price of satellite dishes and subscription,
\nIndovision expects to utilize locally made satellite dishes. The
\ndishes are expected to be produced by the Bandung Institute of
\nTechnology. \"We expect this local dish will help reduce the sign-
\nup fee.\"<\/p>",
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