Dynamic development in local television industry

By Marselli Sumarno

JAKARTA (JP): The emergence of five private televisions in Indonesia over the past six years has triggered an explosion in local TV production houses and commercials. There is brisk competition to win the hearts of TV viewers in commercials.

Fortunately the stations do not have to vie with government- owned station TVRI, which celebrated its 33th anniversary yesterday (Aug. 24), for commercial accounts. Private TV stations, however, do have to contribute a part of their income from commercials to TVRI. Minister of Information Harmoko said last year that they should hand over 12.5 percent of the money they generate from commercials to TVRI. This state television, which now covers 80 percent of Indonesia's territory, also receives revenue from television license fees collected from TV owners.

In line with the pace of economic progress, more money has been spent on advertising. The significant growth of four business sectors: automotive, pharmaceuticals, household goods and the property business, has greatly contributed to the increase of spending on commercials. This year TV advertisement spending is estimated to reach US$350 million.

Is the "advertisement cake" big enough to be distributed between the five private TV stations, whose average overhead cost is $4 million each month?

Last year the biggest portion of commercials went to RCTI (41 percent), followed by TPI, SCTV and ANteve. The composition of earnings from advertisement this year will obviously change because of the emergence of Indosiar in January. Indosiar soon won public attention by telecasting good quality films from the U.S. and Hong Kong.

Apart from vying for advertising clients, private TV stations are also engaged in a competition to expand their national-scale broadcasting networks and to attract viewers. New tactics have been launched to steal people's hearts. For example, in May ANteve joined hands with MTV Asia Network with an inauguration which was symbolically marked by superstar Jon Bon Jovi being in town. Under this cooperation, some 4 million viewers of ANteve can now watch MTV musical programs for six hours a day in three sessions of two hours each.

The competition between private TV stations is becoming tougher, but at the same time there is dynamism in terms of business.

The number of locally produced TV films, miniseries and serials (known here as sinetron) rocketed to 730 last year. That was up from just 112 in 1990. This year the total is expected to reach 800.

There is a demand for more and more local programs. However it is not that easy to meet the demand. An imported program can be purchased at a low price, ranging from between US$1,500 and $2,500, but the production of a local program of the same duration may cost between $20,000 and $30,000. Meanwhile, the rate of booking a locally made commercial at prime time is only $4,500 while that of an imported one is between $5,000 and $7,000.

There is an indication of saturation in local programs, particularly TV films. Some are boring while others are carelessly made. A few, however, have really won the hearts of viewers of all walks of life, for example Si Doel, Anak Sekolahan (Doel, the Graduate), a drama comedy directed by Rano Karno, who is also in the main cast. This comedy, telecasted by RCTI, which celebrated its 6th anniversary also on Aug. 24, is simple but fresh.

Si Doel was the most popular program in Indonesian TV history in 1994. While this year it seems that the title is to go to The Return of Condor Heroes, a Hong Kong kung fu serial, which was aired by Indosiar.

Another phenomenon which is worth exposing here is the boom of telenovellas (Latin America miniseries). These include Maria Mercedez, Kassandra, Valerie Valerie, Ines the Secretary, and Simplementa Maria. One of the reasons why telenovellas have become popular is because they are dubbed in Indonesian, although the quality of dubbing is poor.

The competition goes on and on. Now the TV stations have new competitors they must reckon with, namely foreign TV broadcasting networks. These foreign TV stations, which get into people's houses through satellites, must be taken into account because the Indonesian government has permitted ownership of parabolic antennas and adopts an open sky policy.

The Indovision Group, the licensed holder of cable TV broadcasting in Indonesia, and PT Matahari Lintas Cakrawala, as its customer service department, have served as agents for the American "Gang of Five" group made up of CNN, ESPN, HBO Asia, The Discovery Channel, and TNT & The Cartoon Network.

As of last June, Indovision serves about 10,000 houses and 18,000 hotel rooms. Peter Gontha, president of Indovision, expected that eight percent, or around 1.4 million, of Indonesia's estimated 17 million households with TVs will become subscribers to Indovision.

Indovision also established cooperation with Star TV in April. Jakarta has since become the headquarters of Star TV for Southeast Asia. This TV network has appointed David Dennis as its Southeast Asia Regional Director.

"The largest business potential over the next five years in Southeast Asia is here," David Dennis said to Variety entertainment weekly. Star TV has set a target of some 70,000 subscribers in Indonesia.

According to research conducted by the Ministry of Information, 70 percent of a total of between 800,000 and one million owners of parabolic antennas use their antennas to improve the quality of local TV transmissions. There may be a shift in the use of parabolic antennas in future. But one thing is sure: the TV industry in Indonesia reflects a dynamic business.