Foreign investors sought to rescue TV stations

By Sylvia Gratia M. Nirang and Dwi Atmanta

JAKARTA (JP): Television audiences may have noticed that they are not being subjected to as many ads interrupting their favorite shows these days.

If you haven't noticed this, television stations certainly have since advertising is their lifeblood.

Just as many private TV stations here were beginning to find their feet, they have suddenly been forced to forget all their dreams of pursuing innovations only to economize for their very survival.

The fact that advertising has dropped over 50 percent has made it impossible for stations to upgrade their facilities and programming.

Mass communications expert and public relations manager of Rajawali Citra Televisi Indonesia (RCTI) Eduard Depari said there was no other way to cure the country's ailing electronic media industry than pouring in foreign capital.

"Injecting fresh funds is the only feasible option. But we cannot expect it to come from local investors due to the current economic crisis," Depari told The Jakarta Post.

Investment regulations are a legal barrier to the idea, however. Indonesian law stipulates that foreign investors may not own stakes in media firms.

The law was made due to fears that the media industry could come under the influence of foreign interests.

"We, TV people, have repeatedly urged the government to liberalize the TV industry, because we can no longer maintain such regulations in the current free market economy," Depari said.

Such demands have fallen on deaf ears in the past, but the argument has taken on a new meaning as the industry struggles to survive the crisis.

"We want the government to revise the current broadcasting law in order to allow foreign investment," Depari said.

RCTI, owned mostly by former president Soeharto's son Bambang Trihatmodjo, will turn nine tomorrow. It is the oldest and reportedly the largest private TV station in the country.

Indosiar, which celebrated its third anniversary earlier this year, is the sixth and youngest private station.

Depari said RCTI had implemented a number of policies aimed at saving money, ranging from reducing air time to cutting back on the airing of imported programs.

"Our advertisement revenues have dropped 55 percent as of August. According to our president director, we are experiencing a negative growth of 14 percent this year," Depari said.

RCTI's advertisement revenue last year stood at a healthy Rp 340 billion -- slightly better than 1996's Rp 320 billion, despite the onset of the economic crisis in July last year.

"Even programs which used to be backed by the most sponsors, such as prime-time serials and movies, lack advertisements now," Depari said.

He said RCTI had tried its best to avoid cutting air time, a strategy employed by other private stations. Cutting air time at a time when ad revenues are too small to support a full day of programming has saved some stations as much as Rp 150 million a day in operational costs.

RCTI has also tried not to lay off employees.

"We'd rather cut our directors' salaries up to 25 percent and not pay our commissioners' salaries in order to help hundreds of employees who earn less than Rp 1 million per month."

Broadcasting reruns is another way to cut costs.

"At least 30 percent of our current programs are reruns. We are also very selective in buying local programs.

"The rupiah's free-fall made foreign serials completely prohibitive. But we are still broadcasting several foreign programs which have been part of our image, such as Italian league and boxing matches," Depari said.

The station will broadcast the World Boxing Council welterweight title bout between holder Oscar de la Hoya and Julio Cesar Chavez live on Sep. 15.

"It is clear that the private TV industry is managing only to subsist at this time. Expanding networks, constructing studios and replacing outmoded equipment are now out of question.

"Rather than thinking about gaining profits, now we only think about how to survive."

Depari predicted that RCTI would remain on the air at least until December, even if the economic slowdown worsened.

"But we are optimistic the crisis will stop next year," he said.

Reforms

Depari said that private TV stations had called on the government to review the broadcasting law enacted last year in order to minimize the government's intervention.

He said the current law gave the government too much power to regulate commercial stations.

"The law is not in line with the current reform era which demands for more freedom and creativity."

He underscored the need for TV stations to perform their roles, which included criticizing the government.

One of the most controversial contents of the law is that it allows the government to revoke the license of a TV channel indicted for breaking the law pending a court verdict.

"It literally means killing the TV station before its trial. It will be very difficult for a suspended station to regain ground after a stint off the air for three or four months. Its audience will have moved to other channels," he said.

Depari said that the television industry needed an independent body to settle problems linked to broadcasting ethics.

"We need an independent authority, whose members would be comprised of representatives from the government, the television community, lawyers and practitioners, who will oversee any violations against broadcasting ethics, or public complaints before going to court," he said.

When asked about Bambang Trihatmodjo's role in RCTI, Depari said the commissioner president had never involved himself in the station's broadcasting policies.

"He understands the rules of the game very well. As an investor, he just wants his investment to pay off, instead of excessively controlling the company."