Foreign investors sought to rescue TV stations

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."