Government rules out new television stations
Government rules out new television stations
JAKARTA (JP): The Ministry of Information has ruled out licensing any new television station, saying that the current industry is already saturated in terms of advertising revenues.
Director General for Radio, Television and Film Dewabrata told The Jakarta Post that any new television station will not likely survive the fierce competition for advertising raging between the five existing commercial networks.
According to the Association of Indonesian Advertising Agencies, companies spent Rp 1.5 trillion ($652 million) in television advertising between January and September last year. RCTI received 40 percent of the total, SCTV (22 percent), TPI (18 percent), Indosiar (12 percent) and ANteve (8 percent).
Dewabrata confirmed the rumors that Programa 2, owned by state-run television TVRI with coverage limited to Jakarta, may be tapping advertising money soon, but only in a limited way that should not have any impact on the commercial television stations.
Programa 2 will enter into a contract with a private company to manage its programs, he said.
The station however will not be competing with commercial stations for "spot advertisements", he said, adding that instead, some of the programs on Programa 2 will be up for sponsorship.
Sources at the Ministry of Information said negotiations with a private company are still going on, and are expected to be completed this year. The sources added that Programa 2's coverage will not be expanded beyond the present scope of Greater Jakarta.
The government has resisted pressures to allow TVRI to tap commercial revenues. The state-owned network is financed from television license fees, government subsidies and royalties it receives from all the commercial stations.
TVRI was banned from carrying out advertisement in 1981, when it had a monopoly over TV broadcasting, on the grounds that the ads were encouraging consumerism among the country's poor people.
With the advent of commercial television in the last five years, the state network has come under pressure to upgrade its programs, and advertising revenues are deemed by politicians and analysts as the best answer. (01)