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)