Indonesian TV ambitions face bumpy road ahead

Indonesian TV ambitions face bumpy road ahead

Aug. 24 is jointly celebrated as the anniversary of three
television stations -- state owned TVRI and two private networks
RCTI and SCTV. Soon, there will be more TV stations, which will
heighten competition. How tough will the competition be if the
new TV stations are still struggling to get their signals up
before the Oct. 25 deadline? Is it a bumpy or smooth ride ahead?
The Jakarta Post's contributor Luas Samudera looks into the
issues.

JAKARTA (JP): When licenses were given to five companies to
run terrestrial stations two years ago, excited officials
predicted tight competition in the industry. Fast forward to 2001
and we are still not quite there yet.

Only Metro-TV has materialized the plan, four others Trans-TV,
LaTV, TV7 and Global TV are still struggling to survive. But they
are scrambling to get their signals up before the Oct. 25
deadline, otherwise they will have their broadcast permit
scrapped and their Rp 1 billion (US$117,100) guarantee forfeited.

This year's rupiah fluctuation against the dollar may well be
bitterly remembered among four future TV stations. Fluctuation
has forced them to launch the stations on the same date, Oct. 25.

It does not take a genius to see that in future the stations
will conduct a head-to-head campaign on their anniversary date.
It happens every single year, like this week's battle between
RCTI and SCTV, which both share the same launching date, Aug. 24.

And for an industry completely dependent on advertising,
having four TV channels celebrating their anniversary at the same
time in the future is really not good news. Advertisers will
finally have the last word to decide on which station they want
to advertise and on which program. Certainly, they are not going
to place their ads on head-on programs.

With the dollar standing above their estimate rate of Rp
10,000 earlier this year, it seems new stations have no other
choice but to meet the deadline no matter what.

The much-celebrated Trans-TV, financially backed by Bank Mega
and supported by high flying names in the industry like Ishadi
SK, Alex Kumara and Riza Primadi, has delayed its launching date
three times already.

"Well, the business is undergoing such a difficult time at the
moment that we have to face business reality. If we insisted to
go ahead with our initial plan to go on air last June, we would
have lost over 50 billion rupiah," Trans-TV CEO Ishadi said.

Business reality has also caused Trans-TV to alter it plans
from airing commercially 20 hours a day on their launch date to
only two hours of non-commercial broadcasting per day in four
cities -- Jakarta, Semarang, Bandung and Surabaya -- instead of
seven.

Transmission facilities in other cities such as Surakarta,
Yogyakarta and Medan, will hopefully be ready in late October or
November. Thanks to a last-minute loan from state bank Bank
Mandiri worth Rp 300 billion, it has now been given a boost to
meet the deadline. Still, its 900-meter-square studio, claimed to
be the largest in Indonesia, may not be ready by then.

A similar story goes for LaTV. Under the same pressure, it
will cut its plan for broadcasting for seven hours to just one
hour of promo-only programming.

"Commercial operations of seven hours a day are expected to
start in December," Managing Director Chrys Kelana said. Just
like TransTV, LaTV also plans to broadcast in seven cities. Five
of the seven cities were covered by research firm AC Nielsen for
rating and share data obtaining purposes. On its initial
broadcast, it may only reach four cities: Jakarta, Semarang,
Yogyakarta and Bandung.

A source at TV7, which was acquired by arguably the largest
media group Gramedia, said the station expects to air colorbars
and technical patterns only in October to meet the government's
deadline. Trial broadcasts are expected to begin in November,
before it launches its commercial broadcasts in February next
year.

Bleak future

Meanwhile, Global-TV's future remains bleak. Taken over by
Bimantara from a business group close to former president Habibie
earlier this year, Global's fate will be decided during
Bimantara's extraordinary shareholders' meeting later this month.

As a sister company to RCTI, Global-TV is expected to find no
technical difficulty in launching its service. It can lease
RCTI's facilities, said project manager Nenny Soemawinata, former
RCTI operations director. In terms of programming, a source said
Global-TV will be aimed at a young audience.

Currency devaluation is apparently not the only threat. A
bigger question is whether advertising revenues can support these
new players against the incumbents: RCTI, SCTV, Indosiar, TPI and
Anteve.

Also digging into this advertising pie are cable and satellite
televisions such as Kabelvision and Indovision and regional
television stations like Riau TV in Pekanbaru, Surabaya-based
Jawapos TV (JTV), and Amuntai TV in Hulu Sungai Utara, South
Kalimantan.

JTV expects to be launched on national Heroes Day Nov.10 to
commemorate the patriotic war against the Dutch in 1945 in
Surabaya, which was later locally known as the city of heroes. It
will cater for people in Surabaya and six of its surrounding
towns.

Certainly, the new terrestrial stations will face a bumpy road
ahead.

But new stations remain optimistic. Ishadi said the industry
can support an additional three stations. Indonesia's annual
MediaScene said total television expenditure this year is
expected to rise by 18 percent this year to Rp 5.821 trillion
from Rp 4.933 trillion recorded last year.

"So, we are aiming to become one of the three."