Indovision cuts rates in hope of more sales
Indovision cuts rates in hope of more sales
JAKARTA (JP): Does pay TV have a future in Indonesia?
The answer is vague, but one thing is certain: PT Malicak Lintas Cakrawala, the sole authorized pay TV agency in Indonesia and better known as Indovision, has struggled to survive over the past year.
It changed marketing strategies several times before finally increasing the number of subscribers. When Indovision was launched in November, 1994, the firm first set the price of a decoder at Rp 4 million (US$1,733), then lowered it to Rp 2.7 million. In June this year the price was lowered again to Rp 1,485,000, which included a one-year subscription. By September, the firm charged subscribers Rp 660,000 for the decoder and a Rp 63,250 monthly fee. In addition to the lower fee, subscribers got a month's subscription as a bonus.
"With the lowered price, we want to reach not only the middle and upper class people but also those of the slightly lower category," stated Rudy Lionggo, Indovision's sales manager.
When tallied, the September price almost equals the June fee. Only the change in the payment system makes the September price seem lower.
"That's the lowest price we can offer," said Narry Kretarto, the firm's marketing manager.
The number of household subscribers increased from 6,000 in September to 11,500 the following month.
Depite what may look as an impressive increase, the number is still very small compared to other Asian countries. In Brunei Darussalam, for example, TNT & Cartoon Network alone has netted 15,000 household subscribers since it was launched last year. In the same period, the channel managed to get 1.5 million household subscribers in Taiwan, the highest number in the Asia-Pacific.
Indovision blames slow sales on the gratis culture of Indonesia.
"Our people have yet to get adjusted to pay TV," said Narry Kretarto, the firm's marketing manager.
Indovision is not the only firm to experience difficulty in collecting fees from Indonesian viewers. The state-run TVRI, which imposes a monthly fee of Rp 6,000 ($2.6) on all TV owners, rarely manages to collect its dues. RCTI was initially setup as pay television station but had to shift to commercial television for lack of subscribers.
Indovision also speculates that slow sales stem from their past strategy of focusing only on the middle and upper classes. This group can afford alternative entertainment beside television.
"We now target those who cannot afford to go to pubs on most nights and depend mostly on television for entertainment," said Rudy.
Commercial television's interesting programs might also slow sales, but Indovision believes its programs are more entertaining and more attractive because they are not crowded with commercials. They have TNT & Cartoon Network for cartoon and classic movies, HBO for feature films, ESPN for sports, and Discovery, a science program. CNN International was once only available through Indovision, but can now be seen without a decoder.
"Our market has been affected by CNN I not being in our package. People still prefer entertainment to news," said Krish Pribadi, Indovision's sales and distribution manager.
Star TV's management also signed an agreement to distribute their program through Indovision, but Indovision canceled the deal due to some technical and pricing problems.
Despite the lackluster market, some businesspeople still believe there is a big market for pay TV in Indonesia. International pay TV firms are also pegging Indonesia as a potential market because of its growing economy.
"We have big expectations about your country," Lisa Prestwich, deputy vice president, public relations, Asia Pacific CNN International and TNT & Cartoon Network said.
Indovision will lose its monopoly on pay TV, and Indosat and Indocitra Grahabawana are planning to run pay-TV programs through cable. The existence of several Indonesian pay TV companies will give international pay TV firms more bargaining power with Indovision. However, it is not certain when the Indosat-Indocitra joint venture will begin.
"We have only signed an MOU," said Rajamin Nasution, Indosat's spokesman.
Indovision, meanwhile, has decided to continue broadcasting their programs through satellite. The broadcasting is now conducted through the Palapa B2B satellite, but the company will launch its own Indostar satellite in 1997. The $210 satellite will allow Indovision's programs to be seen with only a decoder and a 70 centimeter satellite dish, much smaller than the 2.7 meter dishes required now.
Indovision hopes that with its own satellite they can further reduce the price and enable more people to enjoy their service.(jsk)