New law looks to revive TV industry

New law looks to revive TV industry

By Antariksawan Jusuf

JAKARTA (JP): Hope is running high for a new much-awaited law
on the mass media to nurse back to health the Indonesian
television industry, which has been laid low by the economic
crisis.

The government has finalized a draft bill, incorporating laws
on press, film and broadcast media, a copy of which was made
available to The Jakarta Post.

As far as the television industry is concerned, there are two
fundamental changes in the bill, namely the permitting of foreign
ownership of media and the airing of commercials on state-run
TVRI network.

The bill, issued by the Ministry of Information, is currently
in the hands of the state secretary. It will then be brought
before the House of Representatives (DPR) for deliberation before
its final draft is signed by the President.

The information ministry, however, has also issued similar
versions of separate bills on the press, on the broadcast media
and on film.

"There have been calls by a group of people related to these
fields to have separate laws," information ministry's Chief of
Legal Affairs Risdaini said without elaborating which group
opposed an all-encompassing bill.

"So, we have prepared two versions to speed up the work. Just
in case the State Secretariat or the DPR ask for separate bills,
we will hand them over right away," Risdaini said.

The Indonesian Press Society has also drafted a press bill,
which provides more press freedom. The bill was submitted to the
House of Representatives recently. It is the House members who
will finally decide which articles of which versions are to be
included in the final draft.

Normally, it takes two to three years for a draft bill to be
passed into law. But in some cases, such as the deliberation of
the political bills, it could take only a few months.

A prolonged debate over draft laws usually occurs in the
legislature, and the State Secretariat is also often blamed for
holding onto bills too long. With many draft laws and regulations
waiting to be reviewed, the State Secretariat ranks each in order
of their urgency.

Given the current political situation, where Indonesians are
waiting for a new system on elections next year, the media law is
seemingly not top priority.

Television executives and observers agree the timing could not
have been more appropriate because the country is facing global
pressure from a more open market and economic woes threatening
stations with bankruptcy.

The bill states foreign investment in print media is allowed
up to 25 percent, and respectively up to 25 percent and 40
percent in the television and film industries.

"Stations are in need of capital injections. Realistically, at
this time, there will be no capital from local investors," RCTI
television station spokesman Eduard Depari said.

Fresh money from abroad is expected to help. The industry's
backbone of advertising revenue can no longer support the
industry. And if the economic situation persists, one or two of
the nation's five private stations are expected to fold.

Advertising spending on television last year slumped by 17
percent to Rp 2.21 trillion from the Rp 2.678 trillion recorded
in 1997, according to the Indonesian Advertising Agency
Association.

Still, the draft law, Depari said, was not sufficiently
anticipatory for the future.

"Twenty-five percent is a compromise from the government. But
the question is after 2003, that could be considered as an entry
barrier."

In 2003, when the 10 members of the Association of Southeast
Asian Nations implement their ASEAN Free Trade Agreement,
barriers to foreign investment will be removed.

Columnist and TV talk show host Wimar Witoelar echoed the need
to open up the sector. "If we are committed to an open economy,
foreign investment is positive."

Witoelar said the total number of shares, either 49 percent or
51 percent, was not the issue.

"I think we should protect the interests of investors --
whether he or she is an Indonesian or a foreigner is not
important."

He said it was more important to protect the right of people
to access to quality programming of information and
entertainment.

The specific article is also expected to create a level
playing field for the stations, TPI spokeswoman Theresia Ellasari
said.

Without naming names, Ellasari said foreign investment had
illegally entered one or two Indonesian stations.

"This fact undermines the power of the law and the impact is
creating unfair competition," she said.

With a total population of more than 200 million and an
estimated 26 million households as an audience, the Indonesian
market remains attractive to the rest of the world. In the
economic crisis, foreign investors will also see Indonesian firms
as promising because they are all undervalued.

However, big questions are already looming. There is
uncertainty over whether private stations still have to
contribute 12.5 percent of their gross advertising revenue to
TVRI. Private stations find the obligation a heavy burden. All
stations except for RCTI have yet to pay TVRI, and as of March
the total amount reached more than Rp 117 billion.

Article number 21 of the bill states that TVRI is financed by
the state budget, advertisements and other legal sources. Ads
were banned from TVRI, which is run under a foundation, in 1981.
TVRI income comes from the state budget, public license payments
and the 12.5 percent deducted from gross advertising revenue of
the commercial stations.

"I assume since TVRI can now carry commercials, private
stations will no longer contribute advertising revenue to TVRI.
It is not rational if they ask for it," Depari said.

Depari said the status of TVRI should be made clear. "Is it a
public broadcasting system, or is it a state television network
which is barred from airing commercials, or a state enterprise
which is run professionally and can be a profit center?"

Other substantial changes for television include the
obligation for private broadcasters to provide shares for their
workers, and restrictions to media cross-ownership. For example,
a shareholder of a free TV station is allowed to have shares only
in one other media (print media, radio station or pay TV).

A major drawback of the bill is that it does not protect
public interest or public safety. "It is clear that there is only
government interest in the bill," Depari said.

He would prefer to see the bill passed into a law by the next
legitimate legislature concerned with the issue.

And there will be no more instant revisions of a law which is
considered outdated, as was the case with the broadcast law.

The writer works for a private television station.