New TV stations: Hoping for high, hit by rupiah's fall

New TV stations: Hoping for high, hit by rupiah's fall

By Antariksawan Jusuf

JAKARTA (JP): The clock to the October deadline is ticking
loudly for four hopeful Indonesian television stations, and
current political and economic conditions are certainly not on
their side. And worse, most of the factors which have the
potential to derail their plans are beyond their control.

"The new stations cannot control what happens to the
government, to the rupiah, and with the demonstrations," said an
industry observer who asked not to be identified.

"With the current economy growing at 3.5 percent and if thing
go bad politically, I wonder how big companies like P&G and
Unilever will put large amounts of money advertising to people
who cannot buy their products," he added.

One of the victims of the weak rupiah is the much-anticipated
Trans-TV, which lists top Indonesian industry executives such as
Ishadi SK, Alex Kumara and Riza Primadi on its board of
directors. Ishadi and Kumara were listed among the Top 25 Most
Influential People in Asian Television by Singapore-based
Television Asia monthly magazine.

News director Primadi said the station was delaying its
launch from July to September this year due to the fall of the
currency.

The length of daily broadcasts will also be reduced from 3
p.m. to 12 a.m. on weekdays and from 5 p.m. to 1 a.m. on the
weekend. This schedule will be maintained for three months, with
broadcasts extended to 20 hours "when the economy is expected to
be in better shape".

But the station is sticking to its plan to cover seven cities:
Jakarta, Bandung, Semarang, Surabaya, Yogyakarta, Surakarta and
Medan. These cities, except Yogyakarta and Surakarta, are covered
by research firm AC Nielsen.

Pressure is not only coming from the weak rupiah and
established competitors such as RCTI, Indosiar, SCTV
and TPI, but also from other newcomers. All new television
licensees -- Trans-TV, LaTV, CitiTV and Global TV
must start broadcasting by October 2001, otherwise their permit
will be revoked and their Rp 1 billion (US$90,909) guarantee will
be forfeited to the government.

However, a soothing view to the situation is given by the
chairman of the Indonesian Advertising Agencies Association,
R.T.S. Masli.

"There is always room for newcomers because advertisers are
not loyal to stations but to programs. Say a successful program
moves from RCTI to Indosiar, the advertisers will follow the
program. Newcomers must create good programming that attract
viewers," Masli said.

Masli said the industry could support the launch of two new
television stations every year. According to him, annual
advertising expenditure grows at a rate of 30 percent per year,
except when there is an anomaly such as 1998 (after the economic
crisis).

According to Masli, last year advertising expenditure reached
Rp. 6.9 trillion, with 60.9 percent of this grabbed by television
stations.

This year advertising expenditure is expected to grow to Rp
9.1 trillion, with 62 percent going to television stations.

"There is also the possibility that old players will be wiped
out if they are not professional and if advertising agencies and
viewers leave them behind," Masli said.

"Considering our population of some 210 million people, we
need more stations. I think 18 stations by the year 2008 is an
ideal number. Compare us to the Philippines, which has some 58
million people and 13 stations," Masli said.

Over at Trans-TV, work is continuing for that maiden
broadcast. "Currently we have enough programming to fill
programming slots for the first 18 months," Primadi said.

He said that in the beginning, overseas programming will make
up 60 percent of content, compared to 40 percent local
programming. These numbers are expected to reverse next year. The
station is targeting 15 to 40-year-old viewers with 70 percent
entertainment programming, with the remaining to be filled with
news.

Trans-TV has employed more than 200 fresh graduates and put
them through a three-month educational program. "We will have a
maximum of 450 people when we are in full operation," Primadi
said.

Its headquarters, which is still in development, is a nine-
story building that also houses one of the largest TV studios in
the country.

There are also high hopes at LaTV, which is owned by Abdul
Latief, a former manpower minister. LaTV managing director Chrys
Kelana said the station would broadcast in the same seven cities
as Trans-TV. Currently it employs 25 people and this number is
expected to grow at least tenfold in July, three months before
the station begins full commercial operation.

The station will go on air with 60 percent foreign
programming, and for the first three months of operation it will
be on the air seven hours a day, with the hours expected to
increase next year.

The picture is rather blurred at CitiTV and Global TV.
CitiTV, which was acquired by one of the country's largest media
groups, Gramedia, has yet to reveal any plans. CitiTV CEO August
Parengkuan said the likely scenario was that the station would
start its operation in February next year. But until then, it
will broadcast a technical pattern.

The station has hired Dewi Fadjar, a former TPI operations
director, to head its operations department.

Meanwhile, Global TV, which was recently acquired by
Bimantara, is expected to go on the air with specific programming
that caters to a niche market.

Bimantara, which owns a majority share in RCTI, acquired the
new station to accommodate an overflow of advertising at RCTI.

Bimantara has appointed Nenny Soemawinata, former RCTI
operations director, as Global TV's project director.

An industry source said the station would target the youth
market with its programming. Although it has little time to
prepare for operations, Global TV is not expected to have any
technical difficulties. As Metro-TV did in its initial stages,
Global TV will exploit RCTI's facilities for its initial
broadcasts. "So the only problem for them is the programming,"
the source said.