Press industry faces tough competition

Profits in the Indonesian press industry in Indonesia are increasing to such an extent that several non-media conglomerates were attracted to muscle their way into it. The Jakarta Post's team of reporters Johannes Simbolon, Christiani A. Tumelap, Aloysius Unditu, K. Basrie, Kornelius Purba, and Lukman Natanegara delved into the issue. A related story is on page 9.

JAKARTA (JP): The young man was torn between the patriotic calling of a military career or following his heart as a journalist.

It was the late 1940s and Indonesia was fighting for independence against the Dutch colonial administration.

He sought advice from Adam Malik, a journalist who would later become Indonesia's minister of foreign affairs and vice president.

"Many people have chosen to struggle with guns, but few with pens," Adam told the West Sumatra native. "Why should you go there (the military)? This (journalism) is no less important."

Mochtar Lubis took Adam's advice and the rest, as they say, is journalism history -- he is one of Indonesia's most respected journalists.

Nearly a half century later, budding Mochtars find themselves tussling with issues of career path and salary, not idealistic notions of struggle.

Some are still obsessed with promoting justice and democracy, which they continue to champion as the main mission of the press. Bu they must tread carefully through the minefield of tight censorship and the threat of closure by the government.

"Now, the slogan for the Indonesian press is not 'berani mati' (dare to die) but 'berani hidup' (dare to live), 'tetap kritis' (maintain a critical attitude) and 'tidak konyol' (not quixotic)," said columnist and head of the Indonesian Business Data Center Christianto Wibisono.

In a tough competitive market, Indonesia's press is focusing more on staying in business than noble visions of being the standard bearer of truth.

This survivalist attitude became a necessity following two mass bannings of publications in the 1970s, Daniel Dhakidae argued in his Cornell University dissertation The State, the Rise of Capital and the Fall of Political Journalism: Political Economy of Indonesian News Industry.

Dhakidae said the closures, which left hundreds of journalists disillusioned and jobless, taught the Indonesian press a bitter lesson of the foolhardiness of putting "all their eggs in one basket".

'Safety net'

The press recouped through expanding and diversifying into other business sectors, laying out a "safety net" in the event a publication was closed. Expansion also translates into publishing more newspapers and magazines.

The government's decision in 1981 to ban advertisements on state-owned television station TVRI also revitalized the battered press sector.

The resulting surge in advertising revenues enabled several major press companies to realize their expansion plans.

But the golden days of huge advertising earnings for the press came to an abrupt halt in 1990 with the debut of Indonesia's first private TV channel, Rajawali Citra Televisi Indonesia (RCTI).

Several publications, including Kompas Gramedia, Jawa Pos, Pos Kota, the Suara Pembaruan, Media Indonesia, Femina and Suara Merdeka, are giant business groups in their own right.

The most successful are Kompas Gramedia and Jawa Pos, which between them control 54 of the 297 newspapers, tabloids and magazines printed nationwide.

Kompas Gramedia owns Indonesia's biggest daily Kompas, with circulation of 519,000, and at least 27 provincial papers, magazines and tabloids. It owns the country's top selling publications, among them the children's magazine Bobo, Nova women's weekly and Bola sports tabloid.

Its wealth does not stop with the media; it also owns Media Bank and the Santika Group hotel chain.

PT Kompas Media Nusantara was the only media company among the 200 biggest taxpayers in Indonesia last year. It ranked 41, five places ahead of RCTI, the largest television network.

The Jawa Pos group's flagship publication is Jawa Pos, the largest daily outside Jakarta with a circulation of 360,000. It also operates 26 provincial papers, five tabloids and two magazines.

The group's business strategy has centered on taking over and revamping floundering regional newspapers. This scheme has proven more effective than hoping against hope for the government to ease up on strict restrictions on the issuance of new publishing licenses (SIUPP).

Although the advent of private television stations did slash its advertising revenues, the press business remains attractive. Data from Media Scene 1996-1997 shows newspapers and magazines reaped Rp 1.47 trillion, or 35.5 percent, of the Rp 4.14 trillion advertising expenditures in 1996. The five private TV channels -- RCTI, SCTV, Indosiar, TPI, ANteve -- garnered Rp 2.2 trillion, or 53.2 percent.

Conglomerates

The past decade has been marked by the entry of new, non-media conglomerates into the press business, including those owned by Bob Hasan, Sudwikatmono, Aburizal Bakrie and Abdul Latief.

Is the lure of handsome profits too good to resist?

"Generally speaking, the press is a business opportunity which simultaneously offers prestige to those involved in it," said Jakob Oetama, chairman of the Association of Indonesian Newspaper Publishers and chief editor of Kompas. "The press has prestigious non-business value because it has commitment towards value, fights for justice and so on."

Dhakidae said print media was still not as profitable as other business sectors in Indonesia because it had not received the same investment.

But businesses realize the importance of the print media and the influence it can have on diverse aspects of their operations.

"That's the way the capitalists view the press business," he said.

Dhakidae said the entrance of non-press conglomerates had raised the stakes for all participants as "the circulation of most papers has been stagnant over the past 10 years".

The only course of action for publishers is to woo readers from competitors, he added.

But it may turn out to be a case of survival of the fittest as advertisers show a growing preference for electronic media.

"What will happen next is that only three to four press businesses will survive as healthy and profitable business groups, while the rest will collapse," Dhakidae said.