Press industry faces tough competition

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.