Press license policy doesn't deter investors

Press license policy doesn't deter investors

JAKARTA (JP): Indonesians do not like the word "retreat". A
popular proverb, mati satu, tumbuh seribu, which means "one dies,
another appears", is reflected strongly in the nation's
publishing industry.

Two magazines and one tabloid, Tempo, Editor and DeTik, were
banned last June. In a period of a little over six months, two
new magazines, Gatra and Tiras, took their place.

The potential of the market, which is still wide open for new
publications, notably for those specializing in particular
fields, such as economics, is said to be the main reason behind
the growth of the industry despite such pitfalls as press bans.

"Indonesia is still lacking in print media, while the number
of Indonesians who are literate and love to read keeps
increasing. Therefore, in terms of business, this industry is
very promising," said Marah Sakti Siregar, chief editor of the
newly-published Tiras weekly.

Launched last month to replace the banned Editor magazine and
produced by former Editor journalists, Tiras aims to regain the
favor of faithful Editor readers. Before the ban, Editor's
circulation was around 60,000 copies per week.

According to a survey carried out by the Tiras magazine, not
all readers of the three banned publications have switched to the
other magazines available on the market. After the banning of the
three media, there was a void of between 300,000 and 350,000
copies per week.

"That's why we believe publishing Tiras will be profitable. We
hope we can seize a bigger market this time, not only among
former Editor readers, but also the readers of the defunct Tempo
and DeTik," Siregar told The Jakarta Post.

Aburizal Bakrie, the man behind the Bakrie Group conglomerate,
which has expanded its business field with the dailies Pelita and
Berita Yudha, as well as the Gema Olahraga sport magazine and
ANteve television station, shared Siregar's view.

The Bakrie group is reported to have allocated not less than
Rp 100 billion rupiah (US$47.16 million) for its media business.
For ANteve alone the group has spent around Rp 60 billion.

The lure of profits encourages people to invest in the media
business. The powerful SIUPP, or publishing license, policy,
which can confront them with a ban at any time, does not seem to
be a threat anymore. The publishing license, has in fact become
an element, which can tone down competition in the industry.

Or as Siregar put it: "The SIUPP is not wholly an obstacle. In
the business world, there is a kind of tradition that the more
regulations there are, the more chances there are to get more
profits. SIUPP offers protection for those who have invested
billions of rupiah in the business because it is difficult for
people to apply for it."

Commenting on the publishing license, Bakrie strongly argued
that it is not an obstacle for investment.

"In Singapore, where regulations are stricter, The Straits
Times, for example, makes a lot of money."

Media also means power and prestige.

"One of investors' reasons to entering this business is to get
the power and the prestige. By possessing a publication, they can
grow bigger and use their media as an umbrella for securing their
business, or they themselves, on condition that journalists of
their media are willing to do that," Siregar said.

By expanding into the press business, investors have the
chance to become informed, he added.

"It is possible that they use their media business to monitor
information from their business partners or competitors. Again,
this is valid only if their journalists don't mind doing such a
thing," Siregar explained.

But investing large amounts of funds in the business doesn't
guarantee that it will work and that the publication will sell
like hotcakes, said Ashadi Siregar, a lecturer at the
communication science department of Gadjah Mada University in
Yogyakarta.

"The media business doesn't acknowledge a common business
formula, because a publication should be particular. It can't use
another products' recipe. It should be very competitive and bear
a specific character. It is a very serious and difficult
business," Ashadi told Sinar weekly.

Bakrie, who agreed that it is a high risk business, said that
the press industry is similar to the property business because it
is involves long term investment.

"The rate of return can reach 30 percent to 40 percent
according to our prediction. But, we are dead, if no one wants to
place their advertisements in our media," he added.

Siregar is more optimistic in this view. Tiras, published with
capital of around Rp 5 billion, is predicted to gain a rate of
return in a period of three years. (als)