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)