Private networks welcome competition from TVRI
JAKARTA (JP): Indonesia's five current private television stations say they welcome greater competition from TVRI, which will soon be revamped, but warned against allowing the state- owned network to run advertisements.
Executives of the five commercial networks said a restructured TVRI would be welcomed as it would stimulate more competition in the TV industry to provide better programming for viewers.
The executives expressed their views during a joint hearing with the Commission I of the House of Representatives on Wednesday.
Taking part were M.S. Rallie Siregar, president of RCTI, Slamet Supojo of SCTV, Abdullah Alatas Fahmi of TPI, Agung Laksono of ANteve and Angki Handoko, the president of Indosiar, a new network which plans to go on air beginning in January.
"The restructuring of TVRI will encourage fairer competition among television stations," Rallie said at the hearing.
The TV executives however warned that allowing TVRI to run commercials to generate revenue could be a catastrophe for the media industry as a whole.
Total advertising spending in Indonesia averages approximately Rp 1.2 trillion ($570 million) a year, which is divided among television, newspapers and magazines.
"It would be terrible if TVRI were also allowed to compete for a slice of the cake," Agung Laksono said.
The government has announced its plan to turn TVRI, now a state agency under the Ministry of Information, into a corporation, managed along corporate lines. The move is expected to make the management of the network more professional.
There are debates within and outside the government about whether or not TVRI should be allowed to tap advertising revenues. The network stopped airing advertisements in the late 1970s after being criticized for encouraging consumerism among poor people.
TVRI has since been financed entirely by television license fees and, with the arrival of private television five years ago, it has also been receiving royalties from the private stations.
"TVRI does not need to run commercials because the royalties we pay should be sufficient to finance its operation," Agung Laksono said.
Revenues
Siregar said each private station pays 12.5 percent of its annual revenues as a royalty to TVRI.
RCTI last year paid Rp 20 billion in royalties to TVRI, SCTV Rp 8 billion and TPI Rp 12 million. Anteve will only begin paying royalties this year while Indosiar will follow suit in 1995.
Legislator Sophan Sophiaan has estimated that TVRI will bring in Rp 180 billion in revenues this year. The vast majority is generated from TV licensing fees with 5.8 percent coming from private stations, he added.
TVRI is by far the oldest network and has far greater reach throughout the archipelago, a definite edge were they to seek advertising receipts.
The new private stations, by comparison, are only received in Indonesia's bigger cities. They have sought to make up for lost ground by offering better programs, knowing that TVRI's hands are bound given its status as a state agency.
The aggressive programming by the private networks however has drawn strong criticism from some members of the public who said that the Hollywood action pictures, kung-fu films and Hispanic telenovelas now being shown on television screens are undermining traditional local values.
Responding to this allegation, the five executives at the House hearing yesterday said that they are aiming to increase the local content in total programming from an average of 30 percent to 70 percent. (imn)