Private networks welcome competition from TVRI

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)