RI pay-TV business labors to survive
By Antariksawan Jusuf
JAKARTA (JP): At the end of 1998, the Indonesian pay- television industry is struggling to survive the painful economic crisis, but the future remains rosy in this vast market of more than 200 million people.
The government has issued nine licenses, but only three operators -- Indovision, TV Kabel and Indonusa -- have launched their commercial operations.
Due to the economic crisis, Metra license holder has put off indefinitely its plan to start operating in October. Metra, owned by, among others, businessman Sudwikatmono, Henry Pribadi, state TVRI and PT Telkom, earlier planned to roll out its service early this year.
Good news came in mid December. In spite of the economic crisis, market leader in free television RCTI announced the soft launching of its cable service, Indonusa. The hard-wire cable operator with a total investment of Rp 3 billion is owned by PT Telkom, PT Telekomindo, media giant PT Datakom Asia and RCTI.
Indonusa's launch came at a time when direct-to-home (DTH) operator Indovision was in the midst of a serious rift with media mogul Rupert Murdoch's Hong Kong-base Satellite Television Asian Region (Star) TV.
The dispute saw Star TV withdrawing eight channels under the Star TV Group: Star Movies, Star World, Star Sports, (V) International, (V) Asia, Fox News, Phoenix and Film Indonesia.
Star, which owns 45 percent equity in the DTH platform in Indovision, is opposing the switching of its services from Palapa C2 to Datakom's S-band Cakrawarta-1 satellite. The switch would cost Star US$1 million a month to lease transponders.
Earlier, all Indovision's 31 channels were broadcast from Hong Kong. By using Cakrawarta, broadcasting could be controlled from Jakarta. In its latest announcement, Indovision said it would be in full gear again next January with several additional premium channels such as Kermit, AXN Action and Animal Planet.
Looking at the number of its subscribers, currently a total of 34,000 by DTH and 12,000 by cable, it is easy to say that the Indonesian pay-TV industry is still some years away from taking off. This number is expected to remain unchanged in the coming months and before the economy gets back on track.
However, RCTI VP and operations director Alex Kumara says that considering the current cable TV distribution in Indonesia, with 26.2 million TV households, there is so much room for growth.
Out of the more than 200 million population, "Currently there are only 12,000 subscribers of cable TV among 60,000 already connected houses in Jakarta," Kumara said. Connected homes are situated in very limited enclaves such as Sunter, Kelapa Gading, Kemang, Kebayoran Baru, Kuningan, Cipete and Menteng.
Other countries, such as China, India, the Philippines and Taiwan, have hundreds of cable operators each.
With PT Telkom's fiber optic cable facilities, Indonusa expects to sign up 60,000 homes out of Jakarta's hundreds of thousands of middle and upper class residents who seek home entertainment other than that available on regular television.
"Even TV Kabel finds it difficult to fulfill the demand for cable service in Jakarta only because not all areas are reachable by cable," Datakom spokesman Eddie Ellison said, adding that its license covers all areas in Java.
There will be no head-on competition among the three operators. Aside from ownership -- Datakom Asia has stakes in each operator -- all operators have agreed to set the same price for their services.
"Subscribers can decide which cable operator they want to have," Kumara said.
However, Kumara sees a bigger opportunity for companies offering services other than the DTH system in big cities. "The sign-up fee is much lower," he said.
In terms of quality, satellite service is superior to cable. But with its decoder and satellite dish, DTH has a higher sign-up fee.
"Suppose a hotel subscribes to 60 channels using DTH, it would have to purchase 60 decoders. Costing some Rp 6 million to Rp 7 million for the parabola antenna and decoder, the investment would be very expensive," Kumara said.
To reduce the price of satellite dishes and subscription, Indovision expects to utilize locally made satellite dishes. The dishes are expected to be produced by the Bandung Institute of Technology. "We expect this local dish will help reduce the sign- up fee."