RI's TV ad market becoming competitive

RI's TV ad market becoming competitive

LONDON (Reuter): Indonesia's advertising market has becoming increasingly competitive with an exploding growth in the amount of available television airtime, according to a report released yesterday.

Zenith Media said that, while Indonesia's advertising market was restricted by low average disposable income, it had grown rapidly since the dissolution of the state broadcasting monopoly in 1989.

"After the subsequent launch of five commercial terrestrial broadcasters, and the explosion of available airtime, the market has become highly competitive," the report, Television in Asia Pacific to 2001", said.

"Broadcasters have introduced more flexible airtime pricing arrangements to gain an edge over their competition," it said.

Zenith said broadcasters were hindered by poor television infrastructure.

"(But) the pool of advertisers and consumers should widen as the economy grows to encompass one of the largest television advertising markets in the region," the report said.

About US$668 million was spent on television advertising in Indonesia in 1995, which represented a 29 percent growth over 1994.

The figure was forecast to rise to $770 million this year and $1.5 billion by the year 2001, at constant 1995 prices.

While Indonesia has the fourth biggest population in the world, only about 40 percent of all homes have television, said Zenith, which is the media-planning and buying arm of Cordiant Plc, which also owns Saatchi & Saatchi Advertising.

The report also said $885 million was spent on television advertising in China last year over 1994, compared to $18.7 billion in Japan, $1.7 billion in South Korea, $1.5 billion in Australia, $1.1 billion in Taiwan and $1.0 billion in Hong Kong.

That year-on-year expenditure growth was expected to rise by the year 2001 to $3.1 billion in China, $22.6 billion in Japan, $4.1 billion in South Korea, $1.8 billion in Australia, $1.7 billion in Taiwan and $$1.4 billion in Hong Kong -- at constant 1995 prices.

Zenith said the presence of cable and/or satellite was expected to double in China, South Korea and the Philippines by the year 2001, and grow rapidly elsewhere, including in Hong Kong, Singapore and India.

In China -- whose 1.2 billion population makes it a hot area for western manufacturers and ad agencies -- 73 percent of all homes had television last year compared to 78 percent expected to have TV by the year 2001.

Only 31 percent of all homes in India have televisions, 40 percent in Indonesia and 57 percent in the Philippines, Zenith said.

Two-thirds

The report also said that only two-thirds of homes in the Asia-Pacific region have televisions, but the number is growing fast, and cable and satellite subscriptions are doubling in some countries.

The report said that growth in television advertising expenditure in Asia, which stood at 8.1 percent last year in constant prices, would ease slightly, with 5.5 percent growth forecast by the year 2001.

It said "television penetration" was low in Asia compared to the West, standing at only 63 percent of all households and forecast to be 67 percent by 2001.

But Zenith said 14 percent of Asian "television homes" already had satellite or cable TV, the same proportion that existed in Western Europe in the late 1980s, although nearly every European home had a television by then.

Zenith said Asian homes with pay-TV spent an average $5.00 a month on cable and/or satellite.

This included everything from Indian households that spent less than $1.00 to subscribers in richer countries that spent more than $30.00.

The kind of figures that Zenith released on television penetration, and cable and satellite are being gobbled up by multinational companies and ad agencies trying to reach Asia's increasingly affluent consumers.

The report covered Asia's 14 most developed countries or territories.

Zenith said the amount of money spent in Asia on pay-TV amounted to 11 percent of the total spent by television advertisers.

"By 2001, we think this will be 24 percent, which is Europe's current ratio, but Asia will be doing this with a third less television penetration," the report said.

While rapid economic growth has allowed many people in Asia to "get wired" and become more technically literate than counterparts in Europe, Zenith said Asia's television development resembled that in the West.

"Asia has not leapfrogged the traditional TV development of state monopoly, then deregulation, then private terrestrial and finally pay-TV, but cheaper technology has accelerated the process," it said.