Rupert Murdoch enters Indonesian TV industry

Rupert Murdoch enters Indonesian TV industry

Ignatius Haryanto, Jakarta

After weeks of rumors among journalists, the media and
business communities, finally at the end of September, there was
confirmation, that News Corporation, through its wing in Hong
Kong, bought 20 percent of shares in ANTV, a local private
television station, which is owned by the Bakrie family. Aburizal
Bakrie is the coordinating minister for the economy.

According to the Indonesian Broadcasting Law, foreign
investors can own a maximum of 20 percent shares in an Indonesian
media enterprise.

The question for us now is what is the purpose behind Rupert
Murdoch and News Corporation coming to Indonesia? Is it purely a
business deal, that will have no other repercussions for society,
especially the landscape of the Indonesian media industry and its
stakeholders?

Through out the world there are only a few media giants that
control media content globally, namely AOL-TimeWarner, Disney,
Viacom, Universal, Sony, News Corporation.

The international media industry, from 1980 up to now has been
marked by mergers and acquisitions, resulting in fewer companies.

For other media moguls, the coming of Murdoch into Indonesia
will be a test, whether they should explore the Indonesian media
market.

Murdoch has proven to be strong enough to lead the battle in
the global media industry. While other competitors were fighting
hard to survive, like The Walt Disney company which the Economist
called "The Tragic Kingdom" - instead of the "Magic Kingdom", as
Disney was once called in the 1980-1990s, or like the mega merger
between America On Line and Time Warner in early 2000, that was
recorded as the biggest ever media deal, but turned out to be the
worst in history, since their shares were lower than expected.

What happened to radio and print media in the era of global
capital coming into TV industries? As the media industries have
now merged into various forms of media, people should be aware
that the capitalization in the television industry is higher than
other businesses.

The coming of Rupert Murdoch into the Indonesian media
industry is probably just the first step for other foreign
capital to enter the Indonesian market. Many media businessmen
are waiting anxiously to see whether Murdoch can make it or not.

According to the 2002 Broadcasting Law, foreign investors are
allowed a maximum of 20 percent shares. This is really the
opposite of what had happened in 1994 when then minister of
information, Harmoko, refused foreign investment to protect
"local and national culture". Is Harmoko's argument still valid
today? And in this respect, how can we deal with the issue of the
entry of foreign culture as against local and national culture.
Media regulatory bodies like the Indonesian Broadcasting
Commission (KPI) may be able to clarify this concern.

There are other issues related to the 20 percent maximum for
foreign investment. How can we be sure, that ANTV will only get
20 percent of foreign investment, because we know that global
capital can operate in a very sophisticated way, including how
can they enter a specific market. What can the media regulatory
body do about it?

How can they control the capital flow in this business? And
the hottest topic then, is concerning cross media ownership,
which is also stipulated under the Broadcasting Law, but there is
no further elaboration on that issue. Is this really the time for
the KPI to rule out cross media ownership?

Murdoch usually has a special team to lead his work, and for
that he can easily kick out people whose thinking is not in line
with its policy. No one can be sure that Murdoch and his team
will not use the same technique in Indonesia.

For the Indonesian audience, we still don't know what kind of
programs Murdoch and ANTV will provide in the future. More news
stories -- since Karni Ilyas from SCTV has agreed to join ANTV
soon, or more entertainment content? Murdoch and his empire are
famous for their entertainment kingdom; together with its right-
leaning TV Channel, Fox News.

Many predict that more entertainment content will feature in
ANTV, rather than serious or informational content. For Murdoch,
the important thing is to sell and for that we cannot hope that
Murdoch will provide us with insightful and intelligent programs.
Competition will be more intense in the media industry in the
future; more and more investment will be injected into this
industry. But what will happen after that?

The Entertaining Leviathan, will perhaps run the media
industry, and they will provide us with more and more
entertainment. Quoting Neil Postman famous book, they will amuse
us "till death."

The writer is a researcher at LSPP, concentrated on the media
ownership issue.