SCTV expects TV ad spending to grow 12%

SCTV expects TV ad spending to grow 12%

Rendi A. Witular, The Jakarta Post/Jakarta

Publicly listed television and multimedia company PT Surya
Citra Media (SCM), which operates the Surya Citra Televisi (SCTV)
television network, estimates that television advertising
spending next year will grow as much as 12 percent.

SCM president director Fofo Sariaatmadja said advertising
spending by the corporate sector was expected to grow to between
Rp 6 trillion (some US$666 million) and Rp 7 trillion next year,
with the economy growing at a faster rate.

"Higher economic growth, which will fuel higher consumer
spending, will drive retail companies to increase their business
activities and spend more on advertising," said Fofo in a public
briefing to reporters and investors on Wednesday.

Fofo said SCM had projected that consolidated operating
revenues would increase by between Rp 960 billion and Rp 970
billion this year, with an expected revenue growth of 10 percent
next year.

The Indonesian economy, Southeast Asia's largest, is projected
to grow at 5.4 percent next year, from the 4.8 percent estimated
for this year, with domestic consumption as the primary growth
engine.

SCTV president director Wisnu Hadi said the station has
targeted its audience share to remain at above 17 percent next
year, with general entertainment and news programs contributing
the most to this share.

On the basis of AC Nielsen surveys, SCTV ranked third in
audience share for all telecast hours from January until August
this year, with Indosiar and RCTI ranked first and second
respectively.

General entertainment accounted for 63 percent of SCTV's
programs, followed by news (18 percent), infotainment (7
percent), sports (6 percent), religion (3 percent), and children
and other programs (3 percent).

About 66 percent of its programs are derived from local
production houses, with the balance from overseas.

To support its audience share expansion, SCTV, plans to add 18
new relay stations next year for an investment of Rp 27 billion.
At present the station has 32 relay stations throughout the
country, covering 248 cities with some 158 million viewers.

By mid 2006, the station expects to have 60 relay stations,
which will support its plan to broadcast the 2006 World Cup Final
(Soccer) in Germany.

Elsewhere, Fofo also said that SCM planned to expand its
activities next year by investing in radio and print media
businesses, and by acquiring existing television stations.

SCM shares ended unchanged at Rp 700 on the Jakarta Stock
Exchange on Wednesday.

Local television stations have been struggling to survive,
this amid lower profits due to the high cost of producing high-
rating TV programs in an effort to maintain audience share.

The stations need to come up with better programs in order to
compete in the crowded broadcast sector, which is packed with 13
television stations that broadcast nationwide and locally. In
addition, 17 new stations are due to start broadcasting next
year.