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.