The clock is ticking for RI's television industry

By Antariksawan Jusuf

JAKARTA (JP): Indonesian television stations are biting their finger nails as their future remains uncertain. The legacy of Indonesia's former president Soeharto's 32 years in power could still wreak havoc on terrestrial broadcasters for a few years to come.

Two years ago, Soeharto signed and approved one of his last bills, the Broadcast Law, and gave the terrestrial stations a two year grace period to implement the new rules.

That two year grace ended last month. From last September, theoretically at least and until the new law kicks in, the networks have to abide by rules which controversially forbid foreign ownership, insist on heavy local content and require English dubbing for all foreign programs.

A proposal for a more progressive mass media bill, incorporating press, radio, television and the film industry, has been put aside by legislators. Instead, they passed the press law as a separate entity. Another bill -- on radio, film and television -- will be made by the current parliament.

The Broadcast Law number 24/1997 contains several articles which discourages the development of the industry and provides the ruling government with the power to control output in such a way as to threaten the principle of press freedom.

There is a clause that gives the government a control over the network's programming. Article number 7 states: "Broadcasting is controlled by the state, and the guidance and direction are provided by the government."

Article number 40 is even more restrictive. It states "Basically, only government-run broadcast media may conduct news programming. But private broadcast media are allowed to air their news programs only under certain conditions." It implies that the government has the power to decide which news items are permitted to be aired and which are not.

Other contentious parts of the new Broadcast Law include keeping to the ratio of 70 percent to 30 percent of local versus foreign content. One local network source says the stations simply cannot afford to meet the content quotas. In terms of prime time programming, it is now cheaper to buy foreign programs. For example, a one-hour local program costs up to US$18,000 compared to $8,000 to $12,000 for two hours of foreign drama or blockbusting action movies. Local producers are plagued by creeping inflation and high talent costs.

Several major Hollywood studios have cut prices by 50 percent in the last two years so that the stations can continue to afford to purchase their product. Others have introduced a more cooperative approach by allowing Indonesian stations to pay in rupiah.

In addition, they no longer require Indonesian stations to buy movie packages, a practice always insisted upon in the past. By having to buy lower grade and first class series and movies in one package, the stations' programming budget was liable to go down the drain because most of the movies and series were below the stations' required standard to air. Stations can now cherry pick whatever titles they are interested in.

The new Hollywood studio's policy is triggered by the fact that networks are suffering 17 percent lower advertising revenues of Rp 2.21 trillion in 1998 compared with Rp 2.67 trillion in 1997, according to the Indonesian Advertising Agency Association.

However the television network advertising figures show a slight improvement in the first six months of this year. TV advertising expenditure is expected to rise by 27.4 percent from Rp 2,213 billion recorded last year to Rp 2,820 billion this year.

It would be ridiculous to strictly impose the 70 percent content rule, or the channels would have to dub all imported programs into English and then subtitle these into Indonesian. The argument that English dubbing can minimize the influence of foreign values among less educated viewers is also flawed. And for the station, English dubbing is not a ratings winner, meaning less profit and additional costs to the stations.

The foreign ownership ban could also be problematic and is surely not anticipating the global economy of the future. Moreover, with the current economic crisis, only foreign parties can bring a helping hand.

What can the television stations do? They could wait until the new members of parliament pass a new broadcast law to replace the current one. But nobody can say how long this would be, as Indonesia's law-making procedure is also notoriously complex and depends on the urgency of the issue. It took more than two years for the legislature to pass the current law.

So in the meantime, one or two stations will be in dire straits; advertisers, the backbone of all the stations, choose the network with most viewers to air their commercials. With the current viewing figures, it will be difficult for stations with low viewing figures to attract advertisers and to make profits.

According to research institute SRI Nielsen, in the second week of September, 78 percent of Indonesian viewers tuned in to three stations RCTI, SCTV and Indosiar, each of them having a 26 percent station share.