The clock is ticking for RI's television industry

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.