Business

Pay TV: Growing market
for providers

With so far limited household penetration, the pay-television market in Indonesia offers enormous room for growth. According to global research company Pyramid Research, the household penetration rate, which reached about 3 percent last year, is expected to expand to 7 percent in 2015, driven by an improving economic situation and an increased market.

There are a number of pay-TV companies now operating in Indonesia; they include the three largest operators Indovision, Telkom-owned Telkomvision and First Media, which dominate the market, and several smaller ones such as Okevision and Gainindo.

Indonesia will soon have more pay-TV operators such as Megamedia, Topaz and Biznet, which are expected to launch their services in the near future.

The increase in the number of pay-TV companies has also resulted in the increase in the market for content providers, such as Fox International Channels. Ward Platt, the president of Fox International Channels for Asia Pacific and the Middle East said that Indonesia has become one of the company’s major markets in the Asia-Pacific region.

“We are very optimistic that we will attract a bigger market in Indonesia because people here like entertainment, many are starting to earn higher incomes, and the television industry is still extremely strong within Indonesian households,” he said in an interview with The Jakarta Post during his recent visit to Jakarta.

Below are excerpts from the interview where he offers his insights on Indonesia’s pay-TV market and his own company’s expanding growth in the country.

Question: How do you see the business prospects for content providers like Fox in Indonesia?

Answer: We are investing in our business in every market in the Asia-Pacific and Middle East regions, but clearly Indonesia is a high priority — along with India — because both of you are similar in terms of size and population, plus there is an appetite for television from [Indonesian] households, and you have creative people.

Of course, our business has suffered somewhat due to the global economic crises, especially in 2008. There may be bad times in one or two countries, but good times may happen in other countries. To be honest, we have not as yet made a lot of money but we still invest because there are a lot of promise in the industry. Also, advertising has become more recognized; ad firms are developing, and so are the pay-TV operators.

Have you found an increased demand among Indonesians for Fox International Channel’s programs year-on-year?

Yes, I have. Masterchef, Junior Masterchef, Glee, FOX and Star World are among the top channels and programs that are watched by Indonesians. It is quite encouraging. Our dramas and talent shows like American Idol are very popular here.

People are responding positively, of course, and it is a great market. There seems to be a growing demand from people within the upper income bracket and those with better educations; they are becoming accustomed to having more choices of high quality entertainment. People are now buying flat TVs and they love watching channels that broadcast Hollywood movies with High Definition [HD]. Fourteen of our brands are available in HD and now they are becoming more popular in Malaysia, Hong Kong and Vietnam.

There is a trickle down effect too, where people who are on middle incomes want to be like their higher earning counterparts; and now they can watch the same [FOX] programs because pay-TV operators have started to launch more economical packages to lure the middle class.

I think 1.5 million households in Indonesia currently watch our channels.

How do you compete with the regular TV, movies and piracy?

Well, we are trying to fight all three, especially piracy, which with the benefit of speedy broadband internet connections, can now make videos available online. That is a big challenge, but there are a lot of ways to try and combat this trend.

We work with national governments — for instance in China — to block some websites, which show a lot of movies. Here too in Indonesia, you cannot access certain websites because the government has blocked them.

We also employ local experts to analyze and assess the local markets to support our marketing activities and affiliate sales. In order to give ourselves the competitive edge, we always aim to get our products out into the market as quickly as possible, making sure that they are promoted very well.

Soon, viewers in Indonesia will be receiving more shows that have just recently been launched in the United States, such as Terra Nova and New Girl, which stars Zooey Deschanel.

And, to make it more accessible to Indonesians, we have dubbed some of our programs, such as those broadcast on Nat Geo Wild, into the Indonesian language.

What kind of content still needs to be added?

We will probably provide more varied local content, which is an area in which we would like to increase investment. Perhaps we could set up an Indonesian movie channel to show Indonesian movies made during the last five to 10 years; we could put them together, or perhaps collaborate with partners. Or maybe there could be a TV series channel devoted to playing people’s favorite TV series.

There’s also music. We have Channel V with international content but, at the same time, we have local Channel V brands that mostly show local videos, such as Channel V Thailand, India, Taiwan and the Philippines.

We have been progressing well in developing our international content and we must keep improving. But, we have to keep investing in the local content industry as well, and focus more on Indonesians themselves. (nfo)

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