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To watch or not to watch: The power lies at your fingertips
Summer is here for cable and satellite-television platforms and their content providers to expand services in the untapped market of Indonesia
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ummer is here for cable and satellite-television platforms and their content providers to expand services in the untapped market of Indonesia.
With over 252.4 million people in about 64 million households, Indonesia has a TV penetration rate of about 75 percent across the archipelago and 95 percent in urban areas.
As of last year, the number of potential pay TV viewers increased to 13.5 percent of the population, compared to 12.8 percent in 2011. Most come from the middle-class bracket.
The managing director of Nielsen Audience Measurement Indonesia, Irawati Pratignyo, said that people whose average household spending ranged from Rp 900,000 (US$69.3) to Rp 2.5 million per month watched TV for around 4 hours 20 minutes each day, according to a survey conducted in 11 big cities.
The top 15 programs those surveyed watched were aired by free-to-air (FTA) television channels.
'Forty percent of the viewers are female and 41 percent are children,' Irawati said at a recent seminar titled 'Indonesia in View', organized by the Cable and Satellite Broadcasting Association of Asia (CASBAA).
Market penetration for the association's members was hovering at around 5 percent in Indonesia ' the lowest in the region.
Currently there are 91 pay-TV operators with permanent government licenses ' satellite, cable and terrestrial platforms that are mostly owned by 17 major players.
There are also 172 operators holding temporary licenses and 51 pending licenses.
Fierce competition is one of the reasons the industry is still struggling to increase its number of subscribers.
Businesses have complaints on the broad availability of conventional, free-to-air TV stations serving the public as well as ubiquitous unlicensed operators.
Aora TV president director and CEO Guntur S. Siboro said that the business faced many challenges besides finding the best strategy to get subscribers.
'Another challenge is the purchasing of content, which is 90 percent international. This alone costs a lot, not to mention the 13 percent depreciation from decoder provision and installation,' said Guntur, speaking on a panel discussion titled 'Development of the Indonesian Pay-TV Industry: Where Next?'
'The toughest competitors for a pay TV operator are FTA and the unlicensed operators that air pirated content.'
Agus Mulyanto, chairman of the Indonesian Association of Multimedia Providers (APMI) said that currently more than 2,000 illegal operators were retransmitting both domestic and international programming in small neighborhoods.
'Mostly, the illegal operators are using cable TV that they subscribe to from the legal operator. They redistribute the channels without broadcasting rights ' regardless of whether they are licensed or unlicensed operators.'
'It is a profitable business because nowadays we can buy the standard set-up decoders at low prices at any electronic store,' said Agus.
He lamented the absence of law enforcement, suggesting that government content providers tighten control of the illegal distribution of their programs.
Faisal Ershad, chairman of the Indonesia Cable TV Association (ICTA) ' previously known as Aptekindo ' said that members had a license to broadcast through direct-to-home (DTH) satellite services.
'We are trying to reduce illegal operators by encouraging them to form a consortium to pool capital ' or for the larger ones to acquire small players as their branch stations,' he said.
Faisal said that these small operators had proposed to the government to review the regulations so they could be on the same footing as the big players.
'We hope in the future we can have direct access to content providers for redistribution rights.'
However, Guntur said that more competition meant a thinner slice of the pie ' 'and the big players don't like it'.
MNC Sky Vision vice president director Handhi Kentjono said that the government limited the number of broadcasters to ensure fair competition.
'Content is still the prime factor. Broadcasters must air local and exclusive content to attain subscribers,' he said.
MNC Sky Vision, operator of first satellite pay TV Indovision since 1994, has run Top TV since 2008.
Another panelist, Supeno Lembang of newcomer Orange TV, said that content was crucial, especially for the viewers who were not into digital lifestyles.
'I often receive complaints from subscribers, especially in rural areas over the standard package, which they have no desire to watch. They prefer local content they can relate to. But then again, the attraction of pay TV is the liberty to switch channels. Pay TV gives the people the power of choosing.'
According to Irawati, content providers and service operators needed to provide more options to subscribers and to air local versions of international content.
It was precisely what global media rights company MP&Silva did in Indonesia through a partnership with beIN sports channel.
Its managing director for Asia Pacific, Beatrice Lee, said they localized content by inserting commentary in Indonesian on live soccer matches and set up local studio shows in Jakarta.
'I believe that sports programming is the main driver for pay TV. All our affiliates have managed to grow their subscribers up to 10 times on average since we got in since July 2013.'
Zee Entertainment country head for Indonesia Maria Liza Ginting was optimistic.
'Indonesians used to enjoy Bollywood movies back in the 1970s. It's easy to get viewers because Indians and Indonesians have similar cultures and traditions. It's like riding a bike ' despite the long absence. Indonesians need no time to get used to it again.'
She said the company, which provides around-the-clock Z Bioskop and Z Living for seven operators, had used social media for its marketing strategy since its presence early last year.
'There are many communities of fans on our Facebook account that we actively interact with. The number of fans reached over 40,000 viewers and counting and they are die-hard fans.'
In contrast to the localization of international content, American television executive Dalton Tanonaka, who spent most of his career in Asia, founded the country's first 24-hour all-English channel for global distribution, called The Indonesia Channel.
Starting operation in June 2014, the channel has The Best of Bali and Archipelago, which reveal rarely explored parts of Indonesia.
It also runs the Hot Indonesia talk show hosted by Tanonaka, Rahayu Saraswati and Yenny Wahid on the latest issues in an informative and entertaining way.
'The Indonesia Channel is on-air in Hong Kong, Singapore and the Netherlands,' Dalton said during a presentation at the event.
