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View all search resultsTelevision stations run by politically connected media tycoons control more than 70 percent of audience share, cementing the widely circulated assumption that politics is not always bad for business
elevision stations run by politically connected media tycoons control more than 70 percent of audience share, cementing the widely circulated assumption that politics is not always bad for business.
Moving on: Transmission vans operated by TVOne and MetroTV are parked inside the House of Representatives’ building in Jakarta on Dec. 2. Politicians are now attempting to get the media on their side, either by forging alliances with media owners or establishing their own networks. JP/Jerry Adiguna
The big fish in the media industry is undoubtedly the MNC Group, controlled by Hary Tanoesoedibjo, chairman of Nasdem Party’s board of experts.
The group’s portfolio includes television stations RCTI, MNC TV and Global TV, with the first two being founded by the family of former president Soeharto.
With 34.7 percent of audience share as of September, according to consultancy firm AC Nielsen, the three stations, under the management of publicly listed PT Media Nusantara Citra, recorded a combined total of Rp 730 billion (US$81 million) in net profit last year, up by 89.1 percent from Rp 386 billion in 2009.
The company earned 83.3 percent of its Rp 4.86 trillion total revenue last year from advertisement.
In terms of audience share, CT Corp.’s Trans TV and Trans7 stations came second, with an accumulated 24.7 percent of audience share.
Because the stations are not managed by a publicly listed company, their revenues and profits remained unclear.
Although CT Corp. owner Chairul Tanjung has yet to openly declare any alliance with a political party, he is known widely as among President Susilo Bambang Yudhoyono’s close associates and golfing buddy.
Chairul, who is the chairman of the President’s National Economic Committee, also has close ties to the Islamic-based Justice and Prosperous Justice Party (PKS).
Chairul recently acquired Detik.com, the country’s biggest news portal, for around $60 million, a tempting offer for the portal, which last year returned Rp 20 billion in net profit.
The takeover of the 13-year-old portal is perhaps more than just a regular corporate action based on a profit and loss calculation, as there have been allegations of it being a politically motivated move.
Detik.com is among those media outlets known for their sharp criticism of the Yudhoyono administration.
One of Chairul’s lieutenants, Ishadi SK, who is also a commissioner for Trans Corpora (CT Corp’s unit for the mass media, lifestyle and entertainment), denied any political motives. He said the acquisition was purely aimed at expanding Chairul’s businesses.
According to Ishadi, Detik.com will soon offer an integrated business and financial service for the customers of Para Group’s bank, insurance, financing and investment companies, while at the same time functioning as an outlet for market television materials produced by Trans TV and Trans7.
“In the long run, the portal will focus on entertainment programs, while news will account for a lesser share,” said Ishadi.
Although there have been no comprehensive reports to estimate online advertising revenue, it currently makes up some 1 percent of total advertising expenditure, according to Erick Thohir, president director of PT Visi Media Asia (Viva), a media business group owned by the Bakrie family.
“But the potential growth is huge and could reach up to 300 percent in the near future,” he said.
Local advertising spending increased by 20 percent in the first quarter of 2011, jumping to Rp 15.6 trillion ($1.82 billion) from Rp 13.04 trillion in the same period last year, according to a Nielsen survey.
Television was still taking the lion’s share of advertising, reaping 62 percent of total spending, while newspapers were receiving 35 percent and magazines and tabloids 3 percent.
Growth in advertising expenditure is expected to be around 20 percent next year, according to industry players.
The Bakrie family has recently sold some of its shares in Viva through an initial public offering (IPO), generating around Rp 500 billion for expansion. The family’s chief patron, Aburizal Bakrie, is chairman of the Golkar Party and a 2014 presidential hopeful. Viva is a holding company for news broadcaster TVOne, lifestyle and sports station ANTV and news portal vivanews.com.
Combined, TVOne and ANTV account for around a 10.8 percent audience share.
During the first five months of 2011, the company’s revenue increased by 22.7 percent from Rp 312.8 billion to Rp 383.8 billion. Income from advertisements on ANTV and TVOne contributed most to the increase.
Another prominent player in the industry is Media Group, which owns Metro TV news television and the Media Indonesia daily newspaper. Media owner, Surya Paloh, is the founder and financier of the mass organization National Democrats, which is behind the birth of NasDem Party. Metro TV steadily controls some 2.5 percent of audience share.
Metro TV news director Suryopratomo denied the station’s relatively low rating was triggered by its move to continuously air the political activities of both Surya and the National Democrats.
Two other major television stations, Surya Citra Media (SCTV) and Indosiar, which have audience shares of 14.9 and 9 percent respectively, have so far detached themselves from any links with politics.
Publicly listed PT Elang Mahkota Teknologi, which manages SCTV and O-Channel lifestyle station, recently controlled the Salim Group’s publicly listed PT Indosiar Karya Mandiri, which owns Indosiar. Elang Mahkota is controlled by the Sariaatmadja family, whose flagship business includes the Emtek Group, which also controls plantation company PT London Sumatra Plantation.
SCTV earned Rp 1.93 trillion in net advertising revenue last year, up by 19.9 percent from Rp 1.61 trillion in 2009. Its net profit jumped by 85.7 percent to Rp 530.1 billion from Rp 285.5 billion.
Indosiar recorded Rp 749 billion in revenue in 2010, down by 12.2 percent from Rp 853.3 billion in 2009. Its net profit declined by 2.5 percent to Rp 8.3 billion from Rp 8.51 billion in 2009.
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