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Jakarta Post

'€˜Dangdut'€™ saves Elang Mahkota'€™s business in Indosiar

  • Tassia Sipahutar

    The Jakarta Post

  /   Wed, June 4, 2014   /  12:25 pm

One of the country'€™s most popular musical genres, dangdut has quenched Indosiar TV station'€™s thirst for glory as dangdut-related reality shows gain success among its audience.

According to Elang Mahkota Teknologi (EMTK) president director Sutanto Hartono, the focus on dangdut is part of the company'€™s strategy to revive its subsidiary Indosiar Visual Mandiri.

'€œBusiness was slow for Indosiar,'€ he said on Tuesday. '€œBut we then found out that dangdut has a special place in the hearts of the station'€™s urban-rural audience. So we decided to promote dangdut shows, as well as other reality programs. It'€™s working,'€ he added.

The shift to reality or non-drama programs is also part of Elang Mahkota'€™s strategy to curb ballooning costs at Indosiar.

'€œDramas are expensive to produce and are not Indosiar'€™s strong point,'€ Sutanto said.

'€œBy shifting to non-drama, we'€™ve been able to reduce Indosiar'€™s production costs by an average of 20 to 25 percent,'€ he added.

Elang Mahkota '€” a publicly listed media holding that manages Indosiar, SCTV and O Channel TV stations '€” hopes the strategy will boost Indosiar to the third position in the television business from its current position of fourth.

Sutanto pointed to the success of Yuk Keep Smile '€” a variety show aired by Trans TV '€” as one of the reasons behind Indosiar'€™s recent position slip.

While Indosiar received a '€œmakeover'€, SCTV remained loyal to its audience by broadcasting sinetron or soap operas and made-for-TV movies or FTVs.

However, a slight change had taken place in their themes, with comedies now more popular than tear-jerking dramas, according to Sutanto.

Elang Mahkota, he added, was upbeat that SCTV would be able to maintain its dominance in the market, staying on top of the TV business pyramid.

The company is now preparing to see its revenues increase by around 50 to 70 percent on a quarterly basis as the fasting month and Idul Fitri approach.

When Idul Fitri fell in August last year, Elang Mahkota saw its revenues from its media segment rise by more than half in the third quarter from the previous quarter, boosted by robust advertisements.

'€œAds usually start to pour in one week before the fasting period begins,'€ he said.

This year'€™s fasting period is predicted to commence on June 28.

Elang Mahkota'€™s first quarter results show that the media segment generated Rp 1.09 trillion (US$93.70 million) in revenue between January and March.

The figure was equal to 73 percent of its total revenue, which amounted to Rp 1.5 trillion.

The remaining contributions of 25.2 percent and 1.8 percent were from its IT solutions business and other businesses, respectively.

Meanwhile, Elang Mahkota is planning to diversify its business this year by expanding into digital activities.

Sutanto said it was assessing several options that involved the establishment of its own electronic commerce channel.

'€œWe may start the e-commerce business from scratch or we may acquire existing channels. No decision has been made, but we already have sufficient funds to finance the plan,'€ he said, citing Elang Mahkota'€™s strong cash position.

By March, it reportedly had Rp 4.94 trillion of cash and cash equivalents.

Sutanto added that it might also expand further into hospital management after it acquired Husada Insani Hospital in Tangerang, Banten, last year.

'€œWe are evaluating between three and four hospitals right now to explore the business opportunities,'€
he said.

The company'€™s shares (EMTK)traded on the Indonesia Stock Exchange (IDX) at Rp 5,725 apiece on Tuesday, up 0.4 percent from a day before.

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