This is actually only the tip of the iceberg concerning the Indonesian broadcast industry that requires massive reforms.

For those who are still watching Indonesian TV stations, the declining quality in some of the programs is quite appalling. They offer little or no value to their audience, a stark contrast to the time of our upbringing in the 1990s when broadcasters had a clear comparative advantage. RCTI, for example, had a clear selling point for their popular content in music and sports programs, SCTV in news, TPI in education and TVRI for general programs.

The quality of current programs leaves a lot to be desired. Many have become entirely exclusive, covering a handful of particular celebrities. We easily notice that stars like Raffi Ahmad, Jessica Iskandar, Ayu Ting Ting and Ruben Onsu are somewhat omnipresent as if Indonesia is short of artists to be featured.

Raffi alone might occupy a hefty 120 minutes on one national channel (Trans TV). In a random reality show, we might watch Raffi and Billy Syahputra chit-chatting on nonsense topics. Nia Ramadhani also happens to anchor a talk-show about “how beautiful her life is with her squads” entailing zero possibility of any lesson for the general public to learn from. We cannot blame the aforementioned celebrities, but the broadcasters for their lack of sensibility.

The second problem concerns the type of programs. Many are simply lifted from YouTube. Trans TV group is very keen on producing these types of programs sometimes with only a small text stating “courtesy: YouTube”. They just dub into Indonesian to grab a greater audience. Cheap products indeed.

Last but not least, broadcasters screening a variety of imported programs excessively. ANTV is a good example: They intemperately show Indian programs right from early morning until late evening, starting from cartoon movie Shiva and several soap operas afterward.

The broadcasters seem to have really mastered the way to make money targeting, especially, viewers at the bottom of the pyramid, who will watch whatever is transmitted to their televisions at home. This audience segment may not have many options like those who subscribe to cable TV, Netflix or fast internet broadband connections offering a variety of programs on demand.

Globally, broadcasting is still a lucrative market. Bloomberg Intelligence reported that in 2019, the global ad revenue from television amounted to US$119 billion. Although the revenue will drop due to the greater internet penetration rate, it will remain at around $100 billion by 2023.

More specifically, the TV broadcasters are currently enjoying a roughly $40 billion market in the Asia Pacific, higher than in Europe ($31 billion) and Latin America ($15 billion). What is the overlooked problem when we do not have decent quality TV programs?

We often forget that television broadcasters transmit via the radio-spectrum. Other services like mobile telephony, public safety, satellites, also contend for more spectrum. Therefore, a unit frequency of spectrum used for broadcasting has an opportunity cost — a counterfactual benefit that would be missed if the spectrum was allocated for another second-best alternative, in this case mobile telephony.

The service providers such as broadcasters or mobile operators use particular bands of the spectrum. For example, FM radio broadcasters use bands in the 87-100 megahertz zone, while mobile services use bands in the 900 MHz or 1800 MHz zone. These operators are given a specific band under the premise that they will ensure the best use of that specific band. The regulators design directives to ensure this by comparing the economic and social benefits of alternative uses.

Not all spectrum bands are similar. There is a tradeoff between capacity and coverage. Lower frequency bands (such as 100 MHz) can cover a larger area broadcasting from one antenna. While higher frequency bands (such as 1800 MHz) need many antennae to cover the same area. On the contrary, higher spectrum bands have more capacity than lower bands, meaning they can pack more data per unit. Hence to ensure both coverage and capacity, operators prefer to have bands in different frequency zones.

Ensuring coverage is the first and foremost goal. Hence, the bands such as 470-585 MHz, 586-610 MHz and 610-890 MHz, which are currently being used by broadcasters are coveted by mobile operators. Many countries have made this transition possible. With 5G on the horizon and increasing data usage per capita, Indonesian regulators will be required to free up a vast amount of these spectrums.

Moreover, as mobile broadband is becoming more cost-effective than fixed-line broadband, coverage in spectrum bands will also become precious. Consequently, if national television broadcasters give up on producing good quality programs, the regulatory authority can just withdraw their license and free-up a large amount of spectrum as a digital dividend.

Simon Forge and Erik Bohlin conducted in 2008 a comparative cost-benefit analysis for the European Commission on alternative uses of spectrum bands, in case the transformation from analog to digital TV would leave a chunk of freed-up frequency. They simulated two alternative scenarios comparing the mobile industry and broadcasting.

The results gave a much higher edge to the first scenario. The economic output per MHz at 900 MHz band was estimated at 160 million euro ($179 million) for the mobile scenario and only 28 million euro for broadcasting. This impact was also accompanied by 2.3 million jobs created based on the mobile scenario against 1.8 million from broadcasting.

Needless to say, this study should not be taken for granted since Europe and Indonesia have very different information and communication technology ecosystems. The social benefit of broadcasters needs to be measured too, especially in an archipelagic country like Indonesia.

On the other side of the coin, realizing that there are still areas in Indonesia where people find it difficult to find mobile coverage, allocating additional spectrum for mobile use is essential to ensure digital inclusion and to embrace new technologies such as 5G.

To conclude, the Indonesian broadcasters really need to value their services as for every cheap and nonsensical program they air, there is an alternative use of spectrum that might generate greater benefits for the public at large.

____________________

Ibrahim Kholilul Rohman lectures digital economics at the Faculty of Economics and Business, University of Indonesia. Moinul Zaber is an associate professor at the Department of Computer Science and Engineering at the University of Dhaka.

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