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Jakarta Post

Netflix contributed to Indonesia’s slow economic growth, BPS says. Here’s how

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Thu, November 7, 2019   /   06:17 pm
Netflix contributed to Indonesia’s slow economic growth, BPS says. Here’s how Web streaming, media, TV, video service technology concept. (Shutterstock/Oleksiy Mark)

Online streaming services such as US-based Netflix and Malaysia-based Iflix are contributing to the country’s sluggish economic growth as investment in intellectual property comes under pressure, Statistics Indonesia (BPS) has warned.

BPS balance and statistics analysis deputy head Sri Soelistyowati said that weakening investment growth of 4.21 percent in the third quarter, the lowest level in three years, had dragged down economic growth to a two-year low level of 5.02 percent.

One of the main factors for the weak investment figures was declining investment in intellectual property, she added. Investment in intellectual property contracted by 4.14 percent in the third quarter compared with 1.48 percent growth in the same period last year, BPS data show.

“A reduction in intellectual products was due to a rise in streaming services [such as Netflix and Iflix] as there was a 45 percent decline in films that were processed by the censor,” Sri said during a media workshop in Jakarta on Thursday. Music streaming Spotify was not specifically called out although it is part of the broader streaming services, the content of which is not processed by the censor.

Sri said that the BPS included censored films as one component of assessing intellectual property investment as the institution had yet to include streaming services in its calculations. 

“There was a significant decrease in films that were processed by the censor, while those that were not processed by the censor increased. This has led to an intellectual property investment contraction,” she added.

The BPS is planning to monitor digital transactions whether in e-commerce or streaming services next year, Sri said.

Investment, which accounted for more than a third of the gross domestic product (GDP), only contributed 1.38 percent points (ppt) to the overall GDP growth rate of 5.02 percent in the third quarter, falling from 2.24 ppt during the same period last year.