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Jakarta Post

‘Local content is king’: TV competitors MNCN, SCMA ink deal to co-produce films

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Thu, December 12, 2019   /   06:19 pm
‘Local content is king’: TV competitors MNCN, SCMA ink deal to co-produce films A woman looks at television sets displayed at a shopping center in Jakarta. (JP/Nurhayati)

Publicly listed media giants Media Nusantara Citra (MNCN) and Surya Citra Media (SCMA) announced Thursday a business partnership to co-produce films for their in-house streaming services to reduce production costs while boosting local content.

MNCN president director David Fernando Audy said the agreement would allow the two companies to reduce production costs by up to 50 percent for content such as sinetron (local soap opera) and movie theater films aired on each of the companies’ online streaming services. MNCN owns RCTI+ and SCMA carries the Vidio streaming service.

The agreement could also facilitate stronger cooperation in the form of a share swap and joint venture, he added.

“We know that content production is not cheap so we could cooperate in producing content,” David told journalists during a press briefing in Jakarta on Thursday, adding that both companies were open “to discussing further cooperation”.

David said MNCN aimed to increase the amount of local content due to rising demand, adding that lower demand for foreign content had led the company to reduce investment for such content.

“In a non-English-speaking country, the majority [of Indonesians] prefer local content over foreign content. This trend will continue in the future and, thus, we have set a target to provide 100 percent local content,” he said, adding that the demand for foreign content was only in soccer.

MNCN currently dominates Indonesia’s television industry with a 34.7 percent market share, followed by SCMA’s 31.2 percent, VIVA's 16 percent and Transmedia's 14.1 percent as per May, according to data analysis firm AC Nielsen.

SCMA president director Sutanto Hartono said during the same briefing that the collaboration was part of the companies’ effort to reduce costs and boost profits in the digital era.

“We know that profitability will come only from selected content because not every investment in content could generate profits […] as we are now also competing with [foreign streaming services] such as Netflix and Disney because they will target Indonesian content,” Sutanto said.

“Collaboration between MNCN and SCMA will make sense as local content is king in Indonesia. Joint investment in content could strengthen the local ecosystem.”

Shares in both MNCN and SCMA dropped more than 2 percent following the announcement, trading at Rp 1,485 and Rp 1,400 respectively. MNCN stock prices soared by more than double this year while SCMA’s stocks dropped 25 percent.