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| Rudy Tanoesoedibjo President director Indovision |
Partha Kabi Managing director ZenithOptimedia |
Ishadi SK Chairman Trans TV |
Don Bosco Salamun Commissioner IBC |
YES |
NO |
NO |
YES |
| “Indonesia has 55 million households and of this, about 20 to 25 per cent can afford to pay US$15 per month and above for home entertainment. This will continue to increase. The number of actual pay-TV subscribers is still very small - less than one million out of a potential of 12 million - but is also increasing. Indovision’s subscription has grown from 40,000 when we first acquired the company in 2004, to the current figure of 500,000. Most new subscribers have come in the past two years. We are now looking at 25,000 to 30,000 new subscribers every month. Since Astro pulled out, we have been getting 2,000 signing up each day. That said, the market is still very difficult. Indonesia operates in a very different environment to other countries. In Malaysia, for example, the general perception is that terrestrial TV is not very good, so pay-TV is popular. However, in Indonesia, the population is very happy with free-to-air TV. People think they can get all the entertainment they want without paying. But once they have pay-TV, they cannot live without it. Education, therefore, is very important.” |
“Initially, when pay-TV came to Indonesia the two main barriers to its growth were cost and inadequate comprehension of English. People had to buy their own set-top box or dish antenna and pay high monthly fees. Gradually, the first barrier seems to be coming down as operators are providing free set-top boxes and have reduced the fees. The second barrier still exists and this is not going to change soon. Most of the channels provided by pay-TV operators are in English and the language comprehension in Indonesia will not change much in the next few years. Moreover, the programming of free terrestrial channels is very popular. A Nielsen report once showed that people treat cable or satellite connections as a status symbol but prefer to watch local networks like SCTV, RCTI or ANTV. Most pay-TV operators in the country claim a growth in the number of subscribers but it has been quite slow. The next year could further slow down the growth in this segment since this is a luxury item.” |
“I think price and infrastructure are two huge barriers for the uptake of pay-TV. Indonesia has a population of 240 million people, but if even one million take pay-TV the subscription fees can do down drastically. In terms of infrastructure we still have to develop good fibre-optic connections. In Indonesia the houses are spread out in most cities, unlike some cosmopolitan cities in other countries where apartments are clustered together. However, once these two issues are resolved I don’t see anything stopping the expansion of the pay-TV segment. The local channels here also keep people sufficiently entertained and they compete with pay-TV. Even though the content of pay-TV is strong there are language issues. However, young people in Indonesia want to watch pay-TV channels since their orientation is quite Western. They want to watch content offered by MTV and CNN, which local channels cannot offer.” |
“I am very optimistic about the future of pay-TV. The segment is growing fast and in the next five years I see it gaining five to seven per cent market share. We have already seen the launch of a new player, Aora, this year. Five more players in Indonesia have preliminary pay-TV licences, from which two including Media Commerce and OK Vision are launching their services next year. Indonesia is also going to trial digital terrestrial pay-TV next year in January. Our main problem in Indonesia is prices. However, digital terrestrial pay-TV is likely to reduce the cost by 50 per cent and we are expecting a good response to it. The other barrier is our infrastructure. Both satellite and cable TV require good infrastructure to operate and it takes time to develop. Then we also have serious piracy issues. About 700, 000 people are estimated to be illegally watching pay-TV content. These people could be persuaded to pay a subscription fee if it ranges between US$5 and $10.” |
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