Jakarta. Online on-demand streaming company Netflix's expansion to Indonesia may have captured the interests of young and tech-savvy Indonesians by storm, but it's still a long way before the service captures the mainstream audience in the way that it has in the US, critics argue.
The New York-listed company announced a surprise plan to expand its streaming services to more than 130 countries, including Indonesia, during the Consumer Electronic Show (CES) 2016 in Las Vegas, Nevada on Thursday. It's now offering three streaming packages in Indonesia with prices starting at Rp 109,000 ($7.82), according to its website.
"@jokoanwar KABAR GEMBIRA [(GREAT NEWS])!!!! NETFLIX now available everywhere including Indonesia!!" Joko Anwar tweeted on Wednesday.Although many Indonesians familiar with the on-demand streaming service flocked to social media platforms to express their excitement, including prominent local director and producer Joko Anwar, analysts say the service will likely see as slow adoption rate in Indonesia given the country's low Internet penetration rate, its loyalty for local brands and content piracy tendencies.
"I don't think majority of Indonesians will give up their TV [habits] just because of Netflix so we won't see advertisers jumping ship to [move] online. However, in the longer term, the viewing habits will definitely change and media companies will have to figure out how to adjust their programming and business models to the new viewing habits," Spike Choo, country director for market research firm Frost & Sullivan, told the Jakarta Globe on Thursday.
International Data Corporation (IDC) country manager Sudev Bangah echoed Choo's sentiments, pointing out the dominance of traditional pay TV as well as the dominating preference to watch sports and local programs in Indonesia.
"While Netflix will cater nicely to a more urbanized, younger population, it may not necessarily cater to the masses. Let’s also not forget the prevalence of piracy [in Indonesia], and how cheap or free it is to acquire your favorite movie or series quickly," Bangah added.
Regulatory uncertainty, for now
Despite the widespread news coverage of its latest expansion, little is currently known of the legal implications or how censorship will affect Netflix services in Indonesia. However, still, both Choo and Bangah said it is unlikely the government would ban or block the service in the face of rising demand from consumers.
"There’s really not much for the government to do in this scenario. The prevalence of tech startups in Indonesia and everywhere else just continues to showcase the borderless world we live in," Bangah said. "If anything, local competitors should ramp themselves up in the face of borderless competition rather than have any dependence on the government to help starve off foreign entrants."
Choo also noted that should the government find objectionable content on the streaming service, it will "just get existing internet service providers to include Netlifx URLs into existing internet filters."
When asked for comments on the expansion of Netflix into Indonesia, Noor Iza, the head of the sub-directorate for technology and e-business infrastructure at the Ministry of Communication and Information Technology, said he is "still learning of the issue" without elaborating further.
Netflix was founded in 1997 with headquarter in in Los Gatos, California, but it wasn't until 2007 that the company grabbed headlines as it delivered its billionth DVD in the United States. The on-demand streaming service was later often cited by media as one of the factors that led to the bankruptcy of video rental chain Blockbuster.
Its fast-growing user base subsequently brought concerns to television network providers who have been selling rights to the service, such as Time Warner and 21st Century Fox, as views and subscribers of such networks started shifting away from television.
The company has also garnered increasing attention from audiences outside of the United States in the past year, thanks to its in-house production team which has produced award-winning television series such as "House of Cards" and "Orange is The New Black."