Indonesia's young adults will soon decide on the future of the free-to-air television dominance in the country's video entertainment business, executives said at the Indonesia ICT Summit in Jakarta on Thursday (01/09). (JG Photo)

Millennials to Decide Future of TV in Indonesia


SEPTEMBER 02, 2016

Jakarta. Indonesia's young adults will soon decide on the future of the free-to-air television dominance in the country's video entertainment business, executives said at the Indonesia ICT Summit in Jakarta on Thursday (01/09).

A few months ago the country welcomed international video streaming services Netflix, Hooq and iflix, as faster broadband network and affordable data plans have allowed Indonesian customers to enjoy online the content that used to be available only from television broadcasters.

Al Greeny S. Dewayanti, commercial director at Mega Media Indonesia, the company behind pay television Orange TV and video-on-demand service Genflix, said millennials in big cities tend to shift from television broadcasters to over-the-top (OTT) services.

As of 2016, according to the Central Statistics Agency's estimations, Indonesian millennials  born between the 1980s and early 2000s  make up about 41 percent of the 258.8 million population.

"The future will be in OTT and many want to capture this market. The number of millennials is going to be big in Indonesia and infrastructure is now being prepared. The government has rolled out 4G and smartphone prices are getting lower each year," Greeny said.

Genflix offers its customers thousands of videos, Japanese cartoons and other exclusive content. Genflix currently has three million subscribers, 60 percent of whom are paying customers. Most of them access the service via their smartphones.

The catch

Hendy Lim from the Redemption Entertainment said this is the moment for the local talents and content creators as the content-hungry OTT services will keep on coming to tap into the growing Indonesian middle-class. But there is a catch.

Hendy, who has just left his position as the vice president of the media company MNC Group, said the OTT services need to compete with the deep-pocketed free-to-air televisions.

"These free-to-airs can pay up to $30,000 per episode. I can't tell the exact number, but I think [the OTT] can pay only 5 percent of it," he said, adding that free-to-air revenues are high because many people still watch television.

The on-demand services will also have to face uncertain regulations with regard to corporate establishment, taxes and censorship.

Communications and Information Technology Minister Rudiantara promised that this year the government will produce a regulation governing the OTT services. The regulation will take into account the international tax treaty and censorship measures similar to those applied for televisions.

Desmond Poon, chief technology officer of the listed internet service provider Link Net, said during the summit that censorship as such is against the idea of the internet.

Despite the challenges posed by censorship and the not yet fully available broadband connectivity, especially in the easternmost part of the country, Poon remains optimistic the OTT business will continue to grow.