Digital Indonesia

By CASBAA in Technology 0 Comment

(Photo by: The Diary of a Hotel Addict)

Sushant Sharma

Accedo

Business Development Manager

 Indonesia, South East Asia’s largest economy, a member of the G-20 and the world’s 4th most populous nation, has been a big contributor to Asia, the center of attention and a growth engine of world economy. Corporations, big and small, foreign and domestic, look to Indonesia as an attractive and lucrative market in the region. However, Indonesia, without doubt, is in throes of change — politically, socially, economically and also digitally! The country boasts over 100% mobile penetration (280Mn mobile phones in a population of 250Mn) with Smartphones accounting for 23% of all mobile phones. Internet users, currently at 70Mn, are expected to reach an astounding 145Mn by 2015.The two biggest digital stories in the country are Social and Mobile. Social media is growing at a frantic pace with Indonesia the 4th largest country in terms of Facebook members. Indonesia is one of the very few markets where social networks, other than Facebook and Twitter, are gaining rapid adoption. Mig33 and Path are two such platforms, underlining the fact that companies can ill afford to ignore social media as an important means to connect with their consumers.Mobile, on the other hand, has emerged as the single largest instrument connecting Indonesians. According to Mobile Marketing Association, 49% of Indonesian Mobile Internet users consume videos, which is only second to the 70% of users downloading games and App. Music isn’t far behind, where 44% of users consume it on the mobile devices. “Affordable” smartphones are further changing the landscape of usage and consumer behavior, enabling a wider range of demographics and income groups to connect and access social networks, content, apps and so on. Along with Xiaomi and other consumer electronics makers, Mozilla, developer of the popular Firefox web browser, is also planning to bring a $25 smartphone to the market.Amidst all the optimism around economic growth and a  burgeoning middle class with disposable income, the uptake of pay TV has been sluggish. In its two decade long history, pay-TV penetration has only reached a meager 3% and  the primary reasons have been the availability of locally relevant content on FTA channels and rampant piracy. The Indonesian Cable TV Association claims that there are around 2,500 operators throughout the country illegally rebroadcasting pay-TV channels.Other industry participants concur that piracy has been the bane of the industry. “Piracy, for one, is a bigger issue than it’s historically been for pay TV. Low video CPMs is another issue but it should improve as piracy falls due to content protection measures which will give way to more confidence for brand managers”, opines Unmish Parthasarathi, who is driving NewsCorp’s BallBall service, a pure OTT content business in Indonesia and other emerging countries in the region.According to a survey by Irdeto, among 1,600 adults in Australia, India, Indonesia and Singapore, 37% of the respondents mentioned a lack of content availability through legal means as their top reason for consuming pirated content. Mentioned by 36% respondents in Indonesia, concerns over price is cited as the second most significant factor behind rampant piracy. “Sachet pricing is key as a low barrier to entry gives content the best chance of being tried/tested/tasted by a large segment. But we need to quickly move beyond low/competitive pricing to garner an audience and differentiate by always looking to deepen the localization”, says Unmish, based on his experiences in striving to monetize the service in the country.Other industry leaders share similar sentiments. Roy Simangunsong, CEO at PT LinkTone, a MNC Group company, added, “Digital has rarely been monetized except in the form of content marketing for the advertisers. Subscription based video content is in the early stage but has huge potential with the right content and pricing for consumers. In digital, most of the monetization is in the form of digital advertising.”Indonesian consumers cite poor quality of pirated videos as one of the main deterrents to content piracy. Innovation in payment mechanisms, such as Phone credits, will make it easier for consumers to purchase content and is another area expected to work to the benefit of the industry.

There are, without doubt, several challenges to overcome to make digital a sustainable and economically viable means for the media and entertainment industry. Nevertheless, industry players see immense potential and are increasingly willing to take a bet on the potential of digital adoption in Indonesia as a means to reach a wider audience and garner more eyeballs.

“Internet penetration reaching 35% will be the tipping point for the industry and then we will see an explosion of many business models and revenue streams,” predicts Roy, emphasizing that improvements in infrastructure will unleash the real potential of the Indonesian market.

 

People Power, Political Will

By CASBAA in Political 0 Comment
shoggy

Saugato Banerjee

A+E Networks

Vice President – Strategy and Operations, Asia Pacific

 

nick-binns

Anna Mathew

STAR India

Corporate Team

 Elections are a defining part of the modern political and economic structures in most parts of the world. In the Asia-Pacific region, 2014 is a crucial year with 3 important territories choosing their political destinies in the coming months: Indonesia, Thailand and India.A broadcast and content industry blog is certainly not the place for debating the direction and merits of each country’s policy. But the role of media, the policies surrounding ownership, creation and dissemination of content has a deep impact on the fortunes of our industry.  Added to that, the boom in Internet penetration and bandwidth availability positions the entire ecosystem on the brink of profound changes, from piracy to transaction led entertainment consumption. None of which can be de-linked from the economic outlook that determines the future of over 1.6 billion people, roughly just over 1 in every 5 human beings on this planet.There are common threads to these countries. They have all been dubbed economic miracles; they have all fallen out of favor at various points in time.  No one disagrees on the potential that comes with the weight of population driven domestic demand, richness in natural resources, the unlocking of local entrepreneurship spirits and the overall move towards more free-market policies. Equally, perhaps everyone disagrees on the ‘populist’ streak that characterizes decision-making in most large democracies when it comes to various subsidies, entitlement programs and protectionist policies. What may be bad economics and populism on one side of the prism may simply be empowerment and political necessity on the other side.All of this is of course being discussed against the mutual backdrop of a global economic scenario that is interlinked like never before. It has been 6 years since the financial crisis first came knocking with a battering ram. The bulge of fiscal stimuli, 50 shades of Green aka shoots of recovery, the roller coasters of manufacturing indices, ‘now we spend, now we don’t’ demand in the developed economies; we seem to be caught in a spin cycle of alternating optimism and pessimism. Ironically, the broadcast and content industry has mostly had a good ride through all of this. The health of most businesses, the increased localization of content and advertising spending decisions, the size and gamut of risk-taking seem to reflect an eco-system that is sure-footed, maturing and increasingly confident that these countries will be in a position to emerge stronger and move on to the next level of growth in the next 5 year period. So where do the challenges lie? And what is required?

 

India: Boom underneath the gloom?

Much has been written about an economy that was poised to make the next big leap and then proceeds to develop a fear of heights. But good monsoons, rural demand and entitlement programs have still kept the economy growing at 5% p.a. The interim budget pegged growth at 6% for the coming FY. The industry finally adopted digitalization, with all analogue subscribers to be converted to digital by December 2014. Deadlines may slip due to change in governments, but industry has reason to be optimistic about a measure that promises to finally unlock distribution value in the market. As more and more Indians move online, traditional content consumption habits will be tested. As will the regulatory environment around the deployment and monetization of such content.

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Note – The election schedule in India just been announced. More than 800 million voters will decide the outcome in a phased process in April and May, with results out on the 16th of May. Cue frenzy and ad spends on India’s numerous news channels. 

 

Indonesia: More the same, a bit faster?

There seems to be a feeling that the economic hiccups of 2013 are poised to go away this year. The consensus from experts points to the need to accelerate the pace of infrastructure development, investment in human capital and advancement in responses to natural disasters. For our industry, cable penetration continues to grow; new platforms continue to invest in growing penetration and broadcasters test new programming formats from slightly different countries. Elections and WC 2014 are likely to continue to drive growth in the short term, as Indonesia’s economy looks to overcome the depreciation in the rupiah.

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Thailand: A clear direction?

As we write this, the political stalemate is beginning to have a real effect on the economy. When everyone from the farmer to the business owner starts hurting, the fight for the future direction of the country is in danger of jeopardizing that very promising future. Competition in the content industry points to an era of prolonged growth, and the chaos has not come in the way of the prevailing excitement or bidding levels around the DTT licenses. But the immediate situation on the ground may prove to be the most important determining factor.

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Nick Binns, Group M adds:

The situation in Bangkok is slowly getting better. Thailand has a record of resilient ad spending despite political instability in the past. If the situation is backed to normal, we will see spending back on track quickly. Yesterday, the protest sites have been combined to just one site.

In term of ad spend; the spending in March is back to the normal level. World Cup in Q3 will maintain the momentum to the end of Q3.  However, there is possibility to have deep cut in Nov-Dec due to an economic slowdown.  Political unrest plays important factor. There could be a double-digit drop in media spending if the protests drag on to the second quarter.   

My view: Overall, minor impact of the protests but more deep-rooted economic uncertainty here, within a market that matured a lot earlier than the VIP ASEAN markets (VIP – Vietnam, Indonesia and Philippines)

 

The CASBAA 2020 Summary: The true outcome of an election lies not in the mandate it throws up, but in the decisions that are taken by those the people have empowered. As 3 of CASBAA’s most important markets decide their futures, the natural instinct of business is to renew optimism. There is hope that the political will of the elected leadership will continue to harness the potential of these economies and realize their abundant promise.