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The government is unlikely to press ahead with a proposal to
force TV stations with national coverage to merge as there are signs
that some of them are already on the verge of merging to boost
efficiency.
While hoping to see the number of national networks fall to between 5
and 6, the government would not issue any directive requiring TV firms
to merge in the foreseeable future, Information and Communications
Minister Sofyan Djalil says.
"At the moment, the government can only persuade and appeal to the
stations to merge. We have to leave it up to the market to decide as
there is already extreme competition in the industry that leaves each
station with less advertisements," Sofyan told reporters Monday.
Because of the tight competition, he added, most of the stations were
being forced to produce cheap, low-quality programs, such as soap
operas, supernatural shows, gossip shows and crime programs.
Gossip and supernatural shows were the most popular TV programs among
middle- and lower-income people throughout the country.
"If there were fewer TV stations, each of them would be able to secure
better advertising revenue. This would eventually enable them to
improve their programs," Sofyan said.
Most of the country's 11 national stations are experiencing falling
revenue and profits due to tight competition amid sluggish growth in
advertising expenditure.
The stations that broadcast nationally are RCTI, TPI, GlobalTV, ANTV,
TransTV, Lativi, TV7, Indosiar, Metro TV, SCTV, and state-owned TVRI.
An early indication of things to come took place last week, when Trans
Corp, the owner of TransTV, purchased a 49 percent stake in TV7 from
Kelompok Kompas Gramedia to form a strategic partnership between the
two firms.
The two companies have said the move is aimed at improving their
competitiveness vis-a-vis the country's other nine TV stations.
It has also been reported that the ailing Lativi is also seeking to
enter into a relationship with another station, with ANTV currently
seen as the prime suitor.
After seeing several downturns, ANTV is now one of the richest TV
stations after Rupert Murdoch's News Corp bought a some 20 percent
stake last year in PT Cakrawala Andalas Televisi, which runs the
station.
Sofyan said that Indosiar was also in the process of seeking to build a
relationship with another station.
"I think we will see more tie-ups, which will lead to mergers in the
near future. This is a good start," said Sofyan, adding that three TV
groups running 6 stations would likely emerge in the future.
Consolidation was also necessary to allow the national stations
establish local affiliates. Nearly every province in Indonesia has, or
will soon, set up their own TV station, with some of these broadcasting
in local languages.
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