Indonesia- The Way Forward

17 Mar 2017

Indonesia

The Way Forward
By Lunita S V Mendoza

night-tv


With an end-to-end ecosystem backed by global conglomerate Lippo Group, First Media, a subsidiary under Lippo’s technology media and telecommunications arm, and Indonesia’s first provider of integrated telecommunications and multimedia services, is bent on taking a big slice of the lucrative Indonesian pie. 

And it’s a big pie, seeing how smartphone usage in Indonesia is predicted to skyrocket from 55 million in 2015 to 92 million in 2019 and multi-screen users in the country are registering over 23% more media time than their counterparts in APAC.

With China and India over scrutinized and discussed to death, the new star in 2017 is the world’s fourth largest country, population-wise.  With over 263 million people, or 3.5% of the global population, 54.7 % of its population is urban and the median age in Indonesia is 28.6 years. 

This tri-factor component sounds like a scripted La La Land production to number hungry aggregators and media moguls. But the stars have indeed aligned, and much like India and China, once cast aside as third-world threats to the global balance, the speed of adoption and consumption of content has left the likes of Reed Hastings reeling in the alleys of Delhi. 






Indonesia – A Large & Exciting Developing TMT Market

indo-link-net

Indonesia is a large and attractive cable market with faster growth in larger cities
(a) Y/E Dec 2015, Source: 2016 Media Partners Asia (e) Growth from 2010 to 2030, Source: McKinsey Global Institute 
(b) 2014 – 19 CAGR, Source: 2015 Media Partners Asia and BMI (f) Based on 2010, Source: McKinsey Global Institute
(c) Population Ranking 2015, Source: World Bank (g) By 2030, Source: McKinsey Global Institute
(d) Based on 2013, Source: Nielsen (h) 2016-21 CAGR, Source: 2016 Media Partners Asia
Source: World Bank, Media Partners Asia, McKinsey Global Institute


Local Players Take First Dips

And just like China Radio & TV or China Telecom or BesTV in China, and Hotstar or Star TV or Zee in India, local Indonesian players like MNC or Telkom Indonesia or Lippo Group’s subsidiary will take what’s theirs, and then decide who to partner with for best business sense. 

PT Link Net Tbk. (First Media) has been strutting their stuff more recently with some significant highlights in 2016. The fact that its Chief Technology Officer, Desmond Poon, sees boundless opportunities in current challenges, infrastructure-wise, reflects exciting times ahead. Desmond spoke about its strength, as both an Internet and TV service provider, being the ability to offer a suite of converged services, adding more richness into the traditional linear TV. An example is the extension of viewing with its First Media X TV Anywhere OTT service that can be consumed on any mobile device.

desmond-poon

Desmond Poon
CTO
PT Link Net Tbk. (First Media)

Growth Stimuli via Content

In Jakarta last year, Desmond noted the stiff competition populating the landscape in Indonesia with numerous OTT video services such as Iflix, Netflix, Viu, Orange TV and Tribe. Desmond believes that operators have to be quick to spot current trends, understand and analyse consumers’ viewing habits and device preferences, in order to stay ahead and achieve multi – platform success. 

Speaking to iNSiGHTS magazine recently, Desmond and colleague Meena K Adnani, Content & Marketing Director for PT. Link Net Tbk (First Media) stressed that they believe in net neutrality – despite Ajit Pai’s thinking – and hopes to form relationships with the likes of Netflix and iFlix, as “the Discoverys and HBOs are not enough”.


meena-kumari-adnani

Meena K Adnani
Content & Marketing Director
PT. Link Net Tbk (First Media)

This will complement its own gratuitous OTT offering to subscribers as “the more choices we provide, the better it will be for our subscribers,” noted Meena, who also mentioned the provision of their own linear channels through cable, and the recent re-launch of their OTT service, which offers linear, catch-up and on-demand content.

This expansion also means that talks with partners have magnified from content rights to rights over various platforms to content for non-authenticated customers. This, in addition to its own in house production company, First Media Production that produces content for its 20 in-house channels, including Foodie, Hi, Dangdutz and other non news channels. “We also produce content for other companies within and outside the group,” Meena explained. Its news content is produced by Berita Satu Media Holdings. 

What Works Right Now?

During iNSiGHTS magazine’s interview, Meena mentioned that mobile network in the country is “not very stable right now”. This means that this instability has given rise to the appeal of short-form content. Could this be the way forward for now? Is there a window of opportunity before advancement is complete? Or will short attention span and the search for lost time evolve this trend into a norm? 

While Chad Mumm, vice president of Vox Entertainment, noted mid last year that “longer episodes are what people want to watch”, amidst rhetoric that more over-the-top networks are seeking traditional TV content, different markets may view another’s meat as poison (or maybe meat not done quite right for subjective inclination).

Against Vox Entertainment’s vision and business strategy, infrastructure and millennial minds may change the value of short form. Then again, with Mr Hastings being extremely fervent about watching 25 hours of viewing with 1GB of data and perhaps even 100 kilobits in the near future, it’s anyone’s game.

And so we keep the tech boys close, wondering if the golden years of ICT will return and run the show.

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