MNC Media Chief Weighs in on TV, Digital in Indonesia


SINGAPORE: Free-to-air TV is set to remain the dominant platform in Indonesia, David Fernando Audy, CEO of MNC Media, said at ATF today, with a lack of broadband infrastructure hindering the rollout of online platforms.

As the head of MNC Media, a division of PT Media Nusantara Citra, Audy oversees four free-to-air TV channels, including the market-leading RCTI, pay-TV assets, the company’s digital businesses, its content production activities and a talent management agency. In Indonesia’s crowded FTA market, with a total of ten stations, MNC’s four channels have a market viewing share of 44 to 48 percent and an advertising share of 40 to 45 percent, Audy said. It produces 15,000 hours a year and has a library of 270,000 hours, “representing about 40 percent of the local content market.”

The way in which online viewing is changing television in other markets “has yet to come to Indonesia” Audy said, with FTA still the leading viewing and advertising platform. However, the country has the lowest rate card for TV spots compared with other markets in the region, with just $5,000 charged for a 30-second spot. “This represents future potential upside,” Audy noted. Nevertheless, “MNC is among the top media companies in Southeast Asia. We have the three and four positions after Astro and ABS-CBN.”

Positioning itself for future growth, Audy said MNC recently completed a $250 million investment in new infrastructure, with four new buildings and 48 new studios. “The aim is to enhance our content production capability, in quantity and quality. The new studios will be key to improving our onscreen quality and increase our production hours in the coming years.”

Audy then went on to discuss if, and how, the internet will disrupt the television industry in Indonesia. The country of 258 million people has 88 million internet users at present, of which 79 million are active social media users. There are 326 million mobile phones in use in the country, about half of which are smartphones. The majority of internet access in Indonesia is from smartphones. Mobiles will remain the dominant internet device for the next five years or so, he said.

The smartphone, however, is not being used yet for AVOD or SVOD streaming, with YouTube dominating internet video use.

“Content consumption is growing healthily in Indonesia,” Audy continued. “It’s the cheapest form of family entertainment. It’s free.”

Indonesians average five hours of TV viewing every day and three hours of internet use.

TV has a 65-percent share of the ad market at present, with online at about 11 percent. Over the next five years, TV’s share is expected to drop to about 62 percent while online will rise to about 19 percent—that gain will largely come out of print’s share, not television’s, Audy stated.

Digital platforms are hindered by the geographic challenges Indonesia presents in terms of broadband infrastructure rollouts. As such “monetization [of digital platforms] will not come anytime soon.”

Nevertheless, MNC is preparing itself for expected internet gains in Indonesia’s major cities. It has a successful second-screen app for RCTI that has fared well when combined with hit shows like Rising Star. Audy said that 40 percent of MNC’s digital revenues come from the RCTI app.