Millennials to Decide Future of TV in Indonesia
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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.
Questions & Answers
Q.What is the primary challenge faced by OTT services competing with free-to-air televisions in Indonesia?
What is the primary challenge faced by OTT services competing with free-to-air televisions in Indonesia?
OTT services struggle to match the high episode production costs of free-to-air broadcasters, who can pay up to $30,000 per episode. This financial disparity makes competition difficult given the continued popularity of traditional television viewing.
Q.What proportion of Indonesian millennials make up the country's total population?
What proportion of Indonesian millennials make up the country's total population?
As of 2016, Indonesian millennials constitute approximately 41 percent of the nation's 258.8 million people. This demographic group, born between the 1980s and early 2000s, is seen as crucial for the future of TV.
Q.What government action is expected to address the uncertain regulatory environment for OTT services?
What government action is expected to address the uncertain regulatory environment for OTT services?
The Communications and Information Technology Minister, Rudiantara, promised that the government would produce a new regulation this year. This regulation will govern OTT services, including aspects like international tax treaties and censorship measures.
Q.How do most Genflix subscribers access their service?
How do most Genflix subscribers access their service?
Most of Genflix's three million subscribers access the on-demand service via their smartphones. This highlights the importance of mobile technology for reaching its audience, 60 percent of whom are paying customers.