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Who Owns the Broadcasting Television Network Business in Indonesia?

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Who Owns the Broadcasting Television Network Business in Indonesia? Network Intelligence Studies Volume VI, Issue 11 (1/2018) Rendra WIDYATAMA Károly Ihrig Doctoral School of Management and Business University of Debrecen, Hungary Communication Department University of Ahmad Dahlan, Indonesia Case WHO OWNS THE BROADCASTING Study TELEVISION NETWORK BUSINESS IN INDONESIA? Keywords Regulation, Parent TV Station, Private TV station, Business orientation, TV broadcasting network JEL Classification D22; L21; L51; L82 Abstract Broadcasting TV occupies a significant position in the community. Therefore, all the countries in the world give attention to TV broadcasting business. In Indonesia, the government requires TV stations to broadcast locally, except through networking. In this state, there are 763 private TV companies broadcasting free to air. Of these, some companies have many TV stations and build various broadcasting networks. In this article, the author reveals the substantial TV stations that control the market, based on literature studies. From the data analysis, there are 14 substantial free to network broadcast private TV broadcasters but owns by eight companies; these include the MNC Group, EMTEK, Viva Media Asia, CTCorp, Media Indonesia, Rajawali Corpora, and Indigo Multimedia. All TV stations are from Jakarta, which broadcasts in 22 to 32 Indonesian provinces. 11 Network Intelligence Studies Volume VI, Issue 11 (1/2018) METHODOLOGY INTRODUCTION The author uses the Broadcasting Act 32 of 2002 on In modern society, TV occupies a significant broadcasting and the Government Decree 50 of 2005 position. All shareholders have an interest in this on the implementation of free to air private TV as a medium. Governments have an interest in TV parameter of substantial TV network. According to because it has political effects (Sakr, 2012), while the regulation, the government requires local TV business people have an interest because they can stations to broadcast locally, except through the benefit from the TV business (Baumann and broadcasting network. In network broadcasting, the Hasenpusch, 2016). government sets two rules for private broadcasting In many countries, TV can contribute to a successful stations. First, "existing TV stations" may broadcast economy. The highest revenue in the world - in more than 75% of provinces, but in no more than achieved by the United States - is US$ 1.19 trillion 90%. Secondly, other stations in addition to (Woods & Poole Economics, 2015). In second place "existing TV stations" should not broadcast in more is China, with revenues of US$17.55 billion (PWC, than 75% of the provinces. "Existing" TV stations 2016). India is in the third position with revenues of are TV stations that were operating before the US$22.1 billion (OECD, 2013). Meanwhile, in the implementation of the Broadcasting Act. The term same year, Indonesia earned US$ 5.4 billion from "existing TV station" is a synonym for Jakarta TV or the TV industry (Marketline, 2017). national TV. In addition to economic benefits, TV also gives a The number of provinces in Indonesia is 34. political advantage. Some political leaders once had Therefore, for the existing TV stations, the broadest careers as broadcasters. The 40th President of the coverage limit is 31 provinces, and for the TV USA, Ronald Reagan, was a broadcaster, and the stations established after 2002, the most extensive 45th American president, Donald Trump, was once a broadcasting cannot cover more than 26 provinces. TV producer and reality TV host. In Indonesia many According to government regulations, networked politicians have had careers in the TV industry, such TV broadcasts consist of one leading TV network as Siti Hardijanti Rukmana (founder of TPI, a and some network members. The broadcasting Golkar Party politician and former minister), Surya network TV system in Indonesia puts the leader in a Paloh (owner of Metro TV, Nasdem Party more dominant position than the members, who act chairman); Harry Tanoesudibyo (owner of MNC as a relay station. According to the Ministry of TV, chairman of Perindo Party); Aburizal (owner of Communications and Informatics Regulation No. TV One and ANTV, chairman of the Golkar Party, 43/PER/M/Kominfo/10 of 2009, the leader network and former minister). The media became a vehicle supplies up to 90% of broadcast duration per day. for entering the world of politics (Grace Swestin, Therefore, the author focuses on the leader 2008). networks, because they are potentially dominating. The TV industry is growing in many countries, Dominance is an extreme inequality in the including Indonesia. In 2002, Indonesia distribution of social power (Pansardi, 2013). implemented Act 32 on broadcasting that turned the Domination harms the public because the interests TV broadcasting system into a decentralized one, of the majority of society will be marginalized and after 40 years of running a centralized broadcast conflict increase. Domination can eliminate system. The Act aimed to realize the diversity of society's cultural existence, and dominance will media ownership in order to foster the variety of benefit only a small part of the society, while most broadcast content. Based on the Act, TV elements others will lose. broadcasting stations must be broadcast locally, In reviewing substantial TV stations, the author uses except through the broadcasting network. The data on broadcasting permits issued by Kominfo. enactment of this Act has the effect of increasing the The author also conducted cross-checking through desire of the community to set up a TV company. interviews with sources from the Indonesian In 2016, the number of TV companies increased Broadcasting Commission (KPI), the institution that drastically from 10 to 763 private TV broadcasters oversees TV broadcasting. (Kominfo, 2016). Of these, some companies have many TV stations and build broadcasting networks that tend to dominate Indonesian TV broadcasts. An LITERATURE REVIEW interesting question then arises, who owns a substantial broadcasting television network business Television Broadcasting License in Indonesia? In this article, the author will answer Discussions of the broadcasting TV license can be this question, based on an economic-political divided into two groups, namely the public model standpoint. and the private model. Public model groups argue that radio waves are a limited natural resource and must be owned by the public. The public may grant 12 Network Intelligence Studies Volume VI, Issue 11 (1/2018) limited rights to certain broadcasters to use them choose TV stations that have a significant audience (Corbett, 1996), but the interests of broadcasters share to advertise. The larger the audience, the more must be subordinated to the public interest. The interested the advertiser. This principle means TV users are selected from persons who have owners strive to acquire many viewers. In addition professional skills (Dominic, 2001). The state as the to creating exciting programs, they form a broadcast representative of the frequency owner has to manage networking in collaboration with other local TV democratically and decide who will use the radio stations, so that messages can be disseminated to a frequency (Masduki, 2006). If the broadcaster is broader audience. deemed to fail to use it professionally, the radio TV broadcast coverage provides benefits for media frequency must be returned to the state (Sudibyo, owners in various senses, especially in business and 2004). politics. In addition to attracting more advertisers, The second group argues that radio frequencies can media owners can promote themselves quickly and become private property, through a process of widely. The situation is favorable for TV market transactions. Broadcasters have no broadcasters to build their image and political obligation to the public, except for profit. The support and so to ease themselves into the power government acts as an arbitrator among the many circle. Although TV has rivals in social media, it is parts which compete for these valuable and scarce still able to have an active social and political resources (Corbett, 1996). The market will select the influence in the community. Media TV is influential broadcaster's ability to manage frequencies. in the field of social politics in society (Perez-Linan, Indonesia tends to apply the first paradigm, but it is 2002). TV stations can foster political awareness inconsistent with the issue of licensing. Based on the (Bhatti, Ali and Hassan, 2016), shaping and regulation, the government has the right to grant and changing political behavior (Gautam, 2015). Several revoke the license, but broadcasters often transfer studies have proven that TV is influential in their rights to others by trading the shares of achieving political change in various countries companies that are entitled to manage the (Enrique, 1993; Sakr, 2012; Mishra, 2016). frequencies (Sudibyo, 2004). The government tends In the context of an online media presence, people only to approve the process of moving stocks. Many still place the TV in an important position. TV cases can be given as examples. For example, the broadcasts involve audio, visual, and moving sale of shares in Global TV from the owner to the elements to attract the attention of the public. TV is MNC Group; sales of TPI by the owner to Harry always a source of entertainment, information, and Tanoesudibyo; TV7 sales from KKG to CTCorp, education (Mehraj, Bhat, and Mehraj, 2014). For the and many cases of local TV acquisition by national community, TV functions as a medium
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