Something is interesting about the UU Cipta Kerja. Perhaps this has escaped many discussions so far because of the certainty of when Indonesia will turn off its analog television broadcasts. In ASEAN, only Indonesia and Timor Leste have not migrated. Referring to Article 60 of Law No. 11 of 2020, which the president signed on November 11, 2020, analog TV broadcasts will be inoculated on November 11, 2022.
This means that starting from promulgation, the current 728 television broadcasting licenses must have migrated to digital broadcasting no later than two years from now. So why is the government dealing with the television industry, which is already in its sunset business? Why not just jump into the more advanced television industry.
Calm. Migration to digital broadcasting is not only about more television broadcasts,
pictures, and clearer sound. The most concrete action plan for the migration is a matter of arrangement. It has been too long since the 700 Mhz frequency has been wastefully used by existing television stations. Now the government wants to organize it, firstly so that players in this industry don't just do that, secondly from the results of the arrangement, and there will be a digital dividend bonus of 112 Mhz which gives the government be able to provide high-speed broadband internet infrastructure.
Therein lies the future of the Indonesian television industry: TV Anywhere. A revolution in watching began and was driven by the growth of video streaming services that today we know as over the top or OTT. OTT will use public internet access to provide a fundamental change in television consumer behaviour which is linear towards non-linear behaviour. The democratization of public access is happening everywhere with the choice of devices that will adapt to consumer behavior; it can be through desktops, tablets, game consoles, and smartphones, respectively. As a result, viewers choose the vast amount of content that can be accessed and disrupts the linear “primetime” of traditional television services.
Isn't this already happening now in Indonesia? Already but still on the slow track. With more than 250 million people, a study by the Kantar survey institute predicts that 60 percent of video viewers via mobile phones in the world will be in Asia in 2023. While in North America only 8%. This shows that Asia is a big market for the growth of OTT video services.
So it's no coincidence that Indonesia will end analogue television broadcasting at the end of 2022. Let's say goodbye to analogue television. And by 2022, the landscape of the television industry is changing. Television industry players, especially in the media conglomerate group, will be ready to duplicate the platform. The MNC group with MNCPlay, RCTI+, etc., the Emtek group already has its Vidio.com and MolaTV, which the Polytron business group owns.
Meanwhile, foreign players who entered Indonesia earlier were Netflix, Viu, and Iflix. Disney+ entered by cooperating with a local partner, the largest cellular operator in Indonesia. And those who do not have great power only hope to broadcast on Digital Terrestrial TV (DTT), which the government is now preparing. They will naturally consolidate into several business groups due to the sluggish growth of the traditional television advertising cake.
Nielsen sees that by 2022 there will still be platform duplication of 50% versus 50% between those who watch television broadcasts on traditional linear platforms and watch traditional television using digital streaming platforms either through browsers, applications, or OTT.
Kantar says growth is inevitable. According to Kantar in his latest report, people in Southeast Asia today have as many as 180 million people exposed to OTT, with this year's growth reaching 31 percent. The pandemic is one of the triggers for that growth. For example, 57% of Southeast Asians watched more videos via OTT services during the pandemic.
Better infrastructure will encourage higher growth. And lower costs are driven by intense competition between operators to increase the use of high-speed internet services. As a result, mobile and broadband data costs have fallen by about 40 percent since 2018, making streaming more accessible while bringing more viewers online.
The Southeast Asia region, especially Indonesia, will still be seen as a region that continues to grow. The region's steady economic growth has resulted in a middle class being more willing to spend money on entertainment. As a result, 50 million new consumers will join the middle class in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam by 2022, when Indonesia ends its analog television broadcasts.
After the 700 MHz frequency arrangement, the lower class will watch traditional television services with digital transmitters and get free and varied television broadcasting facilities. So the digital dividend bonus grows more OTT players in the region. And offers a free, ad-supported video service to meet the price sensitivity of Southeast Asian consumers and their greater tolerance for advertising. By 2024, 74 percent of online video revenue in Southeast Asia is still expected to come from advertising. This is in contrast to North American society, which relies on subscription fees.
According to Kantar, Southeast Asian consumers benefit from popular international content and a growing high-quality regional and local content library. In addition, OTT players are estimated to spend nearly USD 4 billion buying local content by 2022.
So it is not wrong if the Boston Consulting Group, in its 2017 study, estimated that the digital dividend will produce a digital economy multiplier effect (total 2020-2026): 181 thousand additional new business activities, 232 thousand additional new jobs, Rp 77 T increase in taxes and PNBP, Rp 443.8 T increase in contribution to national GDP.
The government's homework then is how to give the underprivileged the right to enjoy free and good quality television shows. This is where the government and industry will formulate the distribution of at least 15 million decoders or set-top boxes for the poor who still have tube televisions to watch digital terrestrial TV (DTT) broadcasts.
The development of OTT, like in Hong Kong, will not turn off DTT. Hong Kong has 80 percent switched to OTT services. DTT is mainly a place to broadcast public tv and Community TV, while OTT will develop with fees or subscriptions. Both will work, but the market will be segmented tightly. (*)
Apni Jaya Putra
Broadcaster and Media Consultant
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