Ismail Fahmi: Traditional TV stations in the era of new media: the Indonesia case

Introduction

In this essay I will discuss how traditional TV stations in Indonesia have been mediated and disrupted by developments in network media brought about by the internet. In this regard, I will also investigate how other players inthe internet industry have adopted and adapted the material produced by traditional TV stations for their own benefit. This study aims to understand how traditional TV stations in Indonesia grapple with the new players on the internet who re-broadcast the TV stations’ programs through online live streaming.

Indonesia’s major TV stations are still using radio frequency (UHF/VHF), TV cable subscription, and online live-streaming from their websites as their main broadcast mediums. These ‘traditional’ TV stations are RCTI, SCTV, Indosiar, TransTV, Trans7, GlobalTV, MNCTV, ANTV, TVOne, MetroTV, TVRI, Net, Kompas TV, and RTV. Using the broadcast medium, viewers are able to watch TV programs from these TV stations for free. As a result, advertising has become the main source of the TV stations’ revenues. Although, the TV stations have also provided free online streaming, the online platform does not generate revenues.

On the other hand, a new business model has emerged thatis flourishing. There are now ten websites thatprovide full access to the traditional Indonesian TV stations through online live streaming. Most of the websites were launched in the last two years. The eleven websites are Tvonlineindonesia.net, Mivo.com, Tvonlineku.com, Indostreamix.com, Kompitv.com, Poztmo.com, Indostar-tv.com, Useetv.com, Televisikita.net, Indostreaming.tv, and Nicetvonline.com. The home pages of the websites provide links to particular TV stations, almost like a traditional TV remote control. Viewers can easily switch channels without having to jump from one page to another. By providing the facility for comments, some of the websites have also created their own communities that allow viewers tointeract and communicate with one another. The websites generate revenues from advertisements that pop-up on their pages, including from Google AdSense. This re-broadcasting model, I argue, has been widely accepted by netizens as reflected inthe growing number of these websites in recent years.

In the United States context,Braun (2013)has argued that the case of Hulu and Boxee reflects the continuing battle between the old players (traditional TV stations) and the new internet players. The battle occurs as each player tries to protect their business model. However, what has been exemplified in the case of Hulu and Boxee does not occur in the Indonesian context in which the traditional TV stations allowtheir products to be re-broadcast by the online media platforms.

Againstthis backdrop, this essay investigates how Indonesian online TV has grownsignificantly just in the last four years and what factors have influenced this phenomenon. In particular, this essay investigates why the traditional TV stations let other players continuously embed their TV streaming platform and explores what are the benefits for the TV stations. Furthermore, this essay discusses why the traditional TV stations and the online platform can both co-exist without having any ‘battle’ such as occurred in the case of Hulu and Boxee.

Methodology

I planned to interview representatives from all of the Indonesian online TV stations to gain more insight from primary sources. However, I was only able to contact seven of theeleven sources as the remaining five do not provideany contact details on their websites such as email, or any social media platforms. Unfortunately, none of the seven online TV stations responded to my interview request. As a result, this essay investigatesonline sources of relevant material in order to clarify details of the Indonesian online TV system.

Google Trends, DomainTools, and Alexa are among the primary sources that are used for data collection. Google Trends is used to look at the popularity of particular Indonesian online TV websites. This source also helps me to determinewhen the website started operations, gained its popularity, and in which countries the website is popular. DomainToolsis a website that provides domain name registration and hosting data. By using this service, among others, I am able to confirmwhen the Indonesian online TV websites were created and the locations of where the websites are hosted. Alexa is used to understand the traffic of visitors to the Indonesian online TV websites. It measures the traffic ranking of the websites in Indonesia and globally.

To analyse and contextualise the data used inmy research, I use the sociotechnical system approach. This paradigm argues that a technological phenomenon can only be understood through a broader understanding of its sociological setting, including regulations, business interests, cultural expectations, and technological developments(Braun, 2013; Silverstone, 1994; Turow, 1997; Williams & Williams, 2003).Understanding how a particular technological phenomenon works is best reflected in what Turow (1997, p. 49) has argued isTV's structure.

is found in the rather predictable relationships that networks, Hollywood production ﬁrms, communication law ﬁrms, market research ﬁrms, pressure groups, and other entities have with one another. An important step toward understanding the structure of an industry and its function in society lies in assessing the events that have caused various relationships to evolve.

Therefore, in this study ofIndonesia online TV, I investigate regulations in Indonesia on broadcasting, copyright, and information technology; the issue of piracy; stakeholders' business interests; cultural expectations of the Indonesian online TV services; and technological developments in countries in which the Indonesian online TVservices are popular.

Discussion

TV Online in Indonesia

Online TV in Indonesia has grown significantly in the last few years. By the end of 2010, Mivo TV was the only Indonesian online TV service in operation. As the first Indonesian online TV service, Mivo TV started to gain its popularity by the end of the 2000s (GoogleTrends, 2014). During that period, Mivo TV was morepopular overseas than in Indonesia. I have witnessed this phenomenon first-hand during atrip to New York at the end 2010, where I found that Mivo TV was regularly watched by many Indonesians in the United States. Since then, Mivo TV has continued as the global market leader in the industry. New entrants in the field of online TV services soonfollowed after the success story of Mivo TV.

Based on DomainTools (2014), ten Indonesian online TV services have been created just in the last four years. In 2011, Poztmo.com, Indostar-tv.com, Televisikita.net, and Useetv.com were created. In 2012, Tvonlineindonesia.net and Indostreamix.com were created,and in 2013, Tvonlineku.com, Kompitv.com, Indostreaming.tv, and Nicetvonline.com began services. This significant recent growth in the number of servicesclearlyindicates that watching television online has become much more popular among Indonesians.

Figure 1: Indonesian TV Online global rank December 2013-May 2014(Alexa, 2014a).

Websites	Rank in Indonesia	Global rank
mivo.com	498	13650
tvonlineindonesia.net	455	26554
useetv.com	453	38759
poztmo.com	666	41654
indostar-tv.com	-	47621 (as of 18 May 2014)
indostreaming.tv	860	48786
indostreamix.com	964	50601
nicetvonline.com	1692	90384
tvonlineku.com	2806	121385
kompitv.com	3796	173980
televisikita.net	10321	389101

Source: (Alexa, 2014a)

During its early stages, Mivo TV was very popular overseas and regularlyviewedby Indonesiansliving overseas. Data from Alexa and Google Trends shows that Mivo TV was very popular in countries in which the number of Indonesian residents is relatively high. Although both data are not identical, these two sources indicate that the countries are generally similar.

Figure 2 Mivo TV's visitors around the globe as of 31 May (Alexa, 2014b)

Figure 3: Mivo TV's global popularity as of 4 June (Google, 2014d)

There are more than 4.5 million Indonesians living overseas. The majority livein Malaysia, which constitute more than 50 percent of the total number. Although Malaysia has the highest number of Indonesians living overseas, the data also indicates that access to Mivo TV in Malaysia is considered low in comparison with other countries. I argue that it is influenced by the fact that internet download capacity in the country is relatively low to be compared with other countries on the list. It should be noted that to watch online TV, viewers have to have access to high download speeds. From this perspective, it is plausible why the penetration rate in Malaysia is lower than Saudi Arabia, South Korea, Japan, Singapore, and Australia. It should also be noted that Indonesians in Malaysia can watch Indonesian TV stations’ programs either via analog satellite signal(Faiqun, 2007)or through digital cable TV subscription(Astro, 2014). As a result, watching Indonesian TV stations online is not popular in Malaysia.

Mivo.com statistics based on 96856 daily visitors (WebsiteOutlook, 2014e)
Country	Mivo.com percentage of visitors	Number of Mivo.com visitors	Number of Indonesians	Number of internet users	Internet speed (in MBPS)
Indonesia	37.6 %	36418	253,609,643	42,258,824	4,57
South Korea	20 %	19371	34,205	45,314,248	52,49
Saudi Arabia	11.8 %	11429	857,613	17,397,179	10,68
Japan	9.1 %	8814	28,132	109,252,912	29,01
Singapore	6.6 %	6392	198,444	4,453,859	68,23
Australia	3.3 %	3196	62,663	21,176,595	14,89
Malaysia	2.6 %	2518	2,540,450	17,723,000	5.73
Germany	2.3 %	2228	16,028	71,727,551	26,17
The United States	1.2 %	1162.272	117,085	279,834,232	24,42
The United Kingdom	0.7 %	677.992	8295	57,075,826	27,85

Source: (Alexa, 2014a; ILS, 2014; IWS, 2014; KPU, 2014; NetIndex, 2014; WebsiteOutlook, 2014e)

The massive piracy

It has never been clear whether the Indonesian online TV services have formal cooperation with all of the Indonesian major TV stations, as there is no publicly available information about this issue. However, it can be assumed that not all of the Indonesian online TV services have formal cooperation with the traditional stations. This assumption was built on an understanding that copyright infringement is abundant. Piracy is one of the major problems in the online industry in which the Indonesian online TV businesseshaveflourished in the last four years.

The International Intellectual Property Alliance (IIPA), a private sector coalition in the United States that focuses on protecting copyrighted materials, has found that the piracy situation in Indonesia is a major problem. As a result, the IIPA has repeatedly recommended placing Indonesia on the Priority Watch List in each ofthe last fourteen years (IIPA, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001). Their recent report intothe online sector explains that:

[a]ccording to the Indonesia Internet Service Providers Association, by the end of 2013, there were 62 million Internet users in Indonesia (up from 55 million in 2012), or almost 25% of Indonesia's population. Mobile penetration is well over 100%, with 282 million mobile subscribers, There are nearly 3 million fixed broadband subscriptions (up from 2.7 million in 2012).These numbers indicate that significant opportunities exist for the launch of legitimate services for the distribution of copyright materials in Indonesia. Unfortunately, with the absence of an adequate legal or enforcement framework, online and mobile piracy services have proliferated, including direct download sites (mainly from servers located outside esia), and illicit peer-to-peer (P2P) file sharing. Some of the most notorious piracy websites in the world are servicing the Indonesian market. The evasive behavior of online pirate services in Indonesia, switching online locations and website names to avoid detection, using other fraudulent practices, and using offshore servers, has created hurdles to effective enforcement. (IIPA, 2014)

The IIPA has identified that using offshore servers is among the fraudulent practices, allegedly, to avoid legal enforcement. In relation to this, I have found that some of the Indonesian online TV services are also using overseas servers. Tvonlineindonesia.net's server is in Panama, Latin America and Tvonlineku.com is registered in Kirkland, Washington, the United States. It is also interesting to highlight that Tvonlineku.com is not only embedding live-steraming from Indonesian TV stations, but it is also offering gambling services on the site's page.

On the other hand, the Indonesian Law on Information and Electronic Transaction 2008, article 27 point 2, stipulates that online gambling is prohibited and illegal. To avoid the legal problem, Indonesian telematics expert, Ruby Alamsyah, argues that the websites' servers are located overseas in a country where online gambling is legal(Fitrat, 2013).

Variant Business model

There are four models of TV stations in Indonesia: public, private, community, and subscription. The TV stations generate revenues from government’s budgets, commercials, donations, subscription fees, grants, and sponsors (UUPenyiaran, 2002). The national public TV station (TVRI) largely gets its’ funding from the national budget while national private TV stations largely generate their revenues from commercials. Iskandar Achmad, TVRI Managing Director, has stated that other funding sources, such as cooperative content production ventures, and transmitting station rentals can only support TVRI’s operational cost for one month (Suharman, 2014).

There are two large groups of national private TV stations in Indonesia that best exemplify how much revenue is gained from TV commercials. MNC Investama, the parent company of three national private TV stations (RCTI, Global TV, and MNC TV), generates its revenues largely from TV commercials. During its first nine months in 2013, MNC Investama generated Rp 8,42 trillion (approximately AUS$ 802 million) in which 59 percent of its revenues came from TV commercials (Sandy, 2013). In 2013, Intermedia Capital, the parent company of two national private TV stations (ANTV and tvOne), generated a net profit of Rp 118 billion (approximately AUS$11,2 million). Erick Thohir, the President Director of Intermedia Capital, said that the profit was supported by the high revenues from TV commercials,from which ANTV generated Rp 65,9 trillion (approximately AUS$6,2 billion) (Wiyanti, 2014).

The Indonesian online TV services generate their revenues from advertisements that appear on their web pages. Google AdSense has become the most popular, while there are also other advertising providers such as, KlikSaya.com, Komli, Adplus, AdStars, and Chitika. There are two common types of revenue for the Google AdSense system: cost per click (CPC) and cost per 1000 impressions (CPM) (Google, 2014c). This payment model has also been widely used by other advertising providers such as KlikSaya.com (2014).

Based on WebsiteOutlook, Mivo.com has the highest number of daily visitors and revenues from advertisements among the Indonesian online TV services. As of 31 May 2014, the website attracted 96,856 daily visitors with US$ 290.57 daily revenue or more than Rp 3 million(WebsiteOutlook, 2014e), while kompitv.com has the lowest number of daily visitors (1146) with US$3.44 daily revenue or about Rp 40,000 (WebsiteOutlook, 2014d). Below are the visitor and revenue details for the Indonesian online TV websites.

Websites	Daily Visitors	Daily Revenues (in US$)
mivo.com	96856	290.57
tvonlineindonesia.net	43002	129.01
indostreamix.com	31847	95.54
poztmo.com	26476	79.43
useetv.com	22246	66.74
indostar-tv.com	20877	62.63
indostreaming.tv	16286	48.86
nicetvonline.com	12415	37.25
televisikita.net	2793	8.38
tvonlineku.com	2275	6.83
kompitv.com	1146	3.44

Source: (WebsiteOutlook, 2014a, 2014b, 2014c, 2014d, 2014e, 2014f, 2014g, 2014h, 2014i, 2014j, 2014k)

Some of the Indonesian online TV websites generate revenues from other sources and, for some, the online TV service is not their major source of revenue. Mivo.com as the leader in the industry, for example, is actually a sub-business sector of Imediabiz Pty Ltd. The company, which operates in the information technology industry, is based in Sydney, Australia and Jakarta, Indonesia, and started operations in 2009, while its parent company has been operating since 2003. Mivo.com provides web hosting, domain name registration, reseller hosting, dedicated servers, website development, graphic design, and internet media (Imediabiz, 2014).

Useetv.com has a different business model. The website is one of PT Telekomunikasi Indonesia’s (PT Telkom) business platforms. It converges with PT Telkom’s other services. Useetv.com provides multimedia content such as movies and TV programs. Some content, including online TV streaming can be accessed by all visitors. However, some content can only be accessed by subscribers who are customers of PT Telkom’s phone and internet services: Telkom Speedy, Kartu Halo, Simpati, Kartu As, and Telkom Flexi (UseeTV, 2014). Useetv.com does not generate revenues from advertising like the majority of Indonesian online TV websites. Insread, Useetv.com generates revenue from rental fees for multimedia content that ranges from Rp 10,000 (approximately AUS$ 1) for a movie serial package to Rp 3,500 (approximately AUS$ 0.35) per movie. The rental period is between two to thirty days.

TVonlineku.com and nicetvonline.com generate revenue from gambling advertisements on their web pages. The websites do not generate revenues from Google AdSense as Google restricts the placement of gambling advertisement (Google, 2014a). Against this backdrop, I argue that the Indonesian online TV live-streaming services are used by these websites only to attract visitors from Indonesia. Based on Alexa.com (Alexa, 2014c, 2014d), tvonlineku.com and nicetvonline.com respectively attract 88.7 per cent and 63.6 per cent visitors from Indonesia. I also found that the two websites are registered in the United States. The reason why the websites are based overseas is that the Indonesian Law on Information and Electronic Transaction (DPR & President, 2008) prohibits websites that provide online gambling.

Why do they let them go?

Indonesian law number 19/2002 on copyright stipulates that the broadcast company owns exclusive rights to allow or prohibit other parties to make, reproduce, and/or rebroadcast, its product on any mediumwithout its consent. Indonesian online TV websites allegedly infringe this ruling, as has been argued by Mahfudz Mabruri (2014), editor in chief of Elshinta TV and Wendiyanto Saputro (2014), vice editor in chief of Bloomberg TV Indonesia. They argue that copyright infringement has become common in Indonesia. However, Saputro (2014) admitted that not all Indonesian online TV websites broadcast Bloomberg TV Indonesia illegally:

I remember that Mivo TV (Mivo.com) has an agreement with us. But I do not know the details of the agreement. It should be asked to the legal department. (Saputro, 2014)

I have also observed that Indonesian TV stations also infringe copyrighted works. For example, some Indonesian TV stations’ programs repeatedly use content from YouTube without explicit consent from the owner of the content. They simply acknowledge the material as “source: YouTube.com”, without namingthe copyright owner of the video content (Mabruri, 2014). There are also some Indonesian TV stations’ programs that solely re-broadcast videos from YouTube. Some of the programs are: On the Spot, Spotlite, CCTV (these first three are broadcast on Trans 7) and Fenomania (ANTV). Simply adding “source: YouTube” on the broadcast does not necessarily mean that the user of the video can publish the video.YouTube (2014a) stipulates that YouTube is not the party that could grant right to publish a copyrighted material to other parties. It could only be done by the owner of the copyrighted material.

If you plan to include copyright-protected material in your video, you’ll generally need to seek permission to do so first. YouTube cannot grant you these rights and we are unable to assist you in finding and contacting the parties who may be able to grant them to you. This is something you’ll have to research and handle on your own or with the assistance of a lawyer…. YouTube cannot grant you the rights to use content that has already been uploaded to the site. (YouTube, 2014a)

Indonesian TV station programs not only allegedly infringe YouTube copyright Terms of Service (Youtube, 2014c), but are in fact themselves also repeatedly the victims of rampant piracy on YouTube. I have found that it is very easy to find Indonesian TV station programs on YouTube. Here are some of the YouTube account names that upload many Indonesian TV stations programs: Sebut Saja Mawar, Stempel TV, Tukang Becak, Aminah Sharing, Video Ngasal, Indo 7 Channel, and Sinetron Indonesia.

Although the allegedly massive piracy has been going on for some time, there has never been any decisive action to curtail these illegal activities. Such actions will never be stopped as Google’sTerms and Conditions states that legal action to ban the use of copyrighted materials by other party can only be done if the owner of the copyrighted materials submit a copyright infringement notification to Google or YouTube(Google, 2014b; YouTube, 2014b).

Conclusions

The continuing battle in the United States between the old players (traditional TV stations) and the new players on the internet such as Hulu and Boxee (Braun, 2013), has not occurred in the Indonesian context. Indonesian public and private TV stations and Indonesian online TV websites develop their businesses according to their respective business models without threatening one another. As outlined in the discussion above, I argue there are three main explanations for this outcome.

Firstly, the Indonesian TV stations and the Indonesian online TV websites have developed their own business models, which do not harm each other’s interests. The Indonesian public and private TV stations generate revenues from the government budget, commercials, donations, subscription fees, grants, and sponsors. On the other hand, the Indonesian online TV websites generate revenue from online advertisement providers such as Google AdSense and Kliksaya.com. Some Indonesian online TV websites even broadcast the Indonesian TV stations just to attract traffic to the website in order to serve another business that the website is providing, such as gambling and online video rental.

Secondly, there is no legal conflict over infringement of copyright issues as piracy is an (informally) acceptable 'code of conduct' between businesses in the two media sectors. It has been argued that each player allegedly infringes copyrighted materials. Indonesian TV stations repeatedly use video content from YouTube without seeking consent from the content owner. On the other hand, the majority of Indonesian online TV websites also infringe copyrighted materials from the Indonesian TV stations.

Thirdly, I argue that Indonesian TV stations do not feel that their business model is threatened by the re-broadcasting websites. With an approximate total of US$ 828.68 revenue a day from advertising on all Indonesian online TV websites (approximately US$ 302,468.2 a year or Rp 3,327,150,200), this amount is not comparable to the much larger revenue earned by Indonesian TV stations from advertising commercials (ANTV alone generated ANTV generated Rp 65,9 trillion or approximately AUS$6,2 billion in a year from commercials). Furthermore, it should be noted that the total daily visitors to the websites is 276,219 people, which is only a small portion of the total daily viewers of Indonesian TV stations that can reach 9.2 million people (Sumaryati, 2014). The TV stations also benefit from the Indonesian online TV websites as they therefore reach a broader audience, not only in Indonesia but also overseas. Also, as the websites re-broadcast the TV programs in the exact form they were originally broadcast (including advertisements), the advertisers also gain ‘bonus’ audience exposure.

Finally, I conclude, while it is clear that the Indonesian online TV websites’ business model is lush of piracy over the copyrighted materials, this kind of business will continue to exist as there has never been any indication of legal battle looming over the issue. Furthermore, the Indonesian TV stations and the online TV websites are seemingly working together in a mode of symbiotic mutualism.