Indonesia: Investment in local content threatened by piracy
March 20, 2019
The Asia Video Industry Association (AVIA) held a one-day conference, Indonesia in View, on March 19th to assess the health and prospects of the video industry in South East Asia’s largest country. The In View events are designed to bring together government officials, key in-country business heads, and international and local experts to discuss crucial issues relevant to the industry.
The conference was opened jointly by Ibu Rosarita Niken Widiastuti, the Secretary General of the Ministry of Communication and Information Technology and Dr. Yuliandre Darwis, the Chairman of KPI. Presaging one of the key themes of the day, Dr Yuliandre said the government hoped to see and support increasing investment in local content. Alphabeta Engagement Manager Konstantinos Matthies observed that his firm’s surveys indicate that Online Curated Content (OCC) providers would multiply their investment in Asian content 3.7 times, in the next three years. Fauzan Zidni the Chairman of APROFI (the Indonesian Association of Film Producers) also acknowledged the opportunity for the local production industry to grow and move up the value chain with the increased focus on local productions. Joddy Hernandy, SVP Media and Digital Business and EGM Digital Services Division of Telekom emphasised the importance of the user experience for both paid and ad supported services.
In a discussion between the major OCC video streaming companies – Hooq, iflix, OONA, Viu and Telkomsel, Jason Monteiro, CMO of iflix, said they would double their investment in local content this year, as they had seen favourable audience reactions to Asian stories.
All parties agreed that unique, original content was this biggest draw to attract subscribers while Dr. Guntur S. Siboro, Country Head of Hooq pointed out that real competition was for app space on the smartphone and there was really only a desire for one content app from Indonesian consumers. Crispin Tristram, VP of digital lifestyle service of Telkomsel talked about the growing success of their super app that aggregates content but also pointed out the challenges of monetisation – in gaming they are seeing a 10 per cent conversion rate from free services to paid, for music it is 3 per cent but for video it is less than 1 per cent.
This low conversion rate was almost certainly largely because of the high levels of piracy in Indonesia. Over discussions throughout teh day it became clear there was still a large traditional DTH piracy market with local cable operators illegally retransmitting DTH signals to their own subscribers; but there was also a massively growing digital streaming piracy ecosystem and until that is addressed, free to paid conversion rates for video services will remain low.
The final session of the day focussed further on the problems of piracy, especially as it related to football and Louis Boswell, CEO of AVIA highlighted the focus the association now has on piracy and the active engagement it is currently pursuing with local industry and government in Indonesia.
A survey, commissioned by AVIA’s Coalition Against Piracy (CAP), and conducted by YouGov highlights the detrimental effects of streaming piracy on legitimate subscription video services. The YouGov survey found that 29 per cent of online Indonesian consumers use an TV box to stream pirated television and video content. Of the 29 per cent of consumers who purchased an illicit streaming device (ISD) for free streaming, two in three (66 per cent) stated that they cancelled all or some of their subscription to legal pay TV services. Specifically, 33 per cent asserted that they cancelled their subscriptions to an Indonesian-based online video service as a direct consequence of owning an ISD. International subscription services, which include pan-Asia online offerings, were also impacted – more than one in three (31 per cent) Indonesian users abandoned subscriptions in favour of ISD purchases.
Indonesia in View was supported by Presenting Sponsor TV5Monde, alongside sponsorship from Hansen Technologies and NHK World Japan.