December 14, 2022
JAKARTA – A traditional TV broadcaster still has a slight competitive edge over booming streaming platforms despite the latter’s seemingly unstoppable upheaval, Indonesian private television station players predict, based on a new study from Nielsen.
Entitled “Streaming Content Ratings”, the study finds that mobile streaming reaches more than 80 percent of Indonesian TV audience and is watched for nine hours per month where “heavy users” even touch 28 hours per month. It is noteworthy that, however significant, the consumption figure is still way below that of TV’s, which extended to 80 hours per month on average.
Nevertheless, the report indicates a shift in the status quo considering how from the third quarter of 2019 to 2022, TV’s reach is decreasing by nearly 10 percent, whereas the internet’s jumped by more than 20 percent.
“Distribution to whatever platform there is, is important for [linear] TV survival. […] With diversifying our platforms, people can still watch TV through other media,” said Neil Tobing, vice chairman of Indonesian Private Television Station Association to The Jakarta Post, on Tuesday.
Neil explained that a TV station converging with over-the-top (OTT) services is logical due to how internet platforms are more easily accessible than traditional TV, given how OTT only needs internet access that has more use cases than just watching, vis-à-vis TV infrastructure.
Currently, Neil revealed, traditional televisions were only available in limited places, namely the capital of the provinces and its satellite cities, which only amounted to around 70 cities.
However, Neil reiterated that this research was a product Nielsen tries to sell; therefore, skepticism in viewing the data was advised. He pointed out that in terms of viewing hours, traditional TV viewing was now far below streaming platforms, according to studies from a handful of market researchers.
Regardless of that, he said that TV was still on top in terms of penetration, placing TV to be “massive in reach with much more audience”, giving it an efficiency edge over any internet media.
TV is more effective in advertising compared to streaming platforms due to how it could yield a higher conversion rate at a cheaper price.
“Cost per mile for internet ads may look cheaper, but [TV] has a much higher conversion rate,” said Neil, adding, “In 2025, the market shares between traditional TV and the internet will go toe-to-toe.”
Regardless of business strategy, Neil emphasized that broadcasting is a content industry, meaning that pushing for better contents is of utmost importance to ensure success.
Vidio reigns
Excluding Youtube in the equation, Vidio is currently reigning over any other streaming platform in Indonesia by a respectable margin, as per Nielsen’s report. However, albeit offering a range of different contents, Vidio told the Post that its segmentation is still dominated by TV audience.
“From consumption time, TV is currently the biggest,” Vidio managing director Monika Rudijono told the Post on Friday.
Government-induced analog switch-off, a transition program from analog to digital TV, resulted in a windfall for Vidio, considering how the consumption figures swelled after the national program kicked-off on Nov. 2.
On top of TV broadcast, Vidio’s contents are grouped into three other categories: sports; original contents; and licensed contents that include features from Hollywood, Korea, Japan, etc.
In general, streaming-platform segment has three different business models, namely subscription video-on-demand (SVOD) where users can view an unlimited amount of contents at a flat rate per month; transactional video-on-demand (TVOD) where users purchase content on a pay-per-view basis; and advertising-based video-on-demand (AVOD) whose contents are free for users, but they have to sit through advertisements.
Much like Vidio, it is common for over-the-top platforms to operate with multiple business models based on the aforementioned three.
Statista projected the SVOD segment would accrue a revenue of US$232 million by the end of 2022 and it is expected to show a 2022-2027 compound annual growth rate of 12.84 percent, translating to a projected market volume of $425 million by 2027.
The average revenue-per-user in the SVOD segment is projected to amount to $13.49 in 2022 and the number of users is expected to amount to 26.3 million by 2027, with an expected penetration of 9 percent.
Nielsen Indonesia executive director Hellen Katherina said that nowadays it is very important for streaming-service players to have “a solid understanding of the streaming landscape, especially an audience-consumption view, considering the total usage of streaming platforms comparable to linear TV”.