April 2, 2024
JAKARTA – The Finance Ministry has expressed doubt that public-sector advertising deals will do much to ensure the sustainability of Indonesian media companies.
The ministry was responding to a presidential order to focus the government’s advertising budget on local press rather than on digital platforms.
Media experts, meanwhile, have said that government support through regulations and budget arrangements is a must to ensure a level playing field in an advertising market currently dominated by global tech platforms, and failure to do so may result in the failure of local media companies and a lack of high-quality journalism in the country.
In February, President Joko “Jokowi” Widodo signed the publisher rights regulation, which coincided with the celebration of National Press Day, after months of delay caused by stalled negotiations between publishers and digital platforms. The regulation requires tech platforms to enter deals with media firms in the form of paid licensing, revenue sharing or data sharing.
The President acknowledged at the time that major platforms may choose not to support the policy and instead limit their services in the country, as has been seen in their responses to legislative changes in Australia and Canada.
“I have ordered the communications and information minister to prioritize media firms [rather than digital platforms] in government advertising spending. This could be a short-term buffer,” Jokowi stated.
The Chief Editors Forum, which represents local media companies, argued that state support in the form of advertising deals for media companies was similar in spirit to the local content requirements (TKDN) for manufacturing industries.
“For example, the government could allocate between 20 and 30 percent of the advertising budgets of ministries and state-owned enterprises (SOEs) to local media,” Kemal Gani, chairman of the advisory board of the Chief Editors Forum, said during an event also attended by Finance Minister Sri Mulyani Indrawati and Communications and Information Minister Budi Arie Setiadi in Jakarta on Wednesday.
In response, Sri Mulyani explained that, when placing ads in any media, government entities paid attention to how to communicate their programs to the public effectively. Aside from newspapers, online news portals, television and radio, this may also involve social media.
“If viewer numbers [of our content] on social media are increasing, it would be really hard [to keep using traditional media]. We may continue to put ads in [traditional media], but the amount may be very small,” Sri Mulyani said.
She pointed out that the sustainability of traditional media was a more fundamental problem than one that could simply be solved by allocating more money for advertising. She suggested publishers also focus on other aspects, such as their ability to create interesting content for young audiences, as well as detailed customer profiles.
“If we give advertising funds [to a traditional media firm] for one or two years, but the media [firm] has no viewers, the company will still die sooner or later,” she argued.
SOE Ministry spokesperson Arya Sinulingga said the need for SOEs to disseminate information was increasing every year. However, to target a mass audience, they had also tapped into foreign digital platforms on top of traditional media.
Read also: Jokowi signs regulation requiring Google, Meta to pay for news
Preventing more casualties
Alliance of Independent Journalists (AJI) chairman Sasmito Madrim warned that significant revenue losses caused by objections from digital platforms to the publisher rights regulation may prompt layoffs in the media industry and the closure of some outlets, while a “subsidy” through government advertising budgets was a way for local media players to counter that threat.
“If the government still treats media companies as the fourth pillar of democracy, they should be concerned. Government entities, which are mostly funded by taxpayers, should distribute the money back to verified local media,” Sasmito told The Jakarta Post on Thursday.
Aside from giving advertising funds to for-profit media companies, he also suggested that the government create an endowment fund to give grants to non-profit entities.
Sasmito opined that, amid the disruption brought about by social media, traditional media was the last bastion against hoaxes and, if maintained, could support public literacy by encouraging consumption of high-quality journalistic content.
He said the notion that traditional media was losing its audience was inaccurate, as data from the Indonesian Cyber Media Association (AMSI) showed that reader numbers had increased during the pandemic.
“That means there is a shift in public behavior to read more mainstream media. The problem is, despite the surge in readers, their income continues to decrease,” Sasmito said.
Read also: How a committee plans to make digital giants work with media firms
Agus Sudibyo, a former Press Council member who was involved in formulating a draft version for the publisher rights regulation, agreed that government support in the form of ad spending was necessary for the media industry.
He noted that allocating advertising funds to local media meant putting more money into the domestic economy and creating jobs, while the benefits of spending the funds on foreign digital platforms would only go to other countries.
Agus also stressed that government support was necessary to level the playing field between media companies and digital platforms, which have disrupted the business of major media outlets such as The New York Times and The Washington Post in the United States.
“So, the issue is not just about media sustainability, but also about economic sovereignty and public welfare. If media companies need to shut down and lay off their employees, that would become a problem for the government, right?” he told the Post on Thursday.
However, he also said media platforms needed to improve their business models, technological infrastructure and content distribution models to align with current media consumption trends.
“The publisher rights regulation is not the ultimate cure. It is an important foundation that needs to be supported by other things, including innovation and adaptability of media companies,” Agus concluded.