Reconsidering the Need for Local Content Quota in Indonesian Media Regulations

  • 23/10/2025
  • Category: Commentaries
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local content

Author: Luthfi Baihaqi Riziq
Editor: Ayom Mratita Purbandani

Introduction

Many regulators and cultural observers in Indonesia express concerns about the sustainability of local media, considering a wide hegemony of Western moneygrabs (i.e. Hollywood) on our screens. Media observer, Darmanto, stated in front of the Indonesian Broadcasting Commission (Komisi Penyiaran Indonesia/KPI) that local media, as one entity of local and national culture, should be optimally nurtured to foster the Indonesian identity.[1] Such measures are necessary because markets tend to favor countries with large, well-developed media industries whose shows and films can easily push aside content from countries with smaller sectors. This echoes a global voice, even from Western countries, promoting and protecting homegrown programming. To do this, countries regulate by imposing local content quotas, ensuring that domestic films, series, and cultural programming continue to have space in the spotlight.

A Wide Look

Content quotas for conventional broadcasting have been implemented in several countries, each with varying approaches. One such country is Australia, in which at least 55% of the total programs of television and radio networks are obligated to be Australian-made, a rule that has remained in effect even when subscription television enters the media landscape.[2] The quotas also include sub-quotas specific for certain genres, like drama, documentary, and children’s shows.[3]

South Africa applies a similarly detailed system, which further categorizes based on the type of broadcasters, i.e. public, commercial, and community. For commercial TV broadcasting, the licensee must ensure that 45% of all programs over the year is local content. The genre-specific requirements differ: 20% of drama, 50% of current affairs, 30% of documentaries, 30% of edutainment, and 25% of children’s shows must be South African.[4] Public and community TV abide by slightly different rules.

In the EU, the “European works” requirements were set under its 2018 Audiovisual Media Services Directive (AVMSD).[5] It sets 50% as the required minimum for broadcast television transmission time, excluding time dedicated to news, sports events, teleshopping, advertising, and others. It also sets that at least 10% of them should be from independent producers.[6]

Lastly, Singaporean rules are contrasting. There is no explicit local content quota that mandates certain percentages of domestic content. Instead, it relies on licensing conditions, content codes, and public service broadcast obligations, which practically aims for the same effect. For example, Singapore’s free-to-air broadcaster Mediacorp is under obligation to air certain programs at different times.[7]

Regulations for over-the-top (OTT) or video-on-demand (VOD) streaming services present additional complexities, with many countries challenged to strike the perfect balance between showing and producing local content. For South Africa, a draft policy was released in July 2025 to invite public comment on proposals that include local content quotas for OTT services. It intends to include fees and taxations for each service, citing their lack of contribution to national revenue. An earlier version released in 2021 proposed a 30% local content quota for streaming services. However, Netflix warned that such a move would downsize libraries and replace quality content with low-budget local production.[8] Netflix refused to comply, instead argued that it supported production of local shows even without local content quota regulations.[9] A demanding regulation would hinder producers from being competitive and rush to just meet the requirements.

Australia faces the same challenges. A few years back, Australia intended to apply local content quotas for streaming platforms by July 2024. However, the legislation was delayed and received no update since. Local production has plummeted since COVID’s lockdowns due to the government’s suspension on quota for Australian drama, children’s shows, and documentaries—three genres which Australian productions are big on.[10] A local content quota for OTT services in the current situation would backfire because production houses would need more time to get the gears going.

The regulation has achieved notable success in the EU with its AVMSD. Since 2018, the EU has implemented a 30% European works quota for OTT services, with financial contributions in the form of tax incentives and investment in European works allowed as an alternative or complement in some member states.[11] Netflix fulfilled this quota by April 2022 in most EU countries, while Prime Video and Disney+ follow an increasing trend.[12]

The Indonesian Quota

Indonesian TV and radio broadcasters now still comply with KPI’s Broadcasting Code of Conduct and Program Standards (Pedoman Perilaku Penyiaran dan Standar Program Siaran/P3-SPS) which mandates local content fills a minimum of 10% and 60% of the entire programming, respectively, with at least 30% of each broadcast during prime time. P3-SPS aims to increase the number to 50% for TV over the years, though the 2012 code of conduct never states the steps to achieve it.[13]

The proposed revision to the broadcasting bill (RUU Penyiaran) would increase this number to 60%.[14] Streaming platforms and pay-TV, presumably conflated as “subscription broadcaster”, should follow a 1-to-10 ratio of domestic to international production, according to the proposed revision. Failure to enact this would result in fines, but the bill and its revision do not imply how taxes, fines, or other revenues would be allocated to the improvement of the television industry as with the AVMSD.

Here is where the counterargument enters. Without a plan to strengthen the domestic content production by giving incentives to big platforms to collaborate with local producers, streaming services could be inclined to include low-quality programs to their catalog, thereby downsizing it. Indonesia would need to focus more on investment to local production houses, either from government sources or financial contributions from streaming platforms. This way, there is less pressure for platforms to produce quickly. Instead, the government and the platforms can establish a partnership of co-creation in the form of local content commissioning, tax deduction to relieve financial pressure if platforms invest a certain amount in local content, funding allocated to local industry, and building production facilities like studios and soundstages.[15]

Netflix has shown openness to produce in Southeast Asia as a strategy to grow on regional markets.[16] Some Indonesian shows, like Joko Anwar’s Nightmares and Daydreams and Gadis Kretek have topped the charts on Netflix, showing promising audiences for Indonesian films alongside many other major Asian cultural powerhouses. This is so even when Disney+ and Prime Video pull back from Southeast Asia in search of profitability and not subscriber growth.

The Southeast Asian huge, yet largely untapped demographic is equally attracted to local stories as they are to foreign ones. AlphaBeta reported that nearly half of Indonesian viewing time for paid VOD is local.[17] This preference is shared across age groups, refuting the perceptions that streaming catalogs’ mostly foreign content would reduce local demand and undermine national culture. This strong demand will push global OTT players to align with this preference by producing high-quality local content.

The Indonesian government and film industries should take on this opportunity by investing more to bring local stories to the fore in high-quality production. An artificial quota, especially with unsuitable numbers, will lead streaming services to choose quantity over quality. Existing quotas can still be retained to keep distribution in check while they work on investments, preferably with some flexibility.[18]

Conclusion

Local content quota policies function as two edged swords. They protect domestic producers from decline while also shrinking available content by inhibiting major producers from producing and distributing. It should be implemented with care and plan Bs to empower said domestic producers, negating the need for quotas in the first place.

  1. Komisi Penyiaran Indonesia. (2022, March 21). Konten lokal merupakan upaya menjaga eksistensi kebudayaan nasional. https://kpi.go.id/index.php/id/umum/38-dalam-negeri/36535-konten-lokal-merupakan-upaya-menjaga-eksistensi-kebudayaan-nasional ↑
  2. See Australia Communications and Media Authority. (2025, August 14). Australian content on commercial TV. Australian Government. https://www.acma.gov.au/australian-content-commercial-tv ↑
  3. Potter, A., & Lotz, A. D. (2022). The first stage of Australia’s digital transition and its implications for Australian television drama. Media International Australia, 182(1), 95–110. https://doi.org/10.1177/1329878X211030370 ↑
  4. See UNESCO. Regulations on local television content. http://www.unesco.org/creativity/en/policy-monitoring-platform/regulations-local-television-content ↑
  5. European Commission. (2025, July 8). Promotion and distribution of European works. https://digital-strategy.ec.europa.eu/en/policies/european-works ↑
  6. The full AVMSD can be accessed here: http://data.europa.eu/eli/dir/2010/13/oj ↑
  7. Infocomm Media Development Authority. (2023, April 7). Television and radio. https://www.imda.gov.sg/regulations-and-licensing-listing/content-standards-and-classification/standards-and-classification/television-and-radio ↑
  8. Broadcast Media Africa. (2025, July 24). OTT streaming: Regulator considers new local content quotas and taxation regulations. https://news.broadcastmediaafrica.com/2025/07/24/ott-streaming-regulator-considers-new-local-content-quotas-and-taxation-regulations/ ↑
  9. Crouth, G. (2021, June 12). Against the stream: South Africa’s White Paper on streaming services could backfire. Daily Maverick. https://www.dailymaverick.co.za/article/2021-06-14-sa-white-paper-on-streaming-services-could-backfire/ ↑
  10. ten Broeke, E. (2025, August 30). Australian film and TV industry calling on content quotas to revitalise struggling local scene. ABC. https://www.abc.net.au/news/2025-08-30/delays-to-content-quotas-for-streaming-services-hurting-industry/105680966 ↑
  11. European Council. (2019, November 21). Audiovisual media services. https://www.consilium.europa.eu/en/policies/audiovisual-media/ ↑
  12. Keslassy, E. (2022, June 7). Netflix meets 30% European content quota in almost all markets on continent. Variety. https://variety.com/2022/digital/global/netflix-30-europe-content-quota-avms-1235286587 ↑
  13. See Standar Program Siaran, Chapter 25 Article 68. The full P3-SPS can be accessed here: https://www.kpi.go.id/download/regulasi/P3SPS_2012_Final.pdf ↑
  14. The latest publicly available draft released in 2024 can be accessed here: bit.ly/ruupenyiaran ↑
  15. Some of the ideas have been legislated in New Jersey and California. See Maddaus, G. (2023, June 27). Netflix to win big with tax incentive changes in New Jersey and California. Variety. https://variety.com/2023/biz/news/netflix-film-tax-incentives-california-new-jersey-1235655938/ ↑
  16. Nugraha, D. W. (2024, July 9). Konten lokal jadi senjata Netflix rebut pasar regional. Kompas. https://www.kompas.id/artikel/serial-lokal-jadi-senjata-netflix-rebut-pasar-regional ↑
  17. AlphaBeta. (2018). Asia-on-demand: The growth of VOD investment in local entertainment industries. https://accesspartnership.com/wp-content/uploads/2023/01/asia-on-demand_fa_spread_interactive.pdf ↑
  18. Singapore follows this model to regulate local content quotas. See Infocomm Media Development Authority. (2018). Media convergence review: Final report. https://www.imda.gov.sg/~/media/imda/files/regulation%20licensing%20and%20consultations/consultations/media%20convergence%20review/1%20media%20convergence%20review%20final%20report.pdf ↑