- 14/01/2021
- Category: Commentaries
You might be familiar with video-on-demand (VOD) platforms such as Netflix, Amazon Prime, Disney+, Viu, and so on. You might also subscribe to one of the streaming platforms to watch their content catalog in your free time. Movie streaming platforms have only begun to emerge in Indonesia in recent years, with the most notable one being the entrance of Netflix to Indonesia in 2016 and followed suit by many other streaming platform competitors that seek to offer an alternative from traditional platforms as theatrical release or TV. VOD service has shown unprecedented growth in Indonesia, with user penetration projected to hit 17.7% in 2025, increasing from the current 4.7% this year. This is also coupled with the expected increase of revenue from US$ 270m in 2020 to US$ 571m in 2025, with the projected annual growth rate of 15.7% per year.[i] The Coronavirus pandemic has also greatly increased the amount of VOD service demand and subscriptions in Indonesia, as most people stayed at home and prompted them to consume entertainment from their homes.[ii]
The effects of VOD service have been somewhat split between the pros and cons. We can see that the emergence of VOD services has supported legal streaming services in the positive effects. A research found that 63% of online consumers in Indonesia watched content from illegal streaming sites.[iii] With more accessible and budget-friendly VOD platforms emerging, it could positively change the streaming culture of Indonesians. Another effect is that it provides quality content for its subscribers from the comfort of their homes, which is crucial in the age of pandemic in which cinema and going outside of the house is not as feasible. It also encourages families to stay at home and minimize the community transmission of the virus. Many VOD platforms have given free trials and discounted rates in promoting this campaign, such as GoPlay, Iflix, and Vidio.[iv]
An Advertisement for Vidio
However, the rise of VOD services in Indonesia has also been subjected to criticisms. Indonesian market’s inclination towards international streaming platforms that discourage local growth streaming platforms and the government’s polarized responses were few of criticism directed to VOD services. When Netflix entered the Indonesian market in 2016, VOD services were relatively new to the country. Compare to the other country, Netflix’s initial reaction in Indonesia was lukewarm. The platform was only gaining approximately 95.000 subscribers in their first two years.[v] This modest figure could be attributed to Indonesia’s low internet penetration rate, dominance for conventional TV habits, preference for local programs, and the high content piracy in Indonesia.[vi] Netflix’s blockade also exacerbated this by the country’s largest network provider, Telkom, and its 140 million customer base in Indonesia. Telkom blocked Netflix on their network mainly due to Telkom’s argument that Netflix was not fulfilling government regulations such as censorship laws.[vii]
Nevertheless, despite its humble beginning, streaming services have grown exponentially in Indonesia as the country’s VOD revenue in 2020 is mainly from streaming video-on-demand (SVoD) services which accounted for US$140 million.[viii] This is also bolstered by the arrival of other streaming platforms and increasing SVoD subscribers in Indonesia. However, this market is mainly dominated by Netflix as the largest streamer with Indonesian Netflix subscribers doubling every year and projected to have more than 900.000 subscribers at the end of this year.[ix] It can be argued that the reason for this a mixture of public’s preference and the lack of clear governmental stance for international SVoD enterprises. When Telkom announced that it would be blocking Netflix’s service in their network, it was also seen as a way for Telkom to protect Indonesian creative industry facing competition from abroad. Yet, this decision to block Netflix was subjected to criticisms from their network users, which finally resulted in the platform’s unblocking on July 2020.[x] Netflix’s dominance in the industry can be seen as discouraging towards local streaming platforms such as GoPlay and Genflix. The Indonesian public’s inclination towards choosing Netflix as their preferred streaming service has created a monopolistic market in SVoD services in the country.
An Advertisement for Genflix
Another reason for the lack of growth in local streaming services can also be attributed to the government’s polarizing responses towards the rise of streaming platforms in Indonesia. The Communications and Information Ministry was quite cautious at Netflix’s growth and threatened to block Netflix due to the lack of Indonesian content compared to its imported contents. Yet, the Education and Culture Ministry collaborated with Netflix to air some of Netflix’s original documentary on TVRI as a part of its Belajar dari Rumah program.[xi] The government’s inconsistency showed that the government didn’t have a clear stance regarding these incoming streaming services, which can prove to be troublesome if the government wants to promote the local creative industry more. From this, we can see that Indonesia’s response to this issue is reactive instead of responsive. This can hinder the application of appropriate measures that should have been taken in facing the influx of streaming services in Indonesia.
So what can be done to face this issue? Some efforts have tried to lessen Netflix’s influence on the SVoD services in the country. One of them is the creation of local SVoD apps such as GoPlay and Genflix, both of which are focusing on catering to market taste, especially amongst the youth.[xii] If we want to further support the local creative industry, subscribing to local streaming services can be one answer. The increase in subscribers for these local streaming services can help our local products to be competitive vis-à-vis international SVoD services. Other steps that can be taken to boost our creative industry include increasing collaborations with Indonesian filmmakers to either create or put their works on the platform to increase the accessibility of Indonesian films to the masses and create high-quality content to help promote Indonesian film industry. Netflix can also use its platform to cater to Indonesian market and provide a platform for Indonesian filmmakers to compete with other worldwide Netflix catalogs through its Netflix Originals content. To sum it up, every stakeholder in this SVoD industry should find a synthesis to create a comprehensive and sustainable system to promote Indonesia’s creative industry in the long run.
Author: Jasmine Noor Andretha Putri
References
Statista. 2020. Video-On-Demand – Indonesia | Statista Market Forecast. [online] Available at: <https://www.statista.com/outlook/201/120/video-on-demand/indonesia#market-users> [Accessed 21 September 2020].
Media Partners Asia. 2020. Online Video Streaming Minutes In Southeast Asia Skyrocket After COVID-19 Impact According To New MPA Study – MPA VIEWS – Media Partners Asia. [online] Available at: <https://www.media-partners-asia.com/article.php?id=2325> [Accessed 21 September 2020].
CNN Indonesia. 2019. 63 Persen Orang Di RI Nonton Film Bajakan, Terbanyak Indoxxi. [online] Available at: <https://www.cnnindonesia.com/teknologi/20191220142552-185-458689/63-persen-orang-di-ri-nonton-film-bajakan-terbanyak-indoxxi> [Accessed 21 September 2020].
The Jakarta Post. 2020. [UPDATED] Streaming Services Encourage Indonesian Users To Stay Home With Free Access. [online] Available at: <https://www.thejakartapost.com/life/2020/03/25/streaming-services-encourage-indonesian-users-to-stay-home-with-free-access.html> [Accessed 21 September 2020].
Databoks. 2019. Berapa Pelanggan Streaming Netflix Di Indonesia? | Databoks. [online] Available at: <https://databoks.katadata.co.id/datapublish/2019/08/13/berapa-pelanggan-streaming-netflix-di-indonesia> [Accessed 21 September 2020].
Manuturi, V., 2016. Now That Netflix Is Here, What Does That Mean For The Indonesian Audience?. [online] Jakarta Globe. Available at: <https://jakartaglobe.id/business/now-netflix-mean-indonesian-audience/> [Accessed 21 September 2020].
Jakarta Globe. 2016. Telkom Proposes To Unblock Netflix In Exchange For Partnership. [online] Available at: <https://jakartaglobe.id/context/telkom-proposes-unblock-netflix-exchange-partnership> [Accessed 21 September 2020].
Citradi, T., 2020. Telkom Buka Blokir Netflix, Siapa Yang Untung Dan Rugi?. [online] CNBC Indonesia. Available at: <https://www.cnbcindonesia.com/tech/20200708115646-37-171121/telkom-buka-blokir-netflix-siapa-yang-untung-dan-rugi> [Accessed 21 September 2020].
Pertiwi, W., 2020. Jalan Panjang Telkom-Netflix Yang Akhirnya Rujuk Halaman All – Kompas.Com. [online] KOMPAS.com. Available at: <https://tekno.kompas.com/read/2020/07/08/13510067/jalan-panjang-telkom-netflix-yang-akhirnya-rujuk?page=all> [Accessed 21 September 2020].
Faturrahman, I., 2020. Bitter Lesson From Netflix’s Love-Hate Relationship With Government. [online] The Jakarta Post. Available at: <https://www.thejakartapost.com/academia/2020/01/21/bitter-lesson-from-netflixs-love-hate-relationship-with-government.html> [Accessed 21 September 2020].
Prabowo, P. and Cindya, A., 2019. Indonesian Movie Streaming Apps Expand Consumer Market – ANTARA News. [online] Antara News. Available at: <https://en.antaranews.com/news/137643/indonesian-movie-streaming-apps-expand-consumer-market> [Accessed 21 September 2020].
[i] Statista. 2020. Video-On-Demand – Indonesia | Statista Market Forecast. [online] Available at: <https://www.statista.com/outlook/201/120/video-on-demand/indonesia#market-users> [Accessed 21 September 2020].
[ii] Media Partners Asia. 2020. Online Video Streaming Minutes In Southeast Asia Skyrocket After COVID-19 Impact According To New MPA Study – MPA VIEWS – Media Partners Asia. [online] Available at: <https://www.media-partners-asia.com/article.php?id=2325> [Accessed 21 September 2020].
[iii] CNN Indonesia. 2019. 63 Persen Orang Di RI Nonton Film Bajakan, Terbanyak Indoxxi. [online] Available at: <https://www.cnnindonesia.com/teknologi/20191220142552-185-458689/63-persen-orang-di-ri-nonton-film-bajakan-terbanyak-indoxxi> [Accessed 21 September 2020].
[iv] The Jakarta Post. 2020. [UPDATED] Streaming Services Encourage Indonesian Users To Stay Home With Free Access. [online] Available at: <https://www.thejakartapost.com/life/2020/03/25/streaming-services-encourage-indonesian-users-to-stay-home-with-free-access.html> [Accessed 21 September 2020].
[v] Databoks. 2019. Berapa Pelanggan Streaming Netflix Di Indonesia? | Databoks. [online] Available at: <https://databoks.katadata.co.id/datapublish/2019/08/13/berapa-pelanggan-streaming-netflix-di-indonesia> [Accessed 21 September 2020].
[vi] Manuturi, V., 2016. Now That Netflix Is Here, What Does That Mean For The Indonesian Audience?. [online] Jakarta Globe. Available at: <https://jakartaglobe.id/business/now-netflix-mean-indonesian-audience/> [Accessed 21 September 2020].
[vii] Jakarta Globe. 2016. Telkom Proposes To Unblock Netflix In Exchange For Partnership. [online] Available at: <https://jakartaglobe.id/context/telkom-proposes-unblock-netflix-exchange-partnership> [Accessed 21 September 2020].
[viii] Statista. 2020.
[ix] Citradi, T., 2020. Telkom Buka Blokir Netflix, Siapa Yang Untung Dan Rugi?. [online] CNBC Indonesia. Available at: <https://www.cnbcindonesia.com/tech/20200708115646-37-171121/telkom-buka-blokir-netflix-siapa-yang-untung-dan-rugi> [Accessed 21 September 2020].
[x] Pertiwi, W., 2020. Jalan Panjang Telkom-Netflix Yang Akhirnya Rujuk Halaman All – Kompas.Com. [online] KOMPAS.com. Available at: <https://tekno.kompas.com/read/2020/07/08/13510067/jalan-panjang-telkom-netflix-yang-akhirnya-rujuk?page=all> [Accessed 21 September 2020].
[xi] Faturrahman, I., 2020. Bitter Lesson From Netflix’s Love-Hate Relationship With Government. [online] The Jakarta Post. Available at: <https://www.thejakartapost.com/academia/2020/01/21/bitter-lesson-from-netflixs-love-hate-relationship-with-government.html> [Accessed 21 September 2020].
[xii] Prabowo, P. and Cindya, A., 2019. Indonesian Movie Streaming Apps Expand Consumer Market – ANTARA News. [online] Antara News. Available at: <https://en.antaranews.com/news/137643/indonesian-movie-streaming-apps-expand-consumer-market> [Accessed 21 September 2020].
