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Indonesia,Asia listed media companies,APOS 2015

Global Mediacom Spreads Its Bets

Hary Tanoesoedibjo, president and CEO of Indonesian broadcast and pay-TV powerhouse Global Mediacom, is banking on a big investment in broadband, more expansive in-house production and some emerging new revenue streams to shore up long-term growth for his media group.

The diversification comes during a slowdown for Indonesia’s economy, currently weighed down by falling commodity prices. This deceleration will pull back Indonesia’s ad market to about 5-7% growth this year, Hary projected, as domestic corporates cut down on production to offset lower exports.

Global Mediacom’s broadcast arm, MNC Group, owns four ad-supported national channels, including iNews TV, a recently rebranded offering formerly known as Sindo TV, ramping up its news positioning to target upscale audiences. This complements MNC’s other channels: female-friendly RCTI, geared to the mass market; middle-class targeted MNCTV; and youth-oriented Global TV, Hary noted.

This year, all four will be offered as a bundle to advertisers to help drive sales. Meanwhile, shared services can help control costs for iNews, which Hary anticipates reaching positive Ebitda this year.

At the same time, Hary has launched two new in-house production divisions focused on animation and sports respectively, the latter geared up to cover combat sports such as boxing and martial arts. These are in addition to two existing facilities for making entertainment programming, dramas and movies.

broadband support

At the same time, Hary is looking to recharge growth on the distribution side of his business, launching a new fixed broadband network called Play Media which he will cross-sell with his pay-TV business, MNC Sky Vision (MSky).

MSky, a DTH platform, is Indonesia’s biggest pay-TV operation with about 70% share of subscribers but has been experiencing slowing momentum in big cities, while battling competition from pirated services and free satellite dishes that are able to access TV signals from overseas.

Broadband services, together with authenticated multiscreen services, should make MSky more attractive to current as well as potential new subscribers, Hary noted.

“We will roll out our broadband in areas where we have a strong subs base,” he said. “The idea is also to upsell internet to DTH customers.”

The fiber rollout is focused on 600-700,000 homes passed in five major urban centers this year, with two more cities to be added in 2016. Once bundled and multiscreen services gain enough traction, Hary plans to launch standalone internet TV services, possibly starting next year.

He is also eying additional revenue from a variety of other sources, including two JVs: a two-year-old social media venture with Tencent to run an Indonesian version of the WeChat mobile app; and a home shopping partnership with Korean operator GS which Hary is keen to extend into ecommerce, now that logistics and infrastructure are in place.

Domestic launch for Global Mediacom’s Chinese mobile games subsidiary, LeTang, is also a possibility, as mobile broadband reaches more people in Indonesia. LeTang multiplied revenues by five times last year, and is on course for a three-to-four times topline boost in 2015, Hary said.

Hary also remains open to further M&A (potentially including rival cable TV and broadband provider Link Net), having built MNC mainly through acquisition after buying RCTI in 2001.

“The whole history of the group, more than 90% of growth was driven through acquisition, inorganically,” he said. “If there is an opportunity at the right price, we are more than happy to do that.”

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