Article

the International

The greedy giants: Communication Gazette

2014, Vol. 76(4–5) 390–406
! The Author(s) 2014
Centralized television Reprints and permissions:
sagepub.co.uk/journalsPermissions.nav
in post-authoritarian DOI: 10.1177/1748048514524106
gaz.sagepub.com
Indonesia
Ade Armando
Department of Communications, Universitas Indonesia, Indonesia

Abstract
This article essentially shows how the development of commercial television in
Indonesia has conflicted with the country’s media democratization, as illustrated by
the growth of local media in the past 15 years. Compared to print media and radio,
which are decentralized, Indonesia’s television industry is dominated by five large media
corporations that are all based in the capital city of Jakarta. As a consequence, this fails
to leave much growing space to television stations at a local level, which would be
needed to strengthen Indonesia’s democratization. Media owners have successfully
influenced the government in establishing a set of policies that sustain their dominance
of the industry. Players within the television industry have even successfully swayed the
direction of the broadcasting decentralization mandated by the Broadcasting Bill during
Indonesia’s early political Reform period. The influence of these ‘Jakarta television sta-
tions’ stunted the development of television stations outside of Jakarta. Not only it
deprives local actors of the economic value of developing their own television industry
would bring, it also has resulted in the the loss of television’s potential in functioning as a
public sphere facilitating social control over democratic processes. Although the
Reform era promised a new age of media democratization, the centralization of com-
mercial television actually worsened media monopolies that were thought to have been
done away with in post-Suharto Indonesia.

Keywords
Decentralization, Indonesia, media commercialization, media democratizing, media
political economy, television industry

Corresponding author:
Ade Armando, Department of Communications, University of Indonesia. Gedung Komunikasi Lt.2 FISIP UI
Kampus, UI Depok 16424, Indonesia.
Email: armandoade@gmail.com
Armando 391

Introduction
In the past 15 years, since the fall of President Suharto and his authoritarian regime
(the ‘New Order’, 1967–1998), Indonesian society has enjoyed a freer press.
According to Reporters without Borders, Indonesia’s Press Freedom Index ranking
is the second best in Southeast Asia, after Timor Leste. As an illustration,
Indonesia’s 2010 ranking was 35.83, while neighboring Malaysia lagged far
behind at 50.75, the Philippines at 60, and Myanmar/Burma at 94.5.
It is safe to say that in comparison to the previous regime the country’s mass
media have been better at their role as ‘fourth estate of democracy’ intent on
revealing to the public the misconducts of government, parliamentary, and court
officials (see also d’Haenens et al., 1999, 2000). Indonesia’s current mass media also
fulfill their role as ‘public sphere’—a space for the public to discuss various issues
of note.
However, on closer observation one can identify a serious issue related to the
role of the mass media outside of the country’s capital city, Jakarta—especially
regarding the regional democratization processes. It can be argued that outside of
Jakarta the role of the mass media in disseminating information and in becoming a
space for public discussions is only fulfilled by the print media (newspapers and
magazines) and radio stations. On the other hand television broadcasting has failed
to perform this function. This article reveals why this has occurred as well as the
ensuing debates and impact on society.
Most of the television news consumed by the public originates from Jakarta
commercial broadcasts that seldom focus on regional events and do not air regio-
nal political debates and interviews. In addition, local television stations are barely
surviving financially, which hardly puts them in a position to become information
sources for their audiences.
These are significant problems for the democratization process as television
remains the Indonesian public’s medium of choice. According to the Indonesia
Media Guide (2010), while television penetration has reached 93% of the total
population, radio penetration is at only 40%, and newspapers’ penetration at
approximately 25%. The failure of television in acting as counter-power and
public sphere on a regional level is a crucial issue in the country’s democratization
process. In this article it is argued that television decentralization, which will be
elaborated on, can only be achieved through developing the network television
system. This is required to strengthen the capacity of democratic institutions in
each region.
Efforts to develop a decentralized commercial television system have been made
multiple times in Indonesia, both in the transitional, post-Suharto period and later.
However, these efforts were thwarted at every turn, by the lobbying of commercial
television owners who have handsomely benefited from the status quo, and through
weak government policies that can be seen as protecting the interest of the major
television players.
This finding is in line with an observation by Hollander et al. (2009: 55) in their
concluding statements on Indonesia’s television system: ‘In a young democracy
392 the International Communication Gazette 76(4–5)

with a weakly-developed rational legal authority and with a tradition of clientelism,

actual power usually prevails over institutionalized authority.’ These authors show
that the 2002 Broadcasting Bill as well as the Indonesian Broadcasting Commission
(KPI, Komisi Penyiaran Indonesia) are products of the democratization period and
the rise of Indonesia’s civil society. In a brief period during the early Reform era,
the television industry’s interests coincided with those of a civil society in upheaval.
However, the moment this ‘honeymoon’ phase was over, different interests sur-
faced. Hollander et al. (2009: 55) argue that ‘after that, business interests took over
and this development has distanced the commercial television stations from the
debate in Indonesian society about a more transparent and a more democratic legal
framework for broadcasting in Indonesia.’
The experience of television decentralization in Indonesia can only be seen as
confirmation of their inference.

Decentralization and democratization in Indonesia

Indonesia is the world’s largest archipelago with no less than 17,000 islands,
approximately 6,000 of which are populated. Culturally, Indonesia is very diverse.
It is home to 300 ethnic groups with more than 700 local language and dialects.
However, for the more than 50 years that followed independence (1945),
Indonesia’s development remained highly centralized. The central government in
Jakarta remains solely in control of the country’s political trajectory. Social, eco-
nomic, and political disparities between Java and non-Java islands and between
urban and rural areas were common during the Sukarno/Suharto era.
This caused many a secessionist attempt. During President Sukarno’s rule
(1945–1967) there were several rebellions. The largest occurred in the 1957–1959
period, during which the two major provinces on the Sumatra and Sulawesi islands
declared their intention to secede before being defeated by effective military action
from the central government.
During Suharto’s rule, several rebellions also occurred, notably in Papua
and Aceh. A recurring issue that seems to have been a pattern between seces-
sionist attempts is the enrichment of the few through exploitation of natural
resources and unbalanced development. Although the New Order rule brought
staggering economic growth, this growth was mostly concentrated in Jakarta
and in large cities in and outside Java. And the promise of a ‘trickle-down
economy’ that was often made during the New Order’s early stages of devel-
opment never materialized. Development outside large cities and Java con-
tinues to lag behind.
There have been attempts to address this disparity since the Reform period,
however the results are far from significant. The Indonesia Statistics Body
(Badan Pusat Statistik—BPS, 2010) indicates that Indonesia’s economic growth
is still centralized in Java and Bali. The growth share of these two regions is
almost 62%, while Sumatra reaches almost 22%, Kalimantan almost 9%,
Sulawesi 5%, and East Nusa Tenggara and Papua a mere 2–3%.
Armando 393

One of the policies attempting to remedy such disparities is local autonomy.

Since 1999 the Indonesian House of Representatives (DPR) has passed three local
government acts that in essence gives more authority to each province, district, and
city to manage their own government. Based on the Local Autonomy Law, except
for foreign affairs, defense and security, judiciary, monetary, and fiscal matters, all
government authority was transferred to the regions.
In contrast with the centralistic New Order during which all local politics were
managed from on high, today the political practices of each province have become
very dynamic. As an illustration, the Local Autonomy Law mandates that the
people directly elect the provincial governor and mayor. The DPRD (local DPR)
determine budget allocation and control the executive. There has also been a cor-
rective balancing between the Central and Local budgets. Thus, regions owning
natural resources and having their own local income sources can benefit from a
proportionate development budget. Now, regions rich in natural resources receive
a larger income from their own resources. This is significantly different from the
New Order administration, which had authority in determining the distribution of
the income from regional resources. Areas that did not have their own resources
would still receive subsidies from the Central government.
Although the Local Autonomy Law is aimed, among other things, at creating a
more just development, this process is not without challenges. Compared to the
New Order, during which corruption occurred in the Center, Indonesia is now
experiencing ‘corruption decentralization’. This refers to misuse of authority and
budget by local governments. Indonesian Corruption Watch reported that before
mid-2013, no less than 20 governors, 17 mayors, 8 deputy mayors, 18 regents, and
19 deputy regents had been charged for corruption (Republika, 2013).
Furthermore, it is widely reported that many local elections are both opaque
and subject to manipulation. In several regions there are horizontal conflicts related
to religion, race, or ethnicity.
One can easily argue that Indonesia’s decentralization would require good gov-
ernance based on openness and accountability. Thus, it is paramount for govern-
ment monitoring to be done by the public on a local level. Local autonomy can
only serve its purpose if the government is strongly committed to it and aware that
its conduct is being monitored and discussed by the public.
Ideally, democratization in each region should include civil society empower-
ment, which includes the counter-power and ‘public sphere’ function of the local
mass media. While the print media and radio may be said to have been performing
these functions, such is not the case of the star medium: television. In other words,
the current state of the television industry hinders local progress.

Newspapers as a medium for democracy

During the Reform period the growth of the print media across Indonesia reflected
improving press freedom. Not long after the fall of Suharto, several significant
developments occurred within Indonesia’s mass media landscape. In 1999, the
394 the International Communication Gazette 76(4–5)

DPR established the Press Law that in essence guarantees Freedom of the Press by
limiting government intervention. This law ended the many restrictions imposed by
the authoritarian regime: press licenses, limitations on newspaper and magazine
page numbers, restrictions on the numbers of press corporations that were allowed
to coexist in any given region. It also provided for cost reductions, and it simplified
the requirements for establishing a press corporation.
As a result, the numbers of press corporations established since then have dras-
tically increased. The city of Bogor, West Java, 60 km from Jakarta with a popu-
lation of 1,000,000 provides an interesting illustration. During the Suharto era,
Bogor had no newspaper. By 2013, it had three daily newspapers, two local tele-
vision channels, and approximately 30 radio stations (Davies, 2013b)
In 1997 the number of print media in Indonesia was 289. It skyrocketed to 1,381
in 1999, reaching 1,881 in 2001 (Nugroho et al., 2012a). Newspaper and magazine
front pages informing about corruption, power abuse, and bureaucratic inefficien-
cies in government (parliament, police, etc.) and the justice system (e.g., judges) are
a common sight. This ‘muckraker’ tradition is practiced both by Jakarta’ large
media and local newspapers that are often part of media networks based in larger
cities.
Such print media growth was unknown during Suharto’s rule. The New Order
regime was against empowerment of civil society as it saw how it might destabilize
State control. Thus press policies of the period prohibited the development of
political communication facilities all over Indonesia. While there were a number
of local newspapers, the government made sure they were no more than one or two
per region. Soon after Suharto’s fall, aspirations to have more local media were
realized. Many such local media failed to survive, but some did.
It is worth noting that none of these press corporations can claim to be the
‘cross-region’ market leader, owing to the decentralized nature of the print media.
Market-capitalism has resulted in each large newspaper holding a regional share of
the market. Kompas—the largest newspaper in Indonesia—is based in Jakarta and
holds the Jakarta readership. Jawa Pos, the largest newspaper in East Java, dom-
inates Surabaya. In Central Java readership is held by Suara Merdeka, based in
Semarang. Things are the same in other provinces and large cities all over
Indonesia: the region’s leading newspaper is based in that region.

Radio: No longer entertainment only

The development of radio after the fall of Suharto, in comparison, is not as sig-
nificant as that of print media. This is easily explained by the fact that the New
Order regime allowed local-level commercial radio stations to grow. In other
words, radio stations have been decentralized for a while. In 1997, the last year
before the regime change, the number of stations had already reached 717, and it
had ‘only’ increased to 845 by 2007 (Nugroho et al., 2012a).
The Suharto regime treated commercial radio stations differently because it only
gave radio licenses to stations agreeing to broadcast entertainment content
Armando 395

only—no news, no political programs. It can be said that in this period local
commercial radio stations were permitted to grow because they have been success-
fully ‘tamed’. In other words, local radio stations could exist because they were
apolitical and uncritical towards the government. On top of this, Suharto’s daugh-
ter, Siti Hardiyanti Rukmana, was placed as the head of the Indonesian Private
Broadcast Radio Association (Persatuan Radio Siaran Swasta Nasional
Indonesia—PRSSNI), which exercised tight control over radio station practices
(Hill and Sen, 2007).
When the regime ended, these commercial radio stations continued to operate
and grow. But with the alleviation of previously controlling regulations, many local
stations merged or were acquired by large radio networks owned by huge capital
owners from and outside of Jakarta. Despite changes in ownership, local radio
stations that have become part of the national network mostly offer local content.
This continuing focus on local content is a result of 30 years of existence under
New Order rule, during which local stations established a close and interactive
relationship with their audiences. As an illustration, it is common for local radio
stations to open phone lines through which the audience might discuss the state of
their towns with the hosts. This tradition remained strong after the Reform period,
regardless of changing ownership patterns.
One of the important developments in radio is that with the absence of strict
government control, Jakarta and regional stations are now free to broadcast news
and political discussions. Although most stations still focus on entertainment con-
tent, they can now have talk shows on regional political conditions that commonly
involve critical discussions with local, non-government experts. For instance,
during the mayoral elections, candidates are now allowed to take part in radio
debates and interviews, with listeners welcome to comment and ask questions to
their local leaders. So the public in each region can use radio as a major informa-
tion source and political communication tool.

The irony of the television case

Ironically, there has been no such decentralization in the television industry despite
its rapid economic growth.
Indonesia’s television system is highly centralized: only a few Jakarta television
stations have been able to thrive. As a result, the nation’s viewers are permanently
wired to television content originating in Jakarta. The implication of this is little to
no opportunity for the emergence of other stations that might cater to the needs of
regional audiences—content reflecting their interests and tastes. In other words,
television cannot facilitate the development of local democracy.
AGB Nielsen revealed that advertising revenue in 2012 had reached 55.7 trillion
Indonesian Rupiahs (USD5.4 billion), a 24% growth compared to the previous
year. This figure represents 64% of the total media advertising revenue in
Indonesia. Television advertising revenue also significantly surpassed radio adver-
tising revenue (14%) and print media (7%). This growth mainly benefited the 10
396 the International Communication Gazette 76(4–5)

free-to-air Jakarta-based television stations that are permitted to broadcast nation-

ally. These 10 national stations are Rajawali Citra Televisi Indonesia (RCTI), Surya
Citra Televisi (SCTV), Media Nusantara Citra Televisi (MNCTV), Indosiar,
ANTV, TransTV, Trans7, Global, and TV One.
They do not use a network of local, affiliated television stations. In other words,
RCTI, the largest television station in Indonesia, can reach viewers in the furthest
Eastern part of Indonesia, such as Papua, without having to go through local,
affiliated television stations. All broadcast materials seen by Papuan viewers are
the same as those seen by viewers in Jakarta and other cities. The fact that RCTI’s
Jakarta-biased content does not include local content targeted at each region is
precisely due to this national coverage: there are no regional relay stations that
might incorporate locally produced content.1,2
Aside from that, there are also small-scale, local, independent television stations.
These stations were created by taking advantage of the privileges given by the
Reform era government. Even in cities like Yogyakarta, whose population is a
mere three million, there are five local television stations exist. However, unlike
local newspapers and radio stations, they have faced a series of challenges which
have prevented them from growing.

The challenges faced by local television stations

Commercially, local television stations cannot grow because of a lack of economies
of scale, advertising being a case in point. Having to compete with nationwide
stations, they have only one source of income: local business people with interests
in the local market. The amount of potential advertisers is limited, as is advertising
revenue. Advertisers wishing to reach a nationwide audience gravitate naturally
towards the major stations. Transnational corporations such as Unilever would
rather advertise through national television stations in Jakarta to reach viewers and
potential consumers in Palembang, South Sumatra, rather than dealing with the
city’s local stations. Broadcast coverage is crucial, as is the case with commercial
media (Mosco, 2009), since the number of viewers is the main indicator to deter-
mine advertising placement.
A Jakarta national television station has a coverage of more than 100 million
potential viewers. This is accomplished through establishing dozens of transmission
stations across Indonesia, from the furthest West (Nanggroe Aceh Darussalam) to
the furthest East (Papua). As an illustration, RCTI owns 48 such stations, SCTV
47, Indosiar 34, and Metro TV 53. The number of transmission stations and their
potential coverage are the main selling point for advertisers. This wide coverage
justifies high advertising rates, which can go as high as 50 million Indonesian
Rupiahs (4,800 US dollars) for a 30-s slot during prime time.
No local television station can compete. Indonesia’s largest local station—JTV,
is based in East Java—has only 70,000 viewers. With such a limited viewership,
local television stations cannot demand high advertising rates. Consequently, an
average of one to two million Indonesian Rupiahs (97–194 US dollars) per
Armando 397

program is considered profitable for local television stations. Considering that a

station has to shoulder 20 broadcast hours, most of which do not attract a signifi-
cant amount of viewers, this number is insignificant for advertisers.
A comparison between the total advertising revenue of national and local tele-
vision stations further illustrates this dominance. In 2007, according to Nielsen
(2008), RCTI’s advertising revenue was 3.4 trillion Indonesian Rupiahs (USD330
million). SCTV’s was IDR3.1 trillion (USD300 million), Trans TV’s was IDR2.8
trillion (USD270 million), and TPI’s was IDR2.4 trillion (USD230 million). In
contrast, advertising revenues of the largest local television stations in the big
cities were significantly less: JakTV recorded IDR180.6 billion (USD17 million),
O Channel IDR117 billion (USD11 million), JTV IDR52 billion (USD5 million),
and Space Toon IDR48 billion (USD4.7 million).
The figures for local television stations in smaller cities are much smaller. For
instance, Jogja TV’s 2007 advertising revenue was only IDR12 billion (USD1.2
million). In other small cities the figures are even smaller.
In the case of Jogja TV, with a mere IDR30 million (USD2,900) in daily
advertising revenue, having a competitive advantage over national television is
next to impossible. To be cost-effective, programs must be produced under a
tight budget, inevitably compromising production and broadcast technology,
and worse, limiting staff income. This results in rather amateurish programs.
With minimal advertising revenue, the stations can only afford limited budget
production, skills, facilities, and time. Owing to such limitations viewers were
soon disappointed even though initially they had been quite well disposed
towards their local stations. Such amateurish programs are unattractive for
local viewers, who eventually return to Jakarta TV content. With a choice of
high-production value, Jakarta-produced shows and locally produced programs
under the aforementioned limitations, a majority of viewers were never going to
choose the latter. At that point, even local advertisers would stop advertising
with local televisions.
In such conditions, local TV stations can hardly be expected to act as local
vehicle for more democracy. The public in areas outside of Jakarta cannot utilize
television as an arena to conduct discussions, monitor local officials, or keep
abreast of important regional events. However, not only are local politics inaccess-
ible for non-Jakarta viewers, but all they hear about is Jakarta politics, local, or
otherwise. All of national television’s content has the ‘Jakarta perspective’. On
national television, all Indonesian viewers watch the same broadcast content,
including the news.
As the big 10 national television stations have to serve a national market, local
politics are rarely treated as important. The rare occasions in which they are rep-
resented on national television usually involve sensational events such as riots
during gubernatorial elections. These negative portrayals are presented in short,
discontinuous news items. Local political actors cannot comment on their local
government as they do not have access to national television stations, which tend to
largely ignore local issues.
398 the International Communication Gazette 76(4–5)

We have shown how viewers outside of Jakarta are deprived of televised infor-
mation on their own area’s economic, social, and political conditions. This would
not be the case if the 10, Jakarta-based, national television stations were required to
implement a network system. In other words, were they required to establish or
cooperate with local television stations, there would in effect be local television
stations in each region. Such stations would be part of a network which would
broadcast local content in addition to the national programming. Only when such a
network system is implemented will television stations in each region be able to act
as ‘the fourth estate’ and create a ‘public sphere’ for their local audiences.
The next section will show that attempts at decentralizing commercial TV sta-
tions are continuing but that they are thwarted on a regular basis.

Indonesia’s television system

If we trace the history of Indonesia’s television system, we discover that broadcast
centralization was not one of its early characteristics. Indonesia’s first television
station, TVRI, which held a monopolistic position for 25 years (1962–1987), had in
fact long developed a network television system. This state-owned station had
already created a decentralized network by establishing regional television stations
in each province.
It needs to be emphasized that, despite this network system, the regional stations
were never independent. All policies, management, budgeting, and programming
were directed from the center. Regional stations, in essence, implemented central
directives. Nevertheless, the network system made it possible to broadcast local
content. And TVRI fostered content diversity by dedicating at least 2–3 h to its
local audience.
TVRI could not have been expected to effectively monitor government action
in the various regions of Indonesia. Under the New Order regime TVRI was a
state television station that focused on government propaganda. It was clearly
part of the State apparatus (Kitley, 2003: 97). Critical political discussions and
negative news regarding development programs and the government in general
were seldom broadcast. Since the Reform era, TVRI stations have effectively
turned into public stations. However, due to a number of factors and chal-
lenges, TVRI has failed to grow into a critical, independent outlet. It can be
fairly said that in the last 20 years TVRI has lost its audience to commercial
television programs.
In the context of commercial television, even since its founding, the system was
never designed to move towards centralized broadcasting. Indonesia was intro-
duced to commercial television in 1987, with a first license given to commercial
station RCTI. This step was taken in the context of a wave of broadcasting deregu-
lation, liberalization, and commercialization that ran across Asia. Three years ear-
lier, one of Indonesia’s nearest neighbors, Malaysia, has also launched its first
private station, TV3. In Thailand and the Philippines, commercial television has
existed since the 1950s. Still, its growth accelerated in the 1990s (Kitley, 2003).
Armando 399

It needs to be emphasized that RCTI, similar with TV3 in Malaysia, was estab-
lished without any legislative foundation. The decision allowing this private station
to go on air strayed from Indonesia’s broadcasting policy blueprint (Armando,
2006; Hill and Sen, 2007; Kitley, 2000). It was actually a pragmatic response with
respect to Suharto’s second son, Bambang Trihatmojo, who had become the head
of Indonesia’s largest corporation, Bimantara, under which RCTI was founded.
Trihatmojo saw a promising business opportunity, with Indonesia’s economic
growth giving birth in large cities to a growing middle class accustomed to follow-
ing global news through satellite discs and VHS rentals (Hill and Sen, 2007). These
were the viewers who felt that TVRI has lost its appeal because it was primarily
airing developmentalist programs. The president granted the request, which gave
birth to RCTI.3
RCTI’s brief was to broadcast pay-TV programs in Jakarta only. Initially,
RCTI’s offer could only be accessed by Jakarta elites who subscribed by buying
a decoder machine and paying a USD15 monthly fee. Compared to TVRI, RCTI
enjoyed many privileges. RCTI could derive revenue from advertising and could
broadcast imported programs without a clear quota. The idea was that such a setup
would have no impact on the lifestyles of the poor and would not create social
resentment.
The government also permitted the establishment of commercial television sta-
tions outside of Jakarta, but still under RCTI’s scheme: as pay-TV stations whose
programs were only accessible to elite consumers who could afford to subscribe.
The second commercial television station was SCTV, located in one of East Java’s
richest cities, Surabaya. The third station, ANTV, was established in Lampung,
South Sumatra.
Although this was never solidified in a formal regulation, it seemed then that the
government was still attempting to avoid monopoly ownership. RCTI in Jakarta
was owned by Suharto’s first son. SCTV in Surabaya was owned by Henry Pribadi
and Suharto’s cousin Sudwikatmono, while ANTV was owned by Abu Rizal
Bakrie, a successful businessman close to Suharto.
The illustration above reveals that in the early stages of commercial television
development, the pattern was not centralistic. What changed the trajectory of
Indonesia’s television system was the creation of so-called ‘education television
station’ TPI by Suharto’s daughter, Siti Hardiyanti Rukmana, in 1990. Under
the notion that TPI performed an educative mission in reaching students in various
regions outside of Jakarta, Rukmana requested that the station be given permission
to air freely, with national coverage. TPI’s income did not come from subscribers,
as in the case of RCTI, nor from state subsidies, as that of TVRI, but from
advertising.
When the government granted TPI’s request, conditions soon changed. RCTI
viewed TPI as its main potential rival in gaining advertising, and it urged the
government to change the regulation that restricted it to local broadcasting.
RCTI was also willing to air freely (free-to-air) and only gain income from adver-
tising, as long as it was allowed to reach areas outside of Jakarta.
400 the International Communication Gazette 76(4–5)

Within the next 2 years, the government drastically changed its policies on the
broadcast coverage of commercial television. And this did not apply to RCTI. All
stations—including SCTV and ANTV—were permitted to air nationally. The gov-
ernment argued that this policy change was meant to even out access to commercial
television by the public. The argument on the dangers of consumerism was never
heard again.
The year was 1991, and the centralization of the commercial television system
had begun. The government permitted each television station in Jakarta to reach
viewers in other regions by means of the Palapa domestic satellite.4 The govern-
ment-owned satellite rebroadcast to each region, where relays beamed the pro-
grams directly to the audience’s home. Thus, unlike TVRI, the large commercial
television stations did not have to establish regional stations or cooperate with
local stations in each region to broadcast nationally.
Consequently, SCTV and ANTV moved their broadcast studios to Jakarta for
business efficiency reasons considering Jakarta was the center of Indonesia’s eco-
nomic activity. In 1993 fifth commercial station Indosiar was founded, still in
Jakarta. A year after the fall of Suharto, the new government under President
BJ Habibie allowed the creation of five more commercial stations. All new stations
followed the same pattern: Jakarta-based, free-to-air, and broadcasting nationally.

The 1997 Broadcasting Bill draft as the first corrective effort

Developments that occurred in the first years of private broadcasting determined
the direction towards the centralized commercial television system we know today.
However, attempts to correct this were not absent. Unfortunately, media owners
always managed to thwart them.
Closer to the fall of Suharto, in 1998, an attempt was actually made to remedy
the centralistic direction. In an uncharacteristically political move, MP’s from
ruling political party Golkar (Golongan Karya, or the ‘Party of the Functional
Group’)5 proposed the Broadcasting Bill Draft in 1997. The Bill Draft was seen
as urgent because it had become clear that the TV industry had expanded by leaps
and bounds, outgrowing the relevant regulations.
However, the budding commercial stations instantly resisted the Bill Draft. The
BBD included several controversial notions, not least that of restricting the cover-
age of Jakarta’s stations. The instant rejection was excessive as the Bill was actually
moderate in that it proposed to limit maximum broadcast coverage to 50% of the
country’s population. The aim was to open up opportunities for the founding and
development of commercial television stations in other regions. If the broadcast
coverage limit were imposed upon Jakarta television stations, their broadcast could
only reach the Java population whose amount is approximately 50% of the total
population. According to its supporters, had the provision become law, it could
have broken the Jakarta stations’ broadcasting monopoly. New commercial tele-
vision stations outside of Jakarta would have began proliferating in their regions.
This would consequently restrict the broadcast of all Jakarta and Java stations to
Armando 401

their own regions. To enter the Sulawesi market, for instance, ‘Central stations’
must cooperate with regional corporations—with implications for advertising rev-
enue as well.
The Bill Draft was the first Law in the history of the New Order which the
President refused to sign. He never publicly explained his reasons behind the refu-
sal, but it was mentioned by the media that Suharto had insisted some of its content
be ‘amended’ by the DPR, including the restriction on broadcast coverage.
However, interviews with sources involved in the debates at the DPR indicate
that Suharto’s decision was obviously influenced by the anxiety of national televi-
sion station owners who were in fact part of his Palace circle. Quoting Kitley (2003:
105): ‘In this instance, the President demonstrated limited tolerance for measures
which inhibited the business activities of his immediate family.’ The 1997
Broadcasting Bill was finally promulgated after several fundamental amendments
(see also Hollander et al., 2009). The article on broadcast coverage restriction was
eliminated. The Bill actually included articles that further strengthened Jakarta’s
dominance in that commercial television stations could now only be established in
Jakarta.

New regime, old interests

The next big step taken to decentralize the Indonesian television industry took
place in 2002 with the introduction of the new Broadcasting Bill. This occurred
on a backdrop of rising competition between television stations, which involved
new actors who were also growing economic players in Indonesia. In 1999, the new
democratic government under President BJ Habibie issued five permits for new
commercial television stations. Then, there were 10 national television stations
competing against one another for a fixed amount of advertising revenue. As a
general note, due to mergers and acquisitions, several owners originally from
Suharto’s closest circle were gradually eliminated. RCTI and TPI—both of
which were initially owned by Suharto’s children—were bought by Hary
Tanoesoedibjoa, a businessman of Chinese descent who would later own one of
Indonesia’s largest conglomerates. Eddy and Fofo Sariaatmadja, two other busi-
nessmen of Chinese descent, bought SCTV, previously owned by Suharto’s in-laws.
Not unlike the trends noted in the global media industry, Indonesia’s television
sector has seen its share of horizontal integrations. At the end of 2012, ownership
of the 10 stations that had initially competed against one another was concentrated
into five large conglomerates: Hary Tanoesoedibjo now owns three stations,
Chairul Tanjung owns two, Fofo and Eddy Sariaatmadja own two, Abu Rizal
Bakrie owns two, and Surya Paloh owns one. These five conglomerates and their
business groups remain major actors in Indonesia’s economy. Tanoesoedibjo and
Tanjung are 2 of the 10 richest people in Indonesia by 2012. Bakrie, Paloh and
Tanoesoedibjo gradually joined the other business people directly involved in
national politics, whether by being a member of a political party or even running
in the presidential elections. This political and economic power wielded by
402 the International Communication Gazette 76(4–5)

commercial television station owners explains the failures in implementing the 2002
Broadcasting Bill. The Bill, in essence, provided for broadcasting democratization
that could significantly change Indonesia’s broadcasting structure.
There were several important ideas in the 2002 Broadcasting Bill (see also
Hollander et al., 2009; Kitley, 2000, 2003). Aside from shifting TVRI’s position
from a State television station into a public television station, the Broadcasting Bill
introduced the country’s first broadcasting regulatory body, called the Indonesian
Broadcasting Commission (Komisi Penyiaran Indonesia—KPI). Its members were
selected by the DPR. The idea was that broadcasting regulations would no longer
be issued by the Ministry of Information, as was the case during the New Order.
The Law stipulates that KPI members must be civil representatives who have
knowledge and concern regarding the broadcasting industry—not representatives
of the industry or the government. In terms of the broadcasting structure, the Law
establishes prohibition of acquisition, restricting ownership concentration and lim-
iting cross-ownership. With respect to broadcasting decentralization, the Law
implies that each national commercial television station must develop a network
television system. This is done by stipulating that stations have two options: to
become a local television station or a network television station. In the latter case,
national commercial television stations must reorganize their broadcasting struc-
ture. To reach all of Indonesia’s market, they must develop or cooperate with local
television stations in each region. With this Law, TVRI will be the only station
allowed to broadcast nationally without going through local stations.
Because of its broadcasting democratizing spirit, the 2002 Broadcasting Bill has
been resisted from the start. Jakarta commercial television stations continue to
fight it, arguing that it is undemocratic and a threat towards freedom of expression.
They do not fear to spread misinformation, saying that should the Bill be imple-
mented, audiences outside Jakarta could no longer view Jakarta broadcast content
(Armando, 2011). During the peak period of the controversy, Jakarta television
stations broadcast talk shows in which guests were asked to speak as if there were a
backlash building against the Bill. They built relationships with the government to
turn it into an ally. The attempt was successful, as illustrated by then
President Megawati’s reluctance to promulgate the Bill. But in contrast with the
New Order, the absence of the President’s signature is not enough to cancel the
promulgation.6
A turning point was reached when the broadcasting industry suggested a judicial
review of the Broadcasting Bill by the Constitutional Court (Mahkamah
Konstitusi—MK). Through one of the best lawyers in Indonesia the broadcasting
industry asked the Court to cancel the Broadcasting Bill under the argument that it
conflicts with the Constitution of Indonesia (Undang-undang Dasar 1945—UUD
1945), particularly in relation to freedom of expression. The Court’s decision was
contradictory. On the one hand, it refused to cancel the Broadcasting Bill. But, on
the other hand, it issued one decision with profound implications: the Court
declared that the party that should issue the Law’s implementation regulation
was the Government, not the Broadcasting Commission (KPI).
Armando 403

This was highly significant as it returned the authority to set broadcasting regu-
lation to the government. Since then, the government issued several regulations
that not only reaffirm governmental power over the broadcasting system, but also
show a bias in favor of the industry. It can be properly argued that although the
television industry’s hope to have the Broadcasting Bill cancelled was dashed, its
interests are in fact served by the government’s reluctance to implementing the Bill
with any consistency.
The decision, issued in 2004, has made it possible for the government to issue a
set of regulations that hinder the effective implementation of the Broadcasting Bill.
The government issued regulations that ‘demoted’ KPI’s authority to not much
more than monitoring broadcast content, and even then without authority to carry
out sanctions other than reprimands. The government has now the authority to
issue broadcasting permits which contribute to blurring the rules regarding control
over ownership concentration and cross-ownership.
In terms of broadcasting decentralization, the government has never issued a
clear regulation concerning the broadcasting network system which commercial
stations were supposed to create. The Broadcasting Bill provided for a transition
period for its own implementation that ran until 2007. However, the government
made attempt to gradually decentralize the television broadcast system during this
period. The government never required the national television stations in Jakarta
to develop network stations in the regions as mandated by the Bill. Large television
stations in Jakarta took advantage of this opportunity to air freely without regard
for the Bill. These stations continue to expand without consequence, despite violat-
ing the Bill’s provision on the network system. In 2007—the end of the transition
period—the media owners urged the government to postpone the implementation
for the next five years (2012), citing unpreparedness to comply.
Then Minister of Communication and Information, Muhammad Nuh stated
that he understood the difficulties faced by television stations and was willing to
postpone implementation, yet again, for 2 years. However, this period was not used
by the government to monitor the industry’s progress in the transition towards a
networked system. In 2009, a new minister came into office and stated straight off
that the network system must be implemented as soon as possible. But the Minister
never mentioned a clear time frame and has taken no serious step to implement the
transition since. In 2012, the DPR stated its intention to revise the Broadcasting
Bill, recognizing that in the past 10 years it was never implemented effectively.
A team comprising of communication experts was formed.7 The draft bill which
was finally produced by the DPR at the end of 2012 pushed the decentralization
agenda by including a set of detailed stipulations regarding the obligation for
television stations to develop or cooperate with local television stations if they
wanted to continue national broadcast. However, by mid-2013, there had been
no follow up on the draft bill. In various public meetings, government representa-
tives expressed their view that the draft bill would be corrected because it was too
‘Western’. At the time of writing this article, public debates regarding the new Bill
have remained unheard of.
404 the International Communication Gazette 76(4–5)

In such a context, television decentralization plans in Indonesia remain

vague at best. Ten television stations owned by five large corporations continue
to dominate nationwide broadcasting. In parallel to that, the democratizing process
across Indonesia is still in progress without benefit of the TV pushing the reform
agenda.

Conclusions
This article shows how the main players in the television industry have constantly
hindered broadcasting decentralization and democratization, both under the New
Order regime and in the Reform era. There have been at least three vital attempts
to build a decentralized commercial television system. Firstly, in its early stages,
commercial television was initially designed to operate locally. Secondly, the first
Broadcasting Bill introduced close to the end of the New Order provided for the
development of a commercial television system outside of Java. Thirdly, the
Reform era Broadcasting Bill also recognized the need to develop a decentralized,
networked commercial television system.
However, these attempts fell short because of the opposition of major players
who had built good relationships with the government. In the first case, develop-
ments toward centralization occurred due to the influences of business people from
within the Palace circles. In the second case, the lobbying of the television tycoons
went on throughout the drafting process of the Broadcasting Bill in parliament.
Even worse, in the third case intervention also occurred after the promulgation of
the decentralization Bill, in the form of a call for government regulation to imple-
ment the Bill’s content. As a result, not only does television economic growth
remain concentrated in the hands of a few Jakarta players, with little space given
to the development of local television stations, but television as a medium has also
lost its function as a ‘public sphere’ that is sorely needed by Indonesian citizens in
various regions in the country.
These significant changes went through smoothly because the government
accommodated the interest of the national commercial television stations.
During the New Order era, this was easily understood as influence from Palace
business people. However, in the Reform era, resistance to change manifests itself
in more complex ways.
The first side of the argument would be that the government and state institu-
tions (i.e., Constitutional Court or Parliament) do not feel the urgency of broad-
casting decentralization because it brings no political gains. Furthermore, the
government might perceive that it would be easier to control a small group of
station owners in Jakarta than regulate hundreds of local television stations
across Indonesia—which will be the case once the networked television system is
in place. This sentiment should not be taken slightly considering that there still is a
widespread sentiment, dating back as far as the colonial period, that decentraliza-
tion would break up the country. However, the government also has economic
interests in preventing the implementation of the Bill. It should be remembered that
Armando 405

going against the will of nationwide commercial television stations powerful

enough to set the public agenda is not free of risk.
Such a convergence of interests among media owners and the State is a consid-
erable hindrance to the development of a civil society. This relates to the effort in
empowering institutions needed to perform effective democratization all over
Indonesia. Referring to Jurgen Habermas’s public sphere concept, democracy in
Indonesia needs media that would provide spaces for the public to freely interact
and engage over matters of public concern (Nugroho et al., 2012b: 16). In this sense,
the media should become the public sphere for every citizen to discuss, deliberate,
and eventually form public opinion. This ideal situation can only be achieved
through availability of the needed democratic instruments—one of which is the
mass media—throughout the vast regions in Indonesia. Some might argue that
the presence of local television stations as part of a large television network would
not bring much change considering that these stations will still be under the control
of Jakarta players. This article challenges this skepticism by arguing that the pres-
ence of local television stations would open up opportunities for local journalists
who would then become the watchdogs for local institutions. The need for providing
local content that would attract local audiences would also inevitably give incentives
for the station programmers to produce various types of talk-programs, documen-
taries or features relevant with public concerns. Regardless of the interests of Jakarta
media owners, these local workers can build a public sphere in their respective
areas. Although this is not an instant solution, it creates opportunities for local
television empowerment that are impossible in today’s centralized system. It is a
sad fact that there is no space for such empowerment in the system today.

Funding
This research received no specific grant from any funding agency in the public, commercial,
or not-for-profit sectors.

Notes
1. A public sphere is referred to as ‘a space in which diverse members of a society freely
interact and address common concerns outside formal public institutions’ (Littlejohn and
Foss, 2009: 300).
2. As a general note, in addition to the 10 major national TV stations, there are several
networks with a very limited brief. These include: Kompas TV, B Channel, and NET TV.
In contrast to the big 10, these three, established in the last 5 years, work in cooperation
with local television stations. However, considering their limited coverage and business
clout, they are not discussed further in this article.
3. In its early years, RCTI did not have a license to air nationally. Suharto was known to be
an authoritarian leader whom nobody would dream of disobeying. However, at the same
time, he was also a President with a rural background who intended to project an image of
a leader for ‘the people’. Therefore, although he permitted the creation of the commercial
television station, he forbade RCTI from showing consumerist lifestyles to Indonesians.
4. The Palapa satellite is a domestic satellite launched by the Indonesian government in
1976. Initially, Palapa was mostly used to by TVRI to reach all regions of Indonesia.
406 the International Communication Gazette 76(4–5)

However, Palapa was also leased to commercial television stations and even to stations in
neighboring Singapore and Malaysia in an attempt to capture Indonesian audiences.
5. Golkar was the dominant political party, which had always won a majority of the votes in
Indonesia’s six general elections between 1971 and 1997.
6. More elaboration on this matter is available in Armando (2011).
7. Members included author and intellectual Amir Effendi Siregar and Universitas
Indonesia professor Sasa Djuarsa Sendjaja.

References
Armando A (2006) Privatisasi Pertelevisian Indonesia: Antara Dinamika Internal dan
Perkembangan Global. [Privatization of Television in Indonesia: Between Internal
Dynamics and Global Development]. PhD thesis, Universitas Indonesia, Indonesia.
Armando A (2011) Televisi Jakarta di Atas Indonesia [Top Jakartan television in Indonesia].
Jakarta, Indonesia: Bentang.
Biro Pusat Statistik (2011) Statistics Indonesia: Statistical Yearbook. Jakarta: Biro Pusat
Statistik.
Davies AG (2013a) Local television stations in Indonesia. Asiawaves. Available at: http://
www.asiawaves.net/indonesia-local-tv.htm
Davies AG (2013b) Radio stations in Bogor, West Java, Indonesia. Asiawaves. Available at:
http://www.asiawaves.net/indonesia-local-tv.htm
d’Haenens L, Gazali E and Verelst C (1999) Indonesian television news-making before and
after Suharto. Gazette 61(2): 127–152.
d’Haenens L, Verelst C and Gazali E (2000) In search of quality measures for Indonesian
television news. In: French D and Richards M (eds) Television in Contemporary Asia.
London: SAGE, pp. 197–232.
Hill DT and Sen K (2007) Media, Culture, and Politics in Indonesia. Jakarta: Equinox
Publishing.
Hollander E, d’Haenens L and Bardoel J (2009) Television performance in Indonesia:
Steering between civil society and market. Asian Journal of Communication 19(1): 39–58.
Kitley P (2000) Television, Nation, and Culture in Indonesia. Athens, OH: Ohio University
Press.
Kitley P (ed.) (2003) Television, Regulation and Civil Society in Asia. New York, NY:
Routledge Curzon.
Littlejohn S and Foss K (2009) Encyclopedia of Communication Theory. Singapore: SAGE.
Mosco V (2009) The Political Economy of Communication. London: SAGE.
Nugroho Y, Putri DA and Laksmi S (2012a) Mapping the Landscape of the Media Industry
in Contemporary Indonesia. Report Series. Engaging Media, Empowering Society:
Assessing Media Policy and Governance in Indonesia through the Lens of Citizens’
Rights. Jakarta: CIPG and HIVOS.
Nugroho Y, Putri DA and Laksmi S (2012b) Media and the Vulnerable in Indonesia:
Accounts from the Margins (Report Series. Engaging Media, Empowering Society:
Assessing Media Policy and Governance in Indonesia through the Lens of Citizens’
Rights). Jakarta: CIPG and HIVOS.
Persatuan Perusahaan Periklanan Indonesia (2010) Indonesia Media Guide. Jakarta: P3I.
Reporters without Borders Press Freedom Index. Available at: http://en.rsf.org/press-
freedom-index
Republika, 21 July, 2013.