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Netflix is in talks with Telekom Indonesia about rolling out a service on the telecom network, Reuters reports.
The streaming service has been blocked on Telekom Indonesia since January 2016 because of censorship issues. This situation exemplifies some of the cultural, competitive, and regulatory difficulties that companies face when localizing in foreign markets.
Indonesia's country's censorship board blocked content that it deems not "healthy" for society, and passed a broad anti-pornography bill in 2008 prohibiting adult and sexual content. Websites like Vimeo and Reddit are banned throughout the country. Politically sensitive films, such as the Oscar-nominated documentary The Act of Killing, which is available on Netflix, are also banned.
Majority state-owned Telekom Indonesia is the country's biggest internet service provider (ISP). In a country of more than 250 million people, Telekom Indonesia has about 174 million customers on its cellular network. Although Netflix is blocked on Telekom Indonesia networks, the streaming service is accessible on other telecom networks and carriers.
Offering Netflix on Telekom Indonesia could be mutually beneficial for both companies. For Netflix, it would be a door-opener to Telekom Indonesia’s massive customer base, and to a large growing emerging economy. For Telekom Indonesia, it’s a way to boost its content offering, unveil new pricing schemes, and potentially gain new customers.
Although freedom of the press in Indonesia is high compared to the rest of Southeast Asia, major TV networks in the country are controlled by local business and political elite. Indonesia’s ministry of communications has told Netflix to establish an office in the country and pay local taxes. A flat 25% corporate income tax rate generally applies in Indonesia.
Over the last few years, there’s been much talk about the “death of TV.” However, television is not dying so much as it's evolving: extending beyond the traditional television screen and broadening to include programming from new sources accessed in new ways.
It's strikingly evident that more consumers are shifting their media time away from live TV, while opting for services that allow them to watch what they want, when they want. Indeed, we are seeing a migration toward original digital video such as YouTube Originals, SVOD services such as Netflix, and live streaming on social platforms.
However, not all is lost for legacy media companies. Amid this rapidly shifting TV landscape, traditional media companies are making moves across a number of different fronts — trying out new distribution channels, creating new types of programming aimed at a mobile-first audience, and partnering with innovate digital media companies. In addition, cable providers have begun offering alternatives for consumers who may no longer be willing to pay for a full TV package.
Dylan Mortensen, senior research analyst for BI Intelligence, has compiled a detailed report on the future of TV that looks at how TV viewer, subscriber, and advertising trends are shifting, and where and what audiences are watching as they turn away from traditional TV.
Here are some key points from the report:
- Increased competition from digital services like Netflix and Hulu as well as new hardware to access content are shifting consumers' attention away from live TV programming.
- Across the board, the numbers for live TV are bad. US adults are watching traditional TV on average 18 minutes fewer per day versus two years ago, a drop of 6%. In keeping with this, cable subscriptions are down, and TV ad revenue is stagnant.
- People are consuming more media content than ever before, but how they're doing so is changing. Half of US TV households now subscribe to SVOD services, like Netflix, Amazon, and Hulu, and viewing of original digital video content is on the rise.
- Legacy TV companies are recognizing these shifts and beginning to pivot their business models to keep pace with the changes. They are launching branded apps and sites to move their programming beyond the TV glass, distributing on social platforms to reach massive, young audiences, and forming partnerships with digital media brands to create new content.
- The TV ad industry is also taking a cue from digital. Programmatic TV ad buying represented just 4% (or $2.5 billion) of US TV ad budgets in 2015 but is expected to grow to 17% ($10 billion) by 2019. Meanwhile, networks are also developing branded TV content, similar to publishers' push into sponsored content.
In full, the report:
- Outlines the shift in consumer viewing habits, specifically the younger generation.
- Explores the rise of subscription streaming services and the importance of original digital video content.
- Breaks down ways in which legacy media companies are shifting their content and advertising strategies.
- And Discusses new technology that will more effectively measure audiences across screens and platforms.
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