The King of Expansion
    Category: Special Features By : Sonya Angraini Read : 5628 Date : Wednesday, January 13, 2016 - 07:12:30

    Ahmad Zamroni / Forbes Indonesia

    Ahmad Zamroni / Forbes Indonesia

    The economy may be slowing down, but that’s not stopping media billionaire Hary Tanoesoedibjo. Not only did he celebrate his 50th birthday last year, but he is also expanding his MNC group at a rapid pace. Among his recent initiatives is a new national TV network, new pay channels, new Internet initiatives, new space for his company, new property projects with Donald Trump, and a new political party. These moves would be ambitious in a growth year, but are even more dramatic in a downturn. “It’s all doing well,” says Hary. “We want to increase in both quality and quantity.”

    Consider the context: The economy grew a projected 4.8% last year, down from 5.0% in 2014 and the slowest growth since 2009, according to Bank Indonesia. The stock market is also down 14% for 2015. The shares of PT Media Nusantara Citra, Hary’s main listed firm, were down 22% last year, due to lower advertisement spending. The shares of his satellite broadcaster PT MNC Sky Vision were also down 27% last year.

    However, as an example of MNC’s strength, both companies still managed to retain the same revenue for the first nine months of 2015 compared to the same period in 2014. Media Nusantara posted Rp 5 trillion in revenue, while MNC Sky Vision booked Rp 2.4 trillion. Hary’s achievement in pushing forward with new growth during volatile times, while maintaining his listed businesses well, are among the reasons for his selection as businessman of the year. MNC is now not only the largest media group in the country, but takes claim to being the largest in Southeast Asia.

    The Indonesian media sector was hit hard last year, marked by the closing of several media, both print and TV. Hary, on the other hand, is expanding by adding more channels. Through his PT Global Mediacom, the group launched the free-to-air iNews TV in April last year and the pay TV channel Indonesia Business Capital Market last August.

    To build the iNews channel, Hary had to combine 54 local TV channels into one national network that is a free-to-air channel (FTA). “If it’s a national network, that’s good. You need to have staying power,” says Hary, in an interview in his spacious offices on the top of the MNC building in downtown Jakarta. Meanwhile, he has branched into business news with the Indonesia Business Capital Market channel, which has partnered with the Indonesia stock exchange, to provide news and data on the capital markets.

    With the launch of iNews, Hary’s MNC now has four FTA channels, including RCTI, MNC TV, and Global TV. The four combined have the largest FTA viewership of any media group in the country, roughly 40% of the national audience, well ahead of number two Emtek’s 28% share. Hary is bullish on TV since it still accounts for at least 70% of all national advertising.

    Given MNC’s position as the largest media group in the country, the group should be able to grow revenue from advertising spending by around 5% this year, says Bahana Securities analyst Bagus Adi Yoga Prawira (last year about $1.4 billion of the group’s revenue came from advertising). “MNC has bargaining power for advertising, which they can adjust to support certain channels,” says Yoga. TV still captures most of the ad spending because the largest advertisers are consumer goods companies chasing a mass demographic. He also notes that e-commerce has also contributed to advertising revenue. 

    MNC also now has 22 pay-TV channels. “Now we produce easily 22,000 hours of content per year,” says Hary. Its MNC Sky Vision  has three pay-TV operators: Indovision, OkeVision and TopTV, all of which has around 70% market share, with a total of 2.6 million subscribers. It still has huge opportunity,” says Hary, adding that the market penetration for pay TV is less than 10%.