Transnational satellite television and advertising in ...

Journal of Marketing Communications

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Transnational satellite television and advertising in South East Asia Amos Owen Thomas To cite this article: Amos Owen Thomas (1998) Transnational satellite television and advertising in South East Asia, Journal of Marketing Communications, 4:4, 221-236, DOI: 10.1080/135272698345771 To link to this article: http://dx.doi.org/10.1080/135272698345771

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JOURNAL OF MARKETING COMMUNICATIONS 4 221–236 (1998)

Transnational satellite television and advertising in South East Asia AMOS OWEN THOMAS

Downloaded by [Stockholm University Library] at 03:25 05 February 2016

School of Marketing and Management, Grifth University, Gold Coast, Qld9726, Australia

New media technologies such as satellite television allow international marketers to bypass national broadcasters and regulatory structures and advertise their goods and services direct to consumers and businesses on a regional or a global basis. In Asia, claims by the pioneering broadcaster StarTV to deliver pan- Asian e´ lite audiences were met by a range of regulations on access by governm ent concerned about m edia im perialism . Contrary to expectations, the advent of transnational television in South East Asia in particular has m et with m inimal response from m ultinational marketers and their advertising agencies operating in the countries under the satellite broadcast footprints. Utilizing qualitative m ethods this exploratory research on the advertising and broadcasting industries of Indonesia suggests that the domestic m edia scene, im port regulations on program m ing and comm ercials, local cultures, level of afuence, agency –client structures and product categories are am ong the m ultiple factors inuencing the strategic choice between domestic versus global advertising. In the case of this developing country which adopts an ‘open skies’ policy towards transnational satellite television, the ndings dissent from the simplistic ‘globalization of markets’ paradigm and calls for more considered analysis of the m ultiple factors which govern the utilization of the new medium by advertisers. KEYWOR DS: advertising; transnational satellite television; globalization; media imperialism INTRODUCTION Growing politicoeconomic regionalism, new broadcast technologies and the deregulation of industry worldwide in the 1980s and 1990s have spurred the argument that the globalization of advertising is now imperative, particularly for multinational corporations (MNCs) exporting internationally branded products and services. The advent of satellite television – a globalizing medium par excellence – was expected to revolutionize advertising, yet the decades-long debate over global versus local advertising strategy in international marketing still remains unresolved. If quantitative studies on comparative advertising have failed to provide denitive answers, perhaps qualitative analysis of the impact in Asia of commercially funded, satellitedelivered transnational television may provide an alternative perspective on the issues involved. Thus, this paper looks at the response to this new transnational medium in a South East Asian country as perceived by four key players in that market: advertising agencies (and their clients), television broadcasters (domestic and international), governments (policy makers 1352–7266 # 1998 Routledge

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and regulators) and research organizations (market and academic). Utilizing qualitative interviews, secondary data sources and participant observation, this exploratory research builds a critical case study on Indonesia, a country noteworthy in Asia for its ‘open skies’ policy towards transnational satellite broadcasting. This paper also seeks to illuminate the complexity of factors which govern the strategic issue of localizing or globalizing advertising for export markets.


LITERATURE REVIEW In pronouncing the globalization of markets inevitable because it was being driven by homogenization of consumer cultures and manufacturing economies of scale, Levitt (1983) reignited a long-standing debate. The standardization of advertising internationally had been advocated since the early 1960s and somewhat successfully demonstrated at least in the European context at that time. As a result of later comparative studies, particularly in the 1970s, a more moderate approach was adopted in which specic sociocultural factors were identied as critical to the standardization versus localization decision for export markets (Green et al., 1978). This middle road stated that global advertising was suitable for certain product categories, among similar market segments across most countries and under specic conditions. While Levitt (1983) believed in the increasing homogenization of wants worldwide driven by technological change, there were dissenting views expressed that the world may not be homogenizing culturally and evidence cited that there might be a quite opposite trend (Onkvisit and Shaw, 1987). Wind (1986) criticized Levitt (1983) systematically for, among other things, lack of empirical evidence of homogenization of consumer wants, the irrelevance of production economies given current technology and failing to recognize that synergy of multicountry operations does not depend on standardization. The alternative model Wind (1986) proposed had MNCs making strategic choices in each key decision area such as positioning, product, promotion and distribution and as to whether to standardize, localize or ‘cluster’, which means standardizing for groups of countries. However, Hill and James (1991) claimed that support for Levitt’s (1983) globalization thesis could be found in the fact that products and promotions were generally considered more transferable by the subsidiaries of MNCs in export markets than was realized by their headquarters. Much research has been directed at identifying the cultural gaps which may need to be bridged in global advertising. Domzal and Kernan (1993) observed that personally relevant products such as food and clothing seemed suitable candidates for globalized advertising, particularly among the economic e´ lite worldwide and the post-war=post-modern generation in developed countries. While Zandpour et al. (1994) identied Hofstede’s (1984) four dimensions as affecting the style and content of television advertising in eight countries surveyed, they also found that product types, level of advertising expenditure, the presence of US advertising agencies, government regulations and the availability of trained advertising personnel, among other factors, were equally signicant inuences. Research conducted when satellite television was introduced into Europe found that advertising agency executives tended to believe that it would become the leading advertising medium while their marketing clients disagreed (Howard and Ryans, 1988–1989). However, both groups agreed that it would afftect agency–client relationshipts as local agencies lost clients to global agencies, as pan-European campaigns increased despite the cultural heterogeneity of the region and as marketing activities grew increasingly globalized and


TRANSNATIONAL SATELLITE TELEVISION AND ADVERTISING

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centralized. While they perceived a number of barriers to global advertising such as language, culture and regulations, the advertising and marketing executives believed that satellite television would eventually lead to control of strategy, media planning, budgeting and creativity by their corporate headquarters. While previous research on the impact of cable television on broadcast television in the US has been inconclusive, Glascock (1993) found that, in the US, the new medium actually increased advertising spending overall over the 1980s rather then eroding the share of advertising of other media. Although cable and satellite channels may offer improved targeting by specialist consumer interests and geographic location, they also tend to have small ratings. Baldwin et al. (1996, pp. 231–57) believed that this required advertisers to purchase spots across many channels, which is administratively expensive for agencies even though the total media costs are no higher than on terrestrial television. No corresponding research is known to have been done in South East Asia since the introduction of transnational satellite television. Anderson (1984) carried out the last major study of the advertising industry within the region and concluded that the transnational advertising agencies wielded power over the cultural values of selected nations in a neocolonial form of domination. While a recent publication edited by Frith (1996) surveys the state of domestic advertising of 11 nations in East and South Asia, the contributors did not address the impact of transnational satellite television on advertising. Tai (1997) examined the use of neither a fully standardized or differentiated advertising in the ‘Chinese markets’ of Asia, but again made no reference to the new transnational medium. Thus, this paper revisits surveys of the South East Asia region and analyses the advertising scene of one country, Indonesia, in the radically different sociocultural, economic and technological environment of the 1990s. TRANSNATIONAL TELEVISION IN ASIA The arrival of transnational broadcast satellites caused some concern among governments in the region about media imperialism. The pioneer and market leader, StarTV, commenced broadcasting in 1991, beaming its ve channels from the AsiaSat1 satellite which has two footprints stretching across much of Asia. In July 1993, News Corporation, better known as R upert Murdoch’s global media empire, bought a controlling 64%interest from Hong Kong’s Hutchinson Whampoa group of companies and in 1995 purchased the remaining 36%. Notable US channels CNNI, ESPN, Discovery and HBO also commenced broadcasting in Asia in 1993 but, unlike StarTV, they were in encrypted form to generate subscription revenue. They rst utilized the Indonesian-owned satellite network Palapa, long used for domestic broadcasting by that country as well as Malaysia, the Philippines and Papua New Guinea, before later utilizing other satellites for better coverage of the continent. There are US interests in regional channels specializing in business news, such as Asia Business News (ABN) owned by a consortium including the Time–Warner group and CNBC Asia owned by the American network NBC. As new satellite platforms have been launched over the mid1990s the number of transnational channels as well as domestic television channels broadcasting via satellite in Asia have escalated (see Table 1). For the purposes of this research, transnational television is dened as any broadcast by stations owned by MNCs which is usually transmitted via satellite and sometimes retransmitted by local cable. It is also aimed deliberately at attracting an audience across national borders within a region or satellite broadcast footprint and is not subject to the

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TABLE 1.

Major transnational satellite television broadcasters in Asia

Ownership

News=Information

Entertainment=Films

Global–commercial

CNNI NBC=CNBC Discovery

Regional –commercial

ABN CTN

ESPN MTV=Viacom HBO TNT=Cartoon MGM Sony StarTV CETV KTV ART

National–public

BBC World Deutsche Welle Canal France Int’l

General

TVBS ZeeTV MBC Orbit CCTV-4 DDI TCSI NHK AustraliaTV

regulatory controls of those countries where its broadcast signals may be picked up. Domestic television refers, in this paper, to any local or national broadcast by channels owned either by governments or local corporations subject to government regulation, usually terrestrially, though sometimes via satellite. However, unlike transnational television it is aimed at audiences within the country, even though there is often spill-over of the signal into neighbouring countries, particularly the border regions.

Regulatory context Concern among developing countries over media imperialism by the growing number of transnational broadcast satellites has caused their governments to respond with policies and regulations, either proactively or reactively. This paper proposes a six-point continuum of government policies towards transnational broadcasts, inspired by the Chan (1994) typology and adapted for the evolving satellite scene in Asia in the early 1990s. The extreme stage in this continuum is represented as ‘active suppression’ of transnational satellite viewing while ‘latent suppression’ denes the concept of ofcial suppression without the practice. This author believes the term ‘passive inaction’ encapsulates the broad category of situations where by default of the government’s lack of policy there is legal void concerning transnational satellite and cable television. Furthermore, there is a need to differentiate between a government which then proceeds to grant ‘regulated access’ to certain transnational channels and those which allow its citizens ‘liberal access’ once they have registered or paid a licence fee. This typology will be duly applied to the broadcast policies of the countries within South East Asia generally and their responses to transnational satellite television specically (Table 2).

Malaysia Satellite dishes for hotels were licensed by Malaysia in the early 1990s enabling their guests to watch CNNI and two StarTV channels. Then the government granted its rst licence to a consortium of the public broadcaster RTM and a commercial station controlled by the ruling


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TABLE 2. Government policies in South East Asia toward transnational satellite television


Malaysia Singapore Thailand Philippines Vietnam Indonesia

Active suppression

Latent suppression

Complacent inaction

1992 –96 (west) 1992 –94 – – – –

1992– 96 – (east) – – – – – 1990– 93 1996 –present – – –

Prudent inaction

Controlled access

–

1996–present – (both) 1994–present – – 1995–present – 1994–present – – – 1990–present

– 1992– 94 – 1992– 95 –

Liberal access

coalition to provide up to eight pay television channels by 1995 (Via Satellite, 1995). MegaTV was established in late 1995 and provided transnational channels such as CNNI, Cartoon Network, Discovery, ESPN and HBO. While Malaysia banned the use of dishes for the reception of satellite broadcasts, in its eastern states on the island of Borneo some 2000 illegally installed antennae were reported to exist (Nordin, 1992). A situation of latent suppression to satellite television existed in East Malaysia while active suppression existed in West Malaysia. Since Malaysia launched its own domestic communication satellite named Measat-1, it has permitted a 22-channel DTH satellite pay television service called Astro. While it offered a range of transnational and in-house channels, the former were rst downlinked and subjected to censorship. Thus in recent years, Malaysia could be said to have made the move towards controlled access.

Singapore Satellite dishes require special permission in Singapore and this was granted only to certain government departments, educational institutions, the nancial market and world-class hotels. It is worth bearing in mind that the Singapore Government has had long-standing battles with transnational media over what it considered inaccurate reporting and undesirable entertainment (Sussman, 1991). However, in recognition of market demand three channels of satellitedownlinked programming, namely HBO, CNN and Mandarin Entertainment, were made available by subscription from Singapore Cable Vision, a subsidiary of SBC (Hukill, 1993). Ironically, given its initial active suppression of transnational satellite television, Singapore began utilizing a satellite in 1994 to broadcast an 18-h Television Corporation of Singapore International all-Mandarin satellite channel utilizing PanAmSat2 as a means of raising the country’s regional and international prole. By early 1995, the government-owned Singapore Telecom was experimenting with a video-on-demand service to the country’s 3.2 million residents (World Broadcast News, 1995). Thus, the situation has become one of controlled access to transnational satellite channels via cable.

Thailand Thailand was the pioneer within Asia in introducing pay television and cable television in 1990, following a recommendation of the regulatory body to deregulate the industry. By the early 1990s there were two providers of pay television: International Broadcasting Corporation (IBC ), owned by the Shinawatra group and Thai Sky TV. All programmes on the four

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IBC channels were imported, mostly from the US and either dubbed or subtitled in Thai to cater to the vast majority of the population which was not English literate (Hamid, 1991). Similarly, the second pay television provider, Thai Sky TV, offered three channels, all sourced from ITN, BBC, NBC and NHK for its news and MTV, Virgin, MGM and Paramount among others for its entertainment channel and dubbed in Thai and subtitled in English (Siriyuvasak, 1993). Given the lifting of the ban on satellite dish antennae, Thailand is a country with liberal access to satellite television, though the language barrier meant that the appeal of transnational programming was conned to its educated and afuent minority and expatriates.

Vietnam Having embarked on a programme of economic liberalization, Vietnam is receiving considerable commercial impetus from Thailand. In 1994 Vietnam TV (VTV) was the rst foreign broadcaster to use Thaicom2, satellite which expects to attract French broadcasters to the former colonies (World Broadcast News, 1994). Another Thai rm has supplied 30 satellite dishes to ofces, hotels and embassies in Hanoi and Ho Chi Minh City (Asian Communications, 1993, pp. 23–6). True to its ideological committment to communism the Vietnamese Government’s policy towards transnational satellite broadcasts seems still to be one of prudent inaction. While the situation was unclear due to lack of data, the policy of the other IndoChinese nations towards transnational satellite television appears to be one of complacent inaction.

The Philippines Three Manila television stations have historically utilized the Palapa satellite for nationwide broadcast of their programmes, but many of the 400 original satellite dishes were believed to be picking up other signals from Palapa, IntelSat, AsiaSat and Japan’s DBS satellites, some of them for unauthorized retransmission via cable television, terrestrial television and videotape (Stuart, 1993). The arrival of transnational satellite television such as CNN, StarTV and ESPN in the 1990s was a major impetus to the phenomenal growth of the cable industry which had existed as a regulated monopoly in the 1970s and 1980s. Of the 11 million television households in the Philippines, 250 000 were connected by 300 cable operators, most of them small family businesses though they had forged alliances with key multisystem players and invested an estimated US$60 million in the industry by 1995 (Broadcast Asia, 1994). By the end of 1995 the cable operator Sky Cable was offering over 55 channels including StarTV, ABN, AusTV, MTV, TVBS and CTN, as well as French, R ussian and local programming (Kwang, 1995). For certain, the Philippines’ policy towards transnational satellite television may be described as one of liberal access.

Indonesia The current policy of deregulation represents a signicant move by the government away from its past fear of commercialism and political subversion via the media and a new recognition of the sophistication of its populace. Using the typology developed it may be said to have a response of liberal access, since the technology for receiving satellite broadcast signals had been in place for decades for domestic television purposes. Little attempt was being made by the government to regulate the viewing of transnational broadcasts. Although a licence was required to own a satellite dish even for domestic reception there were


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estimated to be ve times as many illegal ones and each was widely shared. By deregulating the domestic commercial television industry ahead of the onset of transnational satellite television, the government fostered strong loyalty to local channels and their culturally appropriate programming.


Market penetration By late 1995, transnational satellite television had claimed penetration of 54 million homes in 53 countries, up from 11 million homes in February 1993 (Kwang, 1995). However, the research methodology used and conclusions drawn have been questioned both within the industry and beyond because StarTV had sampled a small number of cities in each country, used varying methods of data collection and measured only access to satellite television reception, not actual viewership. Nonetheless, data for the South East Asian region (Table 3) shows steady growth in some countries and belated penetration in others. It is quite evident that countries with the more liberal government policies towards consumer access to transnational satellite television have been the ones with earlier adoption of the medium (Table 3). Although the growth of audiences in the Philippines and Thailand has been sustained, that in Indonesia has clearly stagnated even though it is one of the major markets targeted by transnational broadcasters such as StarTV. Clearly the politicolegal environment is not a sufcient explanation for the growth of viewership of transnational satellite television. So the special case of Indonesia in terms of the response of consumers and advertisers will be investigated in greater detail. CASE STUDY: INDONESIA As part of a wider research project on the impact of StarTV, interviews were conducted with key personnel in advertising, the media, government and research organizations in three countries drawn from three distinct regions in Asia under its broadcast footprint, namely Indonesia (South East Asia), China (North East Asia) and India (South Asia). The eldwork in Indonesia reported in this paper was conducted in early to mid-1994, which was 3 years after the inauguration of StarTV. This allowed sufcient time to evaluate its impact but was prior to the arrival of other major satellite broadcasters. The breakdown of the 28 Indonesian interviewees was as follows: seven advertising agencies, nine media owners, eight research organizations and four policy makers=regulators. Each of the interviewees was able to provide TABLE 3. Validated household penetration in South East Asian countries capable of receiving StarTV Countries

June 1992

February 1993

January 1994

August 1995

December 1996

The Philippines Indonesia Thailand Malaysia Brunei Myanmar Vietnam

70 474 14 335 9000 – – – –

137 141 36 211 32 393 – – – –

187 431 49 807 142 805 – – – –

248 315 – 393 000 – – – –

400 000 50 000 393 000 30 000 30 000 15 000 15 000

Source: StarTV (1992 –1996).

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professional insight into the impact of transnational television via satellite on their nation in general and its television and advertising industries in particular.

Consumers=Audiences


Satellite dish ownership It was difcult to estimate the extent of satellite dish ownership and therefore of transnational television reception in Indonesia; working estimates of the government put them at 500 000– 600 000, of which only 10 000 are StarTV capable. By regulation, all satellite dishes had to be directed towards the domestic Palapa satellite but this was not enforced. One interviewee believed that there might have been up to ve times that number operating illegally, while another quoted a gure of 1.2 million satellite dishes based on spare parts imported from the US. Furthermore, many satellite dishes might be cabled illegally to up to 20 homes and each home might have a sizeable extended family audience which is quite unlike viewing habits in developed countries. Because the AsiaSat1 satellite footprint covered only the more northerly Sumatra and Borneo islands, larger and more expensive satellite dishes were needed elsewhere in Indonesia to receive StarTV. This cost considerably more than satellite dishes for domestic=regional channels alone and would have been beyond the means of even middleclass Indonesians, except via illegal cable sharing. Although some transnational television such as CNN, HBO, ESPN and Discovery were initially available via the Palapa satellite, these commercial channels subsequently encrypted their programmes for pay television subscriptions.

Reach and viewership By its third year of operation, StarTV availability had stagnated at 2.2% of all television households in Indonesia which was estimated by the media industry at 22.4 million households. Further research, done in the Medan city region which falls directly under the StarTV footprint, showed that StarTV was available in 87% of households which had access to satellite television, though in only 7%of all television households in that city=urban region. StarTV households in Medan, comprising some 140 000 viewers, were also found to be signicantly higher than other television households on such socioeconomic indices as ownership of credit cards, cars, video cassette recorders and compact disc players (StarTV, 1993). R esearch conducted by Survey Research Indonesia (SRI) in 1993 indicated that only 2% of respondents watched transnational satellite television the previous day and a further 1% claimed to have watched it between 2 and 7 days earlier. None of these respondents watched it for any signicant length of time, though 98% of them claimed to be irregular viewers of transnational satellite television (Survey Research Indonesia, 1994).

Marketer=Advertiser response Legal constraints By law, all advertising in Indonesia has to be placed via a local advertising agency with a domestic medium, which therefore precludes multinational marketers from buying transnational media time through their Indonesian operations. At least this was one reason cited by domestic advertising agencies for their lack of interest in transnational satellite television. According to Indonesian Government Decree 111 of May 1989 all commercials on Indonesian television had


229


be produced locally, though full exemption was granted for airlines. However, since there was a lack of production houses, some multinationals such as Coca-Cola and Marlboro use international versions of their television commercials with the Board of Censors’ permission. R egulations in future were expected to allow 20% local content in television commercials (interview with ad agency). Advertising agencies in Indonesia were also self-regulated by a code of ethics which specied adherence to national laws and ideology, sensitivity to local culture and religion, restrictions on promotion of certain products and so on (Persatuan Perusahaan Periklanan Indonesia, 1996, p. 167). On the surface then, it would seem difcult, though not impossible, for Indonesian advertising agencies to participate in the creation, production and utilization of regional advertising, via transnational television or otherwise.

Agency± Marketer realignment There had been a shift of marketer client accounts in Indonesia to international advertising agencies with the reintroduction of television advertising years earlier, motivated by a search for skills in producing commercials. However, there had not been any corresponding multinational client–agency realignment in the country prompted by transnational satellite television. Industry opinion held it unlikely that there would be a sizeable shift to pan-Asian television advertising as marketing strategies and positioning of multinational products were quite different even between culturally similar countries such as Malaysia and Indonesia. When television advertising was reintroduced in Indonesia there was a shift of some accounts to international agencies for their professionalism and expertise but none have moved since the arrival of StarTV and other transnational satellite channels (interview with research organization). Creative ‘hot-shops’ specializing in television commercial production as well as local agencies able to undercut by price have competed with international agencies for multinational marketer accounts. Even these smaller agencies are beginning to network on a regional basis (interview with ad agency). Although there are over 200 advertising agencies in Indonesia, only about 50 might be truly professional. Advertisers are not switching their advertising spending from domestic to transnational television. In any case the law states that all Indonesian advertising has to be booked via a local agency and with local media (interview with policy maker=regulator).

Regional advertising was believed by respondents not to work in Indonesia because of language and cultural barriers. This was said to be reected in the fact that local programming in Indonesia, however badly produced, enjoyed higher ratings than any imported programming. Foreign programming similar to that available on the transnational satellite channels was available on the domestic commercial channels either dubbed or subtitled and therefore more popular. Furthermore, it was relatively expensive to purchase a satellite dish antenna and so the approximately 600 000 viewers of transnational satellite television in Indonesia were believed to be mainly the wealthier ethnic Chinese, expatriate executives or English-educated Indonesians. When domestic broadcasters offered mass markets for cheaper, these up-market segments held little interest to interview respondents from the advertising and broadcasting industries, as their comments imply. Even if they were English speaking, audiences prefer programmes to be dubbed because it makes them easier to understand and otherwise the wider family may not be able to appreciate them (interview with media owner).

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THOMAS

Dubbing of imported programming leads to higher ratings than simply subtitling them (interview with media owner). Transnational television would have great impact once costs of satellite dishes are lowered through local manufacture and there is greater cable sharing of them (interview with media owner).


Domestic target markets Advertising and media executives believed that consumption habits had changed as consumers had become more sophisticated and brand conscious through the inuence of domestic commercial television even prior to the advent of transnational satellite television. Yet the effect on consumption behaviour by commercial television since its introduction in the late 1980s was said by the interviewees to be less than that of TVR I’s advertising when it rst started in 1960s. This was because at the later time there were multiple inuences via other media, greater geographical mobility, better communications, higher income and so on. Only anecdotal evidence was proffered for the view that the reintroduction of domestic television advertising in 1987 had been responsible for greater consumer awareness, more so than transnational satellite television. Consumers are now more aware of brand alternatives through domestic television which has greater coverage of the country than print (interview with broadcaster). Anecdotal evidence suggests that the reintroduction of television advertising has been responsible for greater consumer sophistication and brand consciousness (interview with ad agency). Language barrier, promotions of commercial stations, better time-of-day appeal to audience gives domestic stations of edge (interview with ad agency).

Media planning=buying Shifts in advertising spend The consensus of opinion among the interviewees in Indonesia was that there has been no known shift of advertising media spending from domestic television to transnational satellite television, nor was any anticipated. The latter as deemed an inappropriate if not also an expensive medium for the vast majority of goods and services advertised to the national market, with the possible exception of the advertising of luxury goods for an up-market segment. The only other situations where advertising on StarTV was recommended was when it might have been important to avoid advertising clutter, or where no other television medium was readily available as the situation was in parts of South East Asia. Advertising on transnational media can be seen as a way of overcoming the growing clutter of advertising on domestic media or its virtual non-existence in certain national markets. For instance, StarTV is being propelled by the Indian and Chinese domestic markets and by transitional economies such as Vietnam which are experiencing it as their rst form of television (interview with media owner). The general consensus among advertising agencies is that domestic television still has a lower cost per rating point than StarTV (interview with media owner).


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Some clients were asking about advertising on other spill-over media from Singapore and Malaysia, but it remains a question of costs per thousand (interview with research organization).


Shifts in advertising spending to transnational television are doubtful except for some luxury goods. Though a trend might emerge of global marketers utilizing transnational satellite television as well as domestic marketers also upgrading to it (interview).

Indonesian advertisers are not unfamiliar with transnational advertising as they were forced to utilize Malaysian television in the early to mid-1980s to reach border provinces when commercials were banned on domestic public television. However, it was only a temporary measure by a limited number of advertisers and such advertising expenditure returned to Indonesia as soon as commercial television was introduced because of the tremedous popularity it achieved. The lifting of bans on television advertising when commercial channels were introduced led to a signicant rise in advertising budgets. Prior to 1987 because of the ban on television advertising, Indonesian advertisers spent US$2.5 million on Malaysia’s TV3 in order to reach Indonesian consumers via spill-over broadcasts in border areas such as Medan, Pekan Baru and Riau (interview with policy-maker=regulator). Advertising expenditure had an abnormal increase with the (re- ) introduction of commercial television, but it soon stabilized at approximately 43% of all media (interview with policymaker=regulator). For entertainment, domestic television channels were still preferred by audiences and thus 65% of advertising expenditure in Indonesia remains in that medium (interview with media owner).

Transnational television advertising spend Although data on advertising expenditure in Indonesia was readily available (Table 4), this researcher was cautioned by interviewees that it was not reliable since it did not reect the discounts paid. In any case, data on spending on StarTV by Indonesian advertisers in 1994 was non-existent and the amounts were thought to be negligible. This was attributed to the fact that such media buying was handled by regional headquarters of multinational corporations which tended to be located in Hong Kong or Singapore. On the one hand, if there were any moves by such regional headquarters to require contributions by domestic marketing branches in Indonesia, they would be resisted strongly on account of the fact that TABLE 4.

Indonesian advertising expenditures by media 1992–1995 (Rp billion) 1992

1993

1994

1995

Medium

Rp b

%

Rp b

%

Rp b

%

Rp b

%

Television Newspaper Magazine Radio Outdoor Cinema Total

390 377 95 100 55 10 1027

38.0 36.7 9.3 9.7 5.4 1.0 100.0

613 484 108 113 53 10 1381

44.4 35.0 7.8 8.2 3.8 0.7 100.0

1062 743 155 139 176 11 2286

46.5 32.5 6.8 6.1 7.7 0.5 100.0

1638 1075 211 170 230 11 3335

49.1 32.2 6.3 5.1 6.9 0.3 100.0

Source: Persatuan Perusahaan Periklanan Indonesia (1996).

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most multinationals were operating as joint ventures by law. On the other hand, StarTV was believed not to solicit for advertising in Indonesia, for it would invariably mean taking market share from the domestic broadcasters and, thus, jeopardizing its good relations with the government. Figures for Indonesian advertising placed with StarTV or any other transnational channels are not available. But they are believed to be negligible or otherwise consolidated with regional budgets managed out of Singapore or Hong Kong (interview with research organization).


All advertising expenditure gures are somewhat inaccurate in Indonesia because of the widespread practice of discounting (interview with research organization). Regional ofces of advertising agencies might seek a contribution from the domestic advertising budgets but their national ofces tend to resist such pressures. Since most agencies and their multinational clients are, by Indonesian law, joint ventures with domestic interests who were committed to the national market, transnational advertising spending is resisted. So there are no cutbacks in domestic media spending to fund regional advertising (interview with ad agency). It is believed that StarTV does not actively seek television commercials from Indonesia because that would have meant depriving domestic television of income, thus antagonizing vested political interests (interview with research organization).

The astute policy of StarTV of not competing directly with the domestic commercial channels in Indonesia seems to have paid off with its eventual strategic alliance with the country’s sole pay television franchise, owned largely by the same business conglomerates that own the dominant domestic channels. Not only are StarTV channels and most of the other transnational braodcasters’ channels on the service, Indovision is also required by the terms of its licence to carry the domestic commercial channels unencrypted. In Indonesia, StarTV seems to have succeeded not by competition but cooperation and gained its revenue from subscriptions rather than advertising.

Creative developm ent=production Products and brands advertised The only Indonesian products known to have advertised on satellite television were airlines and hotels; the medium was considered ideal for such products given its access to their target markets in many of the countries under the footprint. However, Indonesian advertising agencies preferred to placed corporate and image advertising for upmarket consumers in domestic print media rather regional television. They could cite only one instance of a regional advertising campaign but volunteered no comment on its effectiveness in creating brand awareness or delivering sales in Indonesia, only that it was a successful collaboration of advertising agencies in the region. Airlines are ideal for regional media and so are global brands such as Marlboro (interview with ad agency). Corporate=Image advertising for upmarket consumers, ad agencies prefer to place in print media, for example, Tempo (interview with media owner).


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The only example of a successful transnational campaign is that for the Dimension 2-in-1 shampoo where Unilever produced a single commercial for three markets, namely Malaysia, Thailand and Indonesia (interview with ad agency). Batey Advertising in Singapore ran a transnational campaign and got ratings of 1 point or 1% of the audience (interview with ad agency).


Cultural adaptation Indonesian advertising agency personnel seemed to have reservations about the practicality of devising a regional let alone global advertising campaign. They were conscious of the cultural diversity within Asia, even within South East Asia and the difculty of transcending this or of attempting to change some aspects of it in relation to consumption behaviour. As one advertising agency executive, particularly eloquent on the subject, put it: It is not a question of whether the advertising of global products has to be integrated with the local culture of Indonesia, but how it is to be done. Indonesian commercials tend to be more entertainment oriented rather than hard sell, more like those in Japan than the US. Global commercials are sometimes perceived differently by audiences cross-culturally, for example, the SIA ‘girl’ is seen variously as efcient, family-oriented or beautiful. Some cultural preferences are ingrained, such as the colour preferences of ethnic groups. Drinking directly from a bottle, eating on the run or holding a hamburger with both hands are all considered culturally impolite in Indonesia and a number of other Asian countries. It is cheaper for advertising to reect culture than to attempt to change it. While certain habits can be changed, changing the culture as a whole was not possible.

Executives in advertising, market research and domestic broadcasting seemed to consider the cultural barriers virtually insurmountable and pointed repeatedly to examples of multinational marketers in Asia who had opted to create multidomestic advertising campaigns. They implied that cultures were distinctly different within the subregion of South East Asia, not to mention the whole region. Thus, they could not envisage a major shift to using panAsian television commercials given the signicant social and cultural differences they perceived across the region. Even in the neighbouring and culturally Malaysian and Indonesian markets there have to be separate national advertising campaigns for global brands like Toyota, Salem and Dunhill (interview with ad agency). Regional advertising would be inappropriate for Lippobank which positioned itself as ‘the bank for Chinese investment’ in Hong Kong which would be a politically unacceptable message in Indonesia and Malaysia (interview with ad agency). Even global advertising campaigns have to allow for cultural adaptations of its theme, as for instance in the different versions of the Marlboro commercial. In the US version there was only a lone cowboy, but in the Malaysian version there were four herdsmen to represent communality, while for materialistic Hong Kong the version features the owner of the ranch arriving via helicopter (interview with ad agency).

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DISCUSSION The situation in Indonesia’s media and advertising industry is instructive for the wider South East Asia region. The policy of broadcast deregulation represented a signicant move by the Indonesian Government away from its past fear of commercialism and political subversion via the media and a new recognition of the maturity of its citizens. In any case, having encouraged the ownership of satellite dishes for the nationwide reception of domestic public and commercial broadcasting, the Indonesian Government could not easily restrict reception of transnational satellite television by its citizens. Thus, in contrast to other South East Asian nations, Indonesia adopted a very liberal attitude towards commercial television and little attempt is being made by the government to regulate the watching of transnational broadcasts, except for encouraging their encryption when utilizing its own satellites such as Palapa and IndoStar. In reality there is only a minuscule audience for transnational broadcasts, believed to be either expatriate Westerners or ethnic Chinese in urban areas or indigenous minorities residing mainly in provinces which border other Asian countries and watching their domestic stations via satellite or spill-over. The impediments to viewing transnational seem to be 2-fold: rst, there is the cultural barrier since Indonesia does not have an English-language colonial heritage nor an ethnic Chinese population still conversant in the language to be able to appreciate the offerings of the new medium in the region which are largely in English and Chinese. Second, there is the prohibitive cost of owning or even sharing a satellite dish for the majority of its population, as Indonesia is still a developing economy. Furthermore, identical or similar ‘Western’ programmes are imported, then subtitled or dubbed before transmission on domestic commercial channels and more accessible culturally and economically to Indonesians. Some of these such as crime dramas from the US and soap operas from Latin America are highly popular in both urban and rural Indonesia, though not as much as locally produced programmes. By deregulating the domestic television and advertising industry ahead of the onset of transnational satellite television, the government has fostered strong loyalty to domestic television channels and their more culturally appropriate programming. The highest-rating television programmes in Indonesia are by far the local productions broadcast on domestic channels, a situation true of most Asian countries which have also access to transnational television. Therefore, it is more cost-effective for advertisers and their agencies seeking to communicate with national market segments to utilize domestic television. Audiences relate best to television commercials for reasons of cultural relevance even if they, like local programmes, mimic ‘Western’ cultural forms. Just as there are Indonesian clones of situation comedies, talk shows, quiz shows and musical variety programmes, the domestic television commercials were observed to be adaptations of global commercials, contextualized with local personages, settings and idiom. Whether or not the cultural differences are insurmountable objectively speaking, the fact that they are so perceived explains the non-involvement of the Indonesian advertising industry in pan-Asian campaigns. However, there might be other explanations, including the fact that the cultural issue is used as a publicly espoused rationale for non-consideration of this medium, when the true reason might well be the loss of local revenue and power which accompanies the decision to collaborate in a regional strategy. Regardless of their motivations, the reality is that transnational satellite television exemplied by StarTV acting as a pan-Asian medium in the early 1990s had no impact on the practice of advertising in Indonesia. Transnational television and domestic television need no longer be perceived as mutually exclusive and opposing alternatives to marketers and their advertising agencies. Just as StarTV has changed its strategic direction to focus on geolinguistic regions, other transnational satellite



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channels such as MTV, Discovery, HBO and ESPN have followed suit. There is also an increasing incidence of domestic commercial and even public broadcasters downlinking transnational satellite programming, a form of importing, for rebroadcast terrestrially, often incorporated into their channels or via cable=pay television under licence. On the other hand, the growth of programming hours has meant that domestic or regional lm and television producers, often terrestrial broadcasters themselves, have been able to export programmes produced previously for domestic consumption to satellite channels for rebroadcast transnationally. Furthermore, due to a glut of transponders in Asia, domestic television channels are able to utilize satellites cheaply to broadcast within the region thus catering to audiences of similar culture and language located across national boundaries. This may be counted as a form of programming export by domestic broadcast industries, although often it is done by public broadcasters primarily for political reasons and nationalistic standard bearing. CONCLUSION This survey of South East Asian countries and case study of Indonesia demonstrates that the fears of governments in developing countries about media imperialism by multinational corporations have proven somewhat unfounded. Predictions by academics about the globalization of markets have also not quite been borne out either, due to a number of cultural, political, economic and business factors. Contrary to expectations, viewership of domestic television has not declined, national advertising budgets have not been consolidated into regional=global budgets, international advertising agencies have not become dominant and consumer cultures seem not to be homogenizing in Asia. In the next few years, this trend of global marketers utilizing satellite television to target ethnic=linguistic regions may be matched by domestic marketers upgrading to global media as a way of overcoming the growing clutter of advertising on national media or gaining new export markets abroad. As the line between transnational and domestic television and imported and locally produced programmes grows less distinct, so might the distinction between global and national advertising. Certainly, the debate over the globalization or localization of advertising appears far more complex in the sociocultural and economic–technological environment of the developing countries of Asia in the 1990s than was envisaged by its initiators in earlier decades in North America and Europe. REFERENCES Anderson, M.H. (1984) Madison Avenue in Asia: Politics and Transnational Advertising. Cranbury, NJ: Associated University Presses. Asian Communications (1993) Regional focus: Thailand’s local markets’. Asian Communications November. Baldwin, T.F., McVoy, D.S. and Steinfeld, C. (1996) Convergence: Integrating Media, Information and Communication. Thousand Oaks, London and New Delhi: Sage Publications. Broadcast Asia (1994) Cable TV: impact on the Philippines. Broadcast Asia March, pp. 36–8. Chan, J.M. (1994) National responses and accessibility to StarTV in Asia. Journal of Communication 44(3), pp. 112–31. Domzal, T.J. and Kernan, J.B. (1993) Mirror, mirror; some postmodern reections on global advertising, Journal of Advertising 22(4), pp. 1–20. Frith, K.T. (ed.) (1996) Advertising in Asia: Communication, Culture and Consumption. Ames: University of Iowa Press. Glascock, J. (1993) Effect of cable television on advertiser and consumer spending on mass media, 1978–


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BIOGRAPHY Amos Owen Thomas is a senior lecturer at the School of Marketing and Management, Grifth University, Australia. His research interests are in the globalization of television and advertising industries and he has published on India, Indonesia, Papua New Guinea, Hong Kong, China and Taiwan.