In mid-August 2020, amidst the surviving mode of the COVID-19 pandemic, the attention of Indonesian netizens was also focused  on a request for a Judicial Review to the Constitutional Court for the Law Number 32 of 2002 concerning Broadcasting (Broadcasting Law) that was filed by two private television stations that are part of the conventional media conglomeration in Indonesia, RCTI and iNews. The Judicial Review was requested due to the concern of RCTI and iNews, as part of the largest and oldest Indonesian conventional television industry, that the competition between the conventional television industry compares to YouTube and Netflix is now become unbearable to some extent. The problem is rooted in the exclusion of YouTube and Netflix from the scope of the Broadcasting Law.

According to Article 1 Paragraph (2) of the Broadcasting Law, Broadcasting shall be defined as the activity of broadcasts and/or transmission on land, at sea, or in space by using a radio frequency spectrum by air, cable, and/or other media to be received simultaneously and simultaneously by the public with broadcast receiving equipment.

RCTI and iNews, as the applicants for Judicial Review (the Applicants), view that the provisions in Article 1 paragraph 2 of the Broadcasting Law can be classified as a form of discrimination if the internet-based broadcasting is not regulated in the Broadcasting Law. The article may cause differences in the scope of rights and obligations between conventional broadcasting operators and internet-based broadcasting operators because it creates losses for the Applicants due to unequal treatment. Conventional broadcasting operators are bound and obliged to implement all kinds of provisions contained in the Broadcasting Law while internet-based broadcasting operators are not. For example, the internet-based broadcasters are not subject to sanctions by the Indonesian Broadcasting Commission (Komisi Penyiaran Indonesia – “KPI”) if they violate the Broadcasting Code of Conduct and Broadcast Program Standards (P3SPS).

The Applicants further argue that referring to the development of internet-based broadcasters, over the top (OTT) content services, such as YouTube and Netflix, should be included in the "Broadcast" category in the Broadcasting Law. Especially considering the number of internet users continues to grow. On that basis, RCTI and iNews asked the Constitutional Court to reformulate Article 1 paragraph 2 of the Broadcasting Law.

Despite the reluctance of the conventional media to accept YouTube as a legitimate news source, the platform continues to grow in power. In many cases, these YouTubers even have bigger audiences than conventional media. Firstly introduced as a platform for the non-journo citizen to upload spontaneous videos captured by being in the right place at the right time – which somehow contained different angle from the old fashioned journalistic standard. Now, YouTube is transformed into a melting pot for people who dedicate their lives to creating content.  With YouTube, it is a completely different power dynamic. Both audiences and more traditional creators can make limitless programmers, giving YouTube a massive advantage over traditional broadcast channels. Indeed, its flexible model allows YouTube to give its audience more freedom, which makes it more authentic and, arguably, more engaging. This is a fundamental thorn for conventional broadcasters in Indonesia. It simply can not compete on unique content provision; the internet is a place where people can be free creatively, without the constraints of what a broadcaster demands in structure and content. On the other side, conventional television is not oblivious to matching technology and audience demands plus to ensure the incompliance to the Broadcasting Law and its implementing regulations. Traditionally conventional broadcasters will enter into a commissioned arrangement with a production house to make minimal fees of a program and wish to obtain a greater percentage on the sales of the program.  This is not the case with internet-based broadcasters. So, broadcasters are at real risk of losing out.

While the Judicial Review request is now on the march in its progress, the Indonesian Private TV Stations Association is  continuing its effort to ensure that the Broadcast Law will be renewed by the House of Representatives to adjust with the technology and customers' demand.

Aside from the foregoing effort to accomplish the renewal of Broadcasting Law, the newly-enacted Law Number 11 of 2020 concerning Job Creation or commonly-known as the Indonesian Omnibus Law provides several amendments to the prevailing Broadcasting Law, as amongst others about the life-time broadcast license. Article 71 paragraph (4) of the Indonesian Omnibus Law delete the previous Article 34 of the Broadcast Law concerning licenses, which introduce that broadcast license for television shall be valid for 10 years while for radio shall be valid for 5 years. The deletion of this provision resulting that under the Indonesian Omnibus Law, broadcast licenses shall be valid for as long as a company operating its business. It also deletes the restriction of broadcast license trading.

Previously under the Broadcast Law, every broadcasting operator shall renew its broadcasting license upon its expiration. The renewal process shall be passed an evaluation by the government and KPI as public representatives before they can be permitted to broadcast again. Deletion of such evaluation requirements diminishes a form of public accountability of broadcast operators.

The Indonesian Omnibus Law also introduces the expansion of broadcasting range that is now valid for all Indonesian territory with no obligation to maintain a network with local television or radio station.  Further, Article 72 paragraphs (6) and (7) of the Indonesian Omnibus Law delete the sanctions for ownership centralization and cross-ownership. The Omnibus law also reduces the authority of KPI.

Ever-since 2011, Indonesia has launched a plan for a broadcast migration from analog to digital technology. Previously, the Indonesian private television association estimates that it will take at least five years of preparation time to complete the conversion process from analog to digital. These five years will be counted from the time the revision of the broadcasting law was completed. However, Article 72 paragraph (8) of the Omnibus Law states that this conversion plan must be completed within two years from the promulgation of the Omnibus Law. As a capital-intensive industry, the speed up conversion period push all television owner to live on the edge in finding fast and life-changing revolution to fulfill this conversion requirement which technically is expensive and at the same time to find a way on how to compete with the always-changing trend of internet-based media.

From an investor's point of view, currently, the consideration can not only be based on considerations of the amount of investment that must be spent to comply with technology needs but to ensure how television can make programs worthy of choice by the community. Especially nowadays, people have lots of entertainment options that are cheaper and according to their respective interests so that the economic cost of the barrier to entry is exceedingly small.

Who will be the winner?

The juggernaut that is online content is only going to gather pace as more consumers seek out content rather than viewing the content programs broadcasters set out. The rise of internet-enabled TVs is making the challenge even greater. While conventional TV is not out of the fight yet, but it's certainly down for the count. Unless it can re-address its formulaic nature, or there is another significant shift, YouTube will emerge victoriously – it will once again sound like what The Buggles song back then when they sang that Video Kill the Radio Star.

This article has been co-authored by Al Hakim Hanafiah and Nike Astria Malik.