Analysis: Why Netflix had problems in Indonesia

Indonesia is often described as the most populous Muslim nation in the world. But the country’s development as a media market on a global scale has been uneven and full of unfulfilled promises.

Many of the old connections between media ownership and political influence seem to have been transplanted from the analog era to the digital one, making it a tricky place to operate for foreign film, TV and (later) media companies. transmission.

However, the board announcement and Friday’s Jakarta event seem to normalize Netflix’s position in Indonesia after a politically charged and controversial first few years. The presentation notably included an effusive video message from Sandiaga Uno, Minister of Tourism and Creative Economy.

The company started operating in the country in 2016. But it was quickly blocked by the state-owned group Telkom, the country’s largest internet service provider. Netflix was excluded from the IndiHome, Telkomsel and platforms. There were even accusations that the streamer was streaming pornography and supporting terrorism.

The state claimed that the carrier’s decision was commercial, rather than political. But that seemed unlikely as the government moved simultaneously to appease the more conservative elements in society through content controls and to expand its taxes on the growing digital economy. The ministers also explicitly called for foreign digital companies to work through local partner companies.

If Netflix’s lack of a local partner may have been a political-strategic misstep, Telkom Group may have chosen the wrong foreign partners. It allied itself with Hooq and Iflix, Asian-run streaming services that have since disappeared.

Ironically, one of the problems that brought down Hooq and Iflix may have been their Hollywood-heavy content lists and their too-slow pivot toward including significant amounts of local content.

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Disney, on the other hand, seemed to have its OTT launch in Indonesia, in September 2020, politically and commercially correct. It offered the low-cost Disney Plus Hotstar version of its direct-to-consumer offer. It was launched in partnership with Telkomsel and provided a large amount of Indonesian content from catalog deals and alliances with local TV producers from the get-go. By May this year, Disney had surpassed 5 million subscribers in Indonesia, according to analytics firm Media Partners Asia, making it the market leader.

With the COVID pandemic and a more accommodating government stance, Indonesia’s digital economy has flourished. Super app Gojek is one of Asia’s biggest unicorns and local conglomerate Emtek’s streaming platform Vidio has reached significant scale. This has allowed government attitudes towards Netflix to soften.

Ultimately, the new hosting may be good for both Indonesia’s creative economy and the streamer. On Timo Tjahjanto and Joko Anwar, which is in high demand and has many other deals, Netflix has teamed up with major creators.

And if Netflix could now do for Indonesian content something that it has done for Korean film and television, past disputes would soon be forgotten.

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