New media magnates
Albertus Weldison Nonto and Yanto Soegiarto
If Mark Zuckerberg can create a
billion-dollar empire from a university dorm, imagine the potential for Erick
Thohir and Anindya Bakrie – already fabulously wealthy and prodigious – to
transform Indonesia’s media landscape. Globe Asia met the pair to discuss PT Visi Media Asia’s
local-content and convergence-pegged future.
Forty-year-old Erick Thohir,
second generation of the Trinugraha Thohir Group, and 36-year-old Anindya,
third-generation Bakrie, have joined forces in hedging their bets on
Indonesia’s ravenous media appetite.
With two television broadcasters,
tvOne and ANTV, and the online news website vivanews.com, the illustrious duo
now have just the multi-platform media machine they require.
Visi Media Asia’s
IPO late June was still pending as GlobeAsia
Visi, also known as Viva, will
release 14.21% of its shares, or as many as 2.286 billion, to the public as
well as 571.5 million warrants. One of the underwriters for the float, Danatama
Makmur, said it expected the IPO to raise around Rp650 billion.
The IPO funds,
say Erick and Anindya, will enable Viva’s evolution from a media and news
portal to a formidable convergence and local-content driven force.
“He is the president director,”
laughs Anindya pointing to Erick, when the two met GlobeAsia in an exclusive interview in June. Strong family
ties mean that Erick and Anindya have been close friends for some time, an
element they believe will allow them to coordinate a dynamic business together.
“No matter how sophisticated your business plan, if you can’t get along well
then you have already half failed,” says Anindya.
With a 40-million-strong middle
class and growing, the potential of Indonesia’s media sector is set to trump
the growth of analogous sectors in Singapore and Malaysia combined.
Indonesia’s solid economic growth
coupled with phenomenal rates of cell phone and social media penetration has
the pair confident that Viva’s growth will be driven by Indonesia’s tech-savvy
The exponential growth of internet usage, particularly in remote areas,
and the rising number of digital entrepreneurs eager to tap into the market are
also promising signs for a company pinning its hopes on the up-and-coming
The future of Viva, says Erick,
hinges on a clear strategy that is heavily geared toward quality content and
synergy with outside providers. The IPO is expected to value the firm at around
While Viva might be a tiny player
compared to the giant MNC Group, controlled by media tycoon Hary Tanoesoedibyo,
and Chairul Tanjung’s TransMedia Corp, Erick believes the company is well
positioned to expand both in revenue and size over the next five years.
With the biggest number of hits
on an online Indonesian news site, vivanews.com has come a long way in the past
year. More than 1.8 million logged onto the site per day in 2010, a dramatic
increase from only 500,000 hits per day in 2009.
The impressive growth has
surprised many analysts who believed it would take at least five years for Viva
to break even. Defying the odds, Viva started clocking profits in just 20
months, says Viva news editor-in-chief, Karaniya Dharmasaputra.
“Although we are a new player, we
recorded 20 million visits last month. We are surprised not only by the number
of visits but the promised continuity of this business,” Karaniya tells GlobeAsia.
While online advertising
generates significantly less profits than print media, Viva’s advertising
revenue still grew 35% last year.
Karaniya says the growth of
people accessing media online has grown almost fourfold. “There is a shift in people’s
attitudes, especially for those under 30.
They don’t read newspapers anymore
even though their parents still subscribe,” he says.
In terms of broadcast, ANTV’s
strengths are in football and entertainment programs, with its Indonesia Super
League (ISL) topping the charts as the most-rated sports program last year. In
second place was Super Deal 2 Milliar, a profitable and image-boosting ANTV
“ANTV is like a media
supermarket. It broadcasts all kinds of programs including entertainment, while
tvOne is focused on news,” notes Erick, adding that Viva plans to launch sports
and entertainment channels that can be accessed from mobile phones as well as
expand its production studios from nine to 13 this year,” he said.
For Viva’s independent
commissioner RM Djoko Setiotomo, the group’s subsidiaries have shown solid
performances. ANTV, for example,
generated strong profits out of its soccer program. yes”>“The biggest problem with local start-ups is financing, so we
can help finance and market their product,” he says. “So far, only foreign
movies flood onto Indonesia’s TV screens. We would like to see Indonesian
content aired in Europe and America in the future,” he notes, adding that Murdoch
will help open up new markets for local content.
“For example, one young software developer in Bandung successfully sold
his ‘ESIA Hidayah,’ a phone application that provides Islamic content. The
production cost was only Rp40 million, but it will generate revenues of around
Rp7 billion a year.
“There is a lot of talent out
there and not enough money is being spent to support it, but at least we have
this synergy in this that works,” says Anindya.
Anindya earlier launched a
Rp100-billion incubation fund to support local content players in expanding
their businesses. “The first goal
is collaboration. We are going to enlarge the market first then we will start
strengthening this collaboration in terms of quality. In the future, we want
creative people to become not just the vendors but also the owners of this
business,” says Anindya.
Back to basics
Stepping back from the hype,
independent business analyst Teguh Hidayat was more ambivalent about Viva’s future success. Noting that the company
made profits after just three years of operation, Teguh also pointed out that
Viva has also amassed $995 billion in debt.
In the eyes of investors, says
Teguh, media shares are not a “hot” stock, while Viva’s Bakrie connections may
mean the company is viewed as a political tool rather than a credible business.
“For share investors the best way
is short-term trading, but long-term investors should wait until the group
announces big steps that will boost share prices in future,” he says, adding
that the new sports and entertainment channels are likely to have a good impact
on Viva’s share price.
While Teguh acknowledged that
internet businesses are the next big thing, he was surprised by Viva’s equity
“Usually its parent or affiliated
company will help boost its assets,” he estimated, warning that debt-based
businesses always face difficulties in the future. yes”> “It will depend on the corporate actions taken by its parent
company, particularly the Bakrie Brothers Group.”
The Murdoch, Bakrie and Thohir
trio make Viva the convergence point for three very powerful families – within
Indonesia and far beyond.
Australian tycoon Rupert Murdoch boasts
a global media empire, while the Bakrie Group, founded by the late Ahmad
Bakrie, is known for its aggressive expansion in the energy sector, among a
swathe of other markets.
Viva chairman Anindya says the
Bakries and the Thohirs share good business and personal relationships – both
are originally from Lampung – and believe family values are a fundamental
element of business growth.
“The family is a solid base and
is central to ensuring that our business is blessed with longevity,” says
Erick, adding that his family has always supported his move into the media
The Thohir family interests have
their roots in Astra International, a leading automotive firm established by
Teddy Thohir and William Soeryadjaja.
Erick’s brother Boy Thohir is
known as a tough investment banker with a controlling interest in Adaro, one of
Indonesia’s largest mining firms.
Through its $2 billion holding
company Trinugraha Thohir, the family has an increasing interest in the
automotive industry, especially motorcycles.
The Wahana Group is a main
reseller and financing agent through WOM Finance, where the family has a 20%
The Thohir family also has
interests in property and lifestyle businesses and shares in 30 outlets of the
Hanamasa and Pronto restaurants.
While its main focus is still the
energy sector, the family controls significant shares in the Adaro Group, along
with tycoon Edwin Soeryajaja, TP Rahmat and Sandiago Uno.
Erick says that his parents still
control 75% of shares in the family company, while the rest are divided between
their three children, Boy, Rika and Erick, although Boy is the figurehead.
As a self-confessed stubborn kid,
Erick says one of the reasons he was drawn to the media industry was to carve
his own path. Separately, he has a stake in the Mahaka group, along with Wishnu
Wardhana, Muhammad Lutfi and R. Harry Zulnardy.
The Mahaka group has interests in
plantations and trading as well as media operations such as JakTV, Republika
daily, Radio GenFM and lifestyle magazine A+ among others.
“All the founders of the Mahaka
Group agreed not to get involved in sectors that our families already work in.
I am interested in media as a business, not for its power plays,” says Erick,
well known as a keen basketball fan.
Outside of his business
interests, Erick promotes basketball throughout the country and was head of
Indonesia’s Basketball Association (PERBASI) until 2006.
He set up the ASEAN Basketball
Association, in collaboration with Tony Fernandez from AirAsia. “We purely aim
to make a profit out of Asia’s strong interest in basketball and so far we have
made good progress,” he says. GA