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<h4 style="text-align: justify;">Although Indonesia's media market is very open from a regulatory perspective, the industry is concentrated in the hands of 12 major media groups. Most of these own multiple media channels, with a strong focus on the main medium, television. The ubiquity of television, together with the popularity of mobile phones and the rapid uptake of social media, also makes Indonesia one of the largest advertising markets in Asia, with a number of international and local agencies delivering a wide variety of multi-channel advertising.</h4>
<h5 style="text-align: justify;">12 diverse media groups control nearly all media channels</h5>
<p style="text-align: justify;">While Indonesia's relatively open regulatory media framework initially led to the creation of a large number of media companies, like most open markets it eventually reached a point where commercial consolidation was inevitable. Merger and acquisition activity has been intense over the past few years, resulting in 12 large and diversified media groups. Between them, the 12 groups now own around 60 tv stations, 60 radio stations, 320 print titles and 10 substantial online properties.</p>
<p style="text-align: justify;">Media Nusantara Citra (MNC) Group is the biggest media group, with 3 terrestrial television stations, 3 Pay-TV stations, 14 local television stations and 22 radio stations spread across Indonesia, as well as newspaper and print tiles. They are also major shareholders in e-commerce player Rakuten Belanja, and in 2013 launched a joint venture with the Chinese internet giant, Tencent.</p>
<p style="text-align: justify;">Kompas Gramedia Group is the leading newspaper publisher in Indonesia, with 27 newspapers in print, a successful online site in kompas.com, and both tv and radio stations.</p>
<p style="text-align: justify;">Jawa Pos News Network has the biggest newspaper network in Indonesia, and now publishes 171 newspaper titles, as well as owning 20 local television stations.</p>

<h5 style="text-align: justify;">Increasing focus on digital media</h5>
<p style="text-align: justify;">The media companies own six of the top twenty Indonesian sites by traffic (detik.com, kompas.com, kompasiana.com, okezone.com, tribunnews.com and tempo.com). These are primarily news-led sites, with the exception of kompasiana.com which is a user-generated journalism site.</p>
<p style="text-align: justify;">MNC has been the most aggressive mover in the internet sector, setting up Okezone in 2007, E-commerce venture Rakuten Belanja in 2011, and launching a JV with Tencent in 2013.</p>
<p style="text-align: justify;">Kompas Gramedia has been the second most active, relaunching kompas.com in 2008, introducing a suite of smartphone apps in 2011 and 2012, and launching digital publishing service Gramediana in 2013.</p>

<h5 style="text-align: justify;">A US$ 10 billion ad market in 2013</h5>
<p style="text-align: justify;">Indonesia has the largest ad market in SE Asia in dollar terms (forecast to be US$ 10 billion in 2013). It also has the second largest mobile ad market in the world by volume, with more than 200 billion ads delivered to mobile phones in 2012.</p>
<p style="text-align: justify;">Television is currently around 60% of total ad revenues, followed by radio, print and the internet. Note, however, that the reach of the internet exceeded that of both radio and print in 2012, so rapid growth in internet ad spending is expected. Indeed, Indonesia is likely to become a leading-edge market for mobile advertising globally.</p>

<h5 style="text-align: justify;">A future clash is coming between the media giants and the mobile operators</h5>
<p style="text-align: justify;">Based on their current trajectories, the media giants and the mobile operators are on a collision course in Indonesia.</p>
<p style="text-align: justify;">The battleground will be internet services. The first major skirmish is likely to be in the area of messaging.</p>
<p style="text-align: justify;">In the first quarter of 2013, Indonesia's largest media company MNC announced a joint venture with Chinese internet-giant Tencent, with a primary focus on bringing Tencent's WeChat messaging app to Indonesia.</p>
<p style="text-align: justify;">Two days earlier, the mobile companies had announced their intention to create an industry-wide messaging app, with the express purpose of preventing services like WeChat from squeezing their profits.</p>
<p style="text-align: justify;">What this signifies is the start of a huge battle for the control of internet services and applications in Indonesia. The media companies feel they should be kings: after all, they are experts in publishing content. The mobile players believe the field should be theirs: after all, they own the networks over which everything is carried.</p>
<p style="text-align: justify;">Neither side will emerge outright victors. Indeed, both sides may finish behind the internet players (either foreign ones such as Facebook, or Indonesia's own future internet champions).</p>
<p style="text-align: justify;">But the battle is just starting, and the winners will be billions of dollars richer by the end.</p>

<h6 style="text-align: justify;">Sources: BRTI, The Economist, World Bank, APJII, Manchester Business School, Jakarta Post, Alexa.</h6>
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