Rapat Pimpinan Telkom GroupRapat Pimpinan Telkom Group
“Trend of Digital Media
and Games in Indonesia”
Gamechanics : Aula Barat ITB, 19 Maret 2013
Joddy HernadySenior General Manager
Innovation & DesignCenterPT Telekomunikasi Indonesia
Huge number of event happens within 60 secs...
3
Source: Shanghai Web Designer, http://www.syncreload.com/2011/09/what-happens-in-1-minute-on-internet.html, 2011
Mobile Traffic Drivers
*Indonesia: ~180M, Smartphone:~30%
Mobile devices:Global: 10B, SmartPhone:
27%APAC: 5B, SmartPhone:
26%*Indonesia: ~180M, Smartphone:~30%By 2017, there will be
1.4 mobile connections
2G: 4%
Mobile Data Traffic (2017)
4G: 45%3G: 51%2G: 4%
4
world’s population
1.4 mobile connections (devices and M2M) for every member of the
world’s population
Mobile File Sharing (5.5%)
Mobile M2M (8.3%)
Mobile Web/Data (22.9%)
Mobile Video (63.3)
Note: * posisi tahun 2012
Perubahan Signifikan terjadi juga di Industri Game dunia
Stand AloneStand Alone NetworkNetwork SocialSocial CloudCloud
SmartphoneSmartphone
TabletTablet
Smart XSmart X
ArcadesArcades
PCPC
ConsoleConsole
Mobile ConsoleMobile Console
Mobile PhoneMobile Phone
SmartphoneSmartphone
Trend of Last 1 year : social games and Free Items Games
Potensi Indonesia
� High quality talents (artist & developers)
� Lower development cost
� Large and fast growing market
� Multicultural - rich contents & storylinesMulticultural - rich contents & storylines
− Strong educational support
− Adequate training facilities
− Exposure to global standard & partner
− Need stronger government support
TELKOM Support for Indonesian Game Industry
• Indigo Fellowship Program
• Indigo Venture Program
• Bandung Digital Valley Program, etc.
• Indigo Incubator
Telkom Game Platform & Ecosystem Architecture
GameDeveloper
s
B2C
Social Network
Game Platform
Gamers ( Kids,
Students
Online Mobile Store
Virtual Coin
System
In-Game Chatting
In-App/In-Game Purchase
Game Store/Portal
Settlement System
Subscriber Management
Content ManagementSupplier
Online Web Store
Game Publishers
Voucher Providers
(Tsel,
Telkom)
E-MoneyProviders
(Delima, T-Cash, etc)
B2B2C
B2BOffline
Distribution
Channels
Device Manufactures
Students, young
& product-
ivepeople)
In-Game Purchase
Social Networks
ChattingIn-Game Purchase
System
Report & Statistics
Game Center Game Center User API (Topup,
Consume, Transfer)
Game Center
User SDK
Game Center
Payment API
Management
DirectBilling
(Tsel, Flexi, Speedy)
Service Enabler
PC Client Game, Web
Game, Mobile Game
Digitisation is creating major shifts within the
media value chain ...
Media Value Chain – Convergence Trends around Digit isation
Content Creation
Content Delivery
User Device
Content Packaging
Non-Exhaustive
Content creators and aggregators moving into content
delivery
Content delivery companies launching their ow n devices
16
333366660000
launching their ow n devices
Equipment manufacturers moving into content packaging
and delivery
Content aggregators moving across the entire value chain
Telcos moving into content packaging
Individual creative artists taking on their own packaging and
delivery
And so the TIME ecosystem continues to undergo substantial change – the boundaries are becoming increasingly blurred
Utilities Automotive
Evolving ecosystem
Telecommunications
18A.T. Kearney Telkom MultiMedia 01-Feb-2012
Banking & Insurance
Health Care
Media & Advertising
Consumer Electronics
Media & Entertainment
Information Technology
Source: A.T. Kearney
Overall, digitisation is facilitating access to new audiences and personalised services, hence growing the pie‘ overall
Before digitization
After digitization
End of catalogue
Archives Hits
First broadcast
Blockbusters
1
Content Grades ‘in Scope’ –Before and After Digitization
19
Existing content that is now economically viable to distribute New content finding an audience thanks to the internet
Value Creation Threshold
Archives
Archives Hits
First Broadcast
Blockbusters
End of catalogue
User-Generated Content
Niche Content
Numerized Archives
catalogue 1
2
1
2
Signs indicate there is a tremendous market opportunity
available, driven by buoyant consumer demand for media
Media Opportunity in Indonesia
xx
Rising Consumer Spend(1)
Increasing Advertising
Spend (1)
Intense Media Usage
Increasing Attractiveness
of Media Sector
6th highest number of Twitter users globally
20.3 hrs of TV/ week (#1 in SEA, 2x Malaysia)
29% growth in online advertising
19% growth in multi-channel TV
advertising
10% growth in
8.3 hrs of radio/ week (#1 in SEA)
6 Telkom_M&E_strategy_kickoff_111122
(1) All Consumer and advertising spend data relates to 2010-2014 annual CAGR Source: Nielsen, PWC Media & Entertainment outlook, A.T. Kearney analysis
SpendTwitter users globally (Jakarta is ranked the 13th tweet-city)
41m Facebook users =
90% of Indonesian online users (#1 in SE Asia)
78% Internet-enabled phone penetration (#2 after Singapore in SEA )
22% growth in pay TV subscriptions
12% growth in digital music sales
6% growth in newspaper sales (with most other markets in decline)
8% growth in DVD sales – despite the
ongoing prevalence of piracy
10% growth in online
gaming spend
#3 country in Global Consumer Confidence Index
10% growth in newspaper advertising
6% growth in magazine
advertising
12% growth in
out-of-home advertising
TV and newspapers dominate the Indonesian Media
landscape
Indonesia Media Market Size (IDR Trillion)
2016 Market Size
Other 6%
Online 1% Music
2% OOH
3% Magazines
5% TV 32%
2011 Market Size
Music 1%
Gaming TV 38%
Online 3%
OOH 2%
Other 4%
Magazines 4%
Rp. 53 tr
Rp. 93 tr
22
Gaming 7%
Newspapers 45%
32% Gaming 5%
Newspapers 42%
38%
Although newspapers still have a large share of rev enues the industry has weak med-long term prospects, the growth will b e on TV and Online
Indonesia’s media market continues to grow at a strong overall rate of 12%, led by TV, Music, and online segments
24
FTA, Pay TV and online segments have the highest
growth together with moderate-high profitability
Media Category Attractiveness Summary
>10
3-4
Indonesia Market Size: Size of bubble denotes
relative 2010 revenues in Rp. tr
High 15x
FTA (13tr)
Physical Games OOH
Online Games
Online Music
Books
Radio
Social Networking Search
ion
TD
A
25
36 Telkom_M&E_strategy_external analysis
Size & Growth: Indonesia; Profitability & Valuation: International Players Sources: A.T. Kearney Analysis
3-4
2-3
<1
1-2
Avg. EBITDA %
0- 10%
10- 20%
20- 30%
30- 40% >40%
Growth 2011-2016 CAGR
Low 2x
Low 2%
High 20%
News- papers
(23tr)
Pay TV
Maga- zines
B2B
Cinema
Online Portals
Val
uati
EV
/EB
IT
TV will remain the most attractive segment
Summary Insights on Size, Growth, Profitability, Va luation
Online and digital Online and digital segments have highest growths of between
TV will continue to dominate media in Indonesia
1 TV will continue to be the medium of choice for advertisers as CAGR continues to grow at ~15%
26
Online and digital segments demonstrate strong growth
2 Online and digital segments have highest growths of between 20%-60%; however, impact by 2016 will still be limited given current small size of online / digital market
Print is declining, yet remains sizable 3
Despite the emergence of the online market cutting into the print share, print still contributes to over 30% of market size in 2016
Valuations are highest in Online and Gaming category
4 Valuations for gaming and online advertising segment is the strongest amongst media segments at 11x-14x
The new Kings of Media ?
Name: R. Murdoch
Age: 80
Net Worth: $7.6 billion
Focus: TV, Movies, Publishing
Background: Philosophy, Politics, Economi cs
Name: M. Zuckerberg
Age: 27
Net Worth: $17.5 billion
Focus: Social media
Background: Engineering
Old Kings New Kings
27A.T. Kearney Telkom MultiMedia 01-Feb-2012 5
Economi cs
Name: T. Turner
Age: 73
Net Worth: $2.1 billion
Focus: TV, Radio
Background: Classics, Economics
Name: A. Lagardère
Age: 50
Net Worth: $2.4 billion
Focus: Publishing
Background: Economics
Name: L. Page/S. Brin
Age: 28
Net Worth: $33.4 billion
Focus: Search, Music, TV
Background: Computer Science
Name: J. Bezos
Age: 47
Net Worth: $19.1 billion
Focus: Music, Video, Devices
Background: Computer Science
The Next hit can come from anywhere !
- Japanese hologram pop star, Hatsune Miku
2812
� Initially 2-D animated spokesmodel for Vocaloid, an audio synthesizer program – now a 3D superstar!
� Has become an international star ‒ Video game (Sega) ‒ Manga series ‒ Social networking site ‒ Likeness was launched into space ‒ 2012 Olympics performance poll ‒ Official Japanese sponsor for
Toyota Corolla
Who is she? Key Lessons
� Think outside the box – creatively and innovatively
� Creativity is not just in terms of content creation, but also in delivery and partnerships
The Future Trend of TVTV will be an digital device-connected like any other!
Users will choose their programming on TV streams and
watch where they go!
Simple standards that allow content to be published to
TV will evolve
31
Any connected device shall be able to provide TV
experience
Dynamics of Television Industry will change
tremendously!
APPLICATION
Single SubscriberApplication Server
SDP
id-Con:
Covergence
Digital
Innovation
id-Ring:
Toward The King of Digital Society
IDN 2015IDN 2015IDN 2015IDN 2015
2015: 15 M Household1 M AP Wifi
id-Ring:
Nationwide
BB Backbone
id-Access:
True
Broadband
Access
Broadband for
Home
Broadband for
Community
Broadband for
mobilityBroadband for Business
& Government
Digital Society:
InDiSo & InDiCo
32