Bakrie’s media firm aiming for 30% hike

JAKARTA. Media corporation PT Visi Media Asia (VIVA), which is controlled by businessman Aburizal Bakrie, is confident that its revenues will increase by 30 percent this year now that the company has secured exclusive rights to air the 2014 FIFA World Cup tournament.

VIVA Group deputy president director Robertus B. Kurniawan said that his company was set to see bigger returns with this year’s two major events — the World Cup tournament and the presidential election — expected to bring larger audiences and further increase income from advertisements for the company.

 “We are targeting to see at least a 30 percent rise in revenues, particularly from advertisements,” Robertus said

The company has yet to announce its 2013 financial report, but president director Erick Tohir said that VIVA’s revenues last year were estimated to have reached Rp 1.3 trillion (US$106.34 million), a 4.8 percent increase compared to Rp 1.24 trillion in the previous year.

In its first nine-month financial report, VIVA reported Rp 1.13 trillion in revenues up to September. Advertisements contributed to 99.8 percent of the company’s revenues.

Robertus said because the World Cup tournament would take place concurrently with Ramadhan, and given that the tournament would be broadcast around sahur (pre-dawn meal) time, the event would not disrupt the ratings of VIVA’s prime time programs and would guarantee more viewers.

Both the World Cup and the fasting month will commence in June.

According to a company statement, television ratings during sahur usually reached 11 percent, a 480 percent increase compared to ratings at that hour during other months.

This year, the statement said, VIVA was keen to see its channels’ ratings during sahur soar by about 700 percent thanks to the soccer matches.

VIVA will broadcast 64 World Cup matches through its terrestrial channels, ANTV and TV One, as well as through a pay television channel it is about to establish. The company also plans to make the matches available through online streaming via viva.co.id.

Erick added that besides the tournament, the election year would also bigger fortunes for the company, as it would especially bring in more viewers and advertisements, especially to its news channel TVOne.

 “The year 2009 [the previous election year] alone brought a 43 percent increase to the ADEX [television advertising expenditure] thanks to election related coverage,” Erick said.

The company is also planning to disburse Rp 1 trillion in capital expenditure (capex) this year to develop its terrestrial and pay television services.

Robertus explained that about Rp 400 billion would be invested for pay channel Viva Sky, while the remaining amount would be used to build studios.

He said that the capex would be sourced from bank loans and from the Initial Public Offering (IPO) of its subsidiary, PT Cakrawala Andalas Televisi, which operates ANTV.

Robertus did not specify how much the company targeted to obtain from the IPO. He said that the group planned to sell a 20 percent stake of ANTV assets and it hoped to see the subsidiary go public before the second half of this year.

Bakrie Group recently made an ambitious move to expand its media empire by chipping in $25 million to Path, an online social network gaining traction in Indonesia.

VIVA president commissioner Anindya Bakrie, son of Golkar Party chairman and presidential hopeful Aburizal Bakrie, said that Bakrie Group would continue to invest in the media sector, and would especially explore opportunities on the Internet. (Anggi M. Lubis)