The Strategist

Netflix, Chill: Indonesian Internet Provider Attempts to Keep Netflix Away From Audience

01/28/2016 - 14:11

Yesterday, the largest Internet provider in Indonesia, PT Telkom Indonesia, blocked access to the American video service Netflix. The provider explains the blocking by absence of the license, but analysts believe that local providers are afraid of competition from Netflix, which is rapidly winning the worldwide audience.

MoneyBlogNewz via flickr
MoneyBlogNewz via flickr
Indonesian state Internet provider PT Telkom yesterday closed access to services of the US company Netflix, which provides on-demand streaming video over the Internet. In the beginning of the year, the company, which entertains 44 million viewers in the US and 75 million - around the world, has extended its service to 130 countries. Even then, the Indonesian government has presented to Netflix a number of working conditions, including tax payment in accordance with local law, establishment of a local office, employment of local staff. Yesterday, management of PT Telkom Indonesia pointed out absence of license as a reason for blocking Netflix; besides that, alleged presence of violence and pornography in the content also played its role. The state company said that it has no intention to completely close the service to its subscribers; rather, it wants American service to comply with local laws.

In turn, the US company stated that it does not offer services similar to those provided by traditional broadcasters, so the company reckoned that it did not need to receive such a license. At the same time, Netflix has assured that it intends to work in full compliance with local Indonesian laws. Experts point out that since Netflix began offering services to subscribers from Eastern countries, it will have to face many challenges - from the local bureaucracy to censor content. "As the company is growing in Asia, it will need to think not only of creative content for Asian countries, but also on how to restrict certain content - eMarketer senior analyst Paul Verna quoted by Forbes.- The company will have to deal with such tasks in countries such as China, Indonesia and Middle Eastern states."

Other analysts believe that local competitors fearing audience outflow may throw obstacles to Netflix’s way. "The company has potential to disrupt work of the local television and film industry. In fact, they have common audience: urban residents who prefer to watch foreign movies, shows and sitcoms - said the Executive Director of the Jakarta Institute for Information and Communication Technologies Heru Sutadi in an interview with The Wall Street Journal.- And now the audience can go to Netflix, ceasing to pay for premium subscriptions to local service providers and operators, as Netflix allows paying less."