Winds of change are blowing in the TV industry, some say, and it’s happening faster than anyone thought. Streaming services, the rise of Netflix, Amazon, and plans from majors like Disney in offering own streaming services, might eventually change the future of cable TV providers like Indovision (MNC Sky Vision), LinkNet (Lippo), IndiHome (Telkom), etc.

MSKY reported 3.7% year-on-year growth in third quarter, better than the first half, but the company’s gross profit dropped significantly by 24.4%. MSKY also recorded net loss of Rp101 billion in third quarter, expanded by 16.7% from the comparable period last year. FYI, MSKY recorded net loss of Rp137 billion in the first six months of 2018.

As a result, MSKY’s revenues grew only by 2.8% to Rp1.93 trillion in Jan-Sep 2018, while gross profit declined by 2.6%. MSKY then reported net loss of Rp238 billion in the period, lower by 17% from the corresponding period last year, but enough to wonder about future of this company.

LinkNet (LINK) was better with 11.5% growth in sales revenues to Rp2.79 trillion, while net profit expanded by 10% to Rp816 billion. Revenues from subscription fees of cable TV services, however, grew only by 9.4% to Rp668.5 billion in the first nine months of 2018. In third quarter of 2018, LinkNet’s growth was only 8% (year-on-year).

How about Telkom’s Indihome?

Well, in the first nine months of 2018, Telkom generated Rp1.29 trillion of revenues from TV cable services, an increase of 32% from the corresponding period last year. So, IndiHome is now two-thirds of MSKY, which used to dominate Indonesia’s cable TV market by more than 70% market share.

Both Telkom and LinkNet enjoyed strong growth from broadband Internet and network services. LinkNet, for example, generated Rp1.55 trillion of revenues from subscription fees from broadband Internet and network services in Jan-Sep 2018, an increase of 8.6% from the corresponding period last year.

Still, there is a question about the future of middle-man like MSKY and LINK in the distribution of contents with the rise of Netflix, own original content from the ones like Amazon, and own streaming services from major content producers. There are ongoing pressures to Telkom Group to unblock Netflix services following Netflix’s decision to provide Bahasa Indonesia content option and  its first Indonesia original Netfix film The Night Comes for Us.

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