Star TV, Rupert Murdoch's Asian broadcaster, acquired a strategic stake in an Indonesian television network on Thursday, securing a place in one of Asia's fastest-growing markets, the two companies said.
Star TV, a satellite and cable operator based in Hong Kong, will buy 20 percent of the national network ANTV, giving it a firmer foothold in Indonesia, Asia's third most populous country. Star TV pay-television services are already available on cable and satellite in Indonesia.
The deal is a politically delicate marriage. Advisers to the Star-ANTV transaction were concerned that Murdoch's high profile could spur public opposition to the deal. Moreover, ANTV is owned by the family of Aburizal Bakrie, Indonesia's chief economics minister, drawing even more scrutiny.
In an effort to head off any opposition, ANTV has promised to improve the quality of news broadcasts and secure their independence. It has already hired away one of Indonesia's most respected news directors from a rival network.
ANTV executives said that control over programming, particularly news content, would remain in Indonesian hands.
"This is good for both parties, good for the country. Star is bringing in a lot of experience from the international market," said Anin Bakrie, who heads ANTV and is the eldest son of the economics minister.
But he added that Star was intent on supporting the growth of "local expertise and content."
Jannie Poon, a spokesman for Star, said, "This brings us the opportunity to learn from a local partner in Indonesia."
She added that Star intended to be a "low key" investor and that "control remains with ANTV."
The deal helps extend Star's reach in Asia at a modest price. Bakrie declined to disclose what Star paid, but analysts said it was probably well below US$20 million.
He also said that the company had been profitable for the last three years, without elaborating.
Star TV already broadcasts 50 television services in Asia in eight languages, with China and India among the markets.
In Indonesia's crowded television market, ANTV is a low-ranked but promising partner.
Its share of Indonesia's 180 million viewers has crept up to 5 percent from 2.5 percent in the last three years. According to a weekly audience survey by AGB Nielsen, the network generally rates as the country's eighth most popular service.
Local television advertising grew by almost 30 percent last year, to US$1.4 billion, 69 percent of all advertising.
In the first seven months of this year, ANTV received 896 billion rupiah (US$86 million) in advertising revenue, according to an AGB Nielsen estimate.
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