Indonesia’s Emtek Group open to external funding for its video-on-demand service

Emtek Group vice-president Sutanto Hartono. Photo: company document

The Indonesian media and technology conglomerate Emtek Group is open to raising external funds to enhance its popular video-on-demand (VOD) platform Vidio, a top executive told DealStreetAsia. And as demand for video-on-demand grows, Emtek is looking to build more partnerships to enrich its content and reach more users.

“Currently, Vidio is our own. However, suppose we want to accelerate its growth, we will welcome [external] funding,” said Sutanto Hartono, vice president-director at Emtek group.

Hartono, however, declined to give a time frame for the fundraising or say how much Vidio, wholly-owned by Emtek’s subsidiary PT Surya Cipta Media Tbk, plans to raise.

Vidio, established in 2014, is modeled on the lines of the Indian video streaming platform Hotstar and offers free-to-air live streaming, catch-up broadcast, sports entertainment, and original series. Hotstar was launched in 2015 by Novi Digital Entertainment, a division of Star India.

“Vidio and Hotstar have similarities. Both originated from large media companies with a huge content library. Both platforms show free-to-air television, which is popular in India and Indonesia. We have also actively acquired sports rights and started original series shows. For monetisation, we have two revenue streams— advertising, and subscription-based video-on-demand service,” said Hartono.

Vidio became popular when Indonesia hosted the Asian Games in 2018. At the time, Vidio obtained rights to stream the Games, including those events that had not been broadcast on TV. Given the exceptional response from viewers, Emtek took the platform more seriously in early 2019. 

Now, Vidio has got a further shot in the arm from the COVID-19 pandemic. Both traffic and app downloads of Vidio have surged as people, confined to their homes, looked for entertainment on digital platforms. In March 2021, Vidio’s monthly active users stood at 72 million. In Q1 2021, Vidio was the most downloaded app among peers such as WeTV, Viu, iFlix, and Qiyi, according to App Annie.

Forging partnerships

So far, Emtek has partnered with Wattpad, an online social storytelling platform backed by the South Korean media company NAVER Corp. Under the partnership, Vidio will acquire some of Wattpad’s popular stories and stream them on its platform. NAVER had invested $150 million in the Emtek group in March this year when the latter raised 9.3 trillion rupiah ($635 million) through the issue of new shares in a private placement.

The group is also exploring the possibility of embedding Vidio on the Grab platform. The Emtek group and the Southeast Asian superapp Grab have cross-holdings.

Emtek group last week increased its stake in Grab’s Indonesia unit to 5.88% of the total paid-up and issued capital. It is now engaged in discussions on how the two can co-operate. Grab, too, had acquired a 4.6% stake in the Emtek Group, along with NAVER, during the private placement in March.

“We are happy with what we’ve focused on. The utilisation is getting higher, the loss has tapered, and the path to profitability is something that we have already seen,” said Hartono.

Building digital and healthcare verticals

The Emtek group, controlled by the Sariaatmadja family, has been in Indonesia’s media business for decades. It is one of the country’s biggest media giants besides Hary Tanosoedibjo’s MNC Group and Chairul Tanjung’s Trans Corp. Media apart, Emtek has interests in telecom and banking as well.

Now it is building two other business pillars — digital companies and healthcare.

Emtek Group Business Portfolio

One of its early digital bets was the Indonesian marketplace Bukalapak. Emtek had invested in the company in its early stage in late 2013, after meeting Bukalapak co-founder Achmad Zaky. Later it also developed and invested in digital companies, including the digital wallet DANA, Qerja, Tix. id, and other startups. 

The company also expanded into healthcare by acquiring a 73.89% stake in OMNI Hospitals Group in December last year, as it sees healthcare as a strategic and potential sector in Indonesia. Emtek is also an investor in the telemedicine app Klikdokter, which is backed by the private drugmaker PT Kalbe Farma Tbk.

It is now trying to bring synergies between the various business verticals.

Emtek has set out to build a data management platform by integrating data from the media business and Bukalapak.

Bukalapak has seven million Mitra Bukalapaks — a term used for individual agents and mom-and-pop stores networks. “Mitra Bukalapak mostly sells FMCG products. FMCG is the biggest spender among media advertisers. So we concentrate on building a data management platform by combining the data from Bukalapak as the transaction point, and our media that reaches millions of audiences every day,” he said.

Integrating the data aims to understand user behaviour and give a better view of customers. Therefore, the company can seize a large pie of the advertisement, not only from the media and digital sector but also in the offline sector. 

Digital companies and the health sector accounted for 13% of Emtek’s total revenue of 3.12 trillion rupiah ($215.55 million) in Q1 2021.

Meanwhile, the media business — two national TV stations, digital media, and entertainment — accounted for 45% of the total revenue. The rest was from the business solutions, including the telecom and banking solution system.

“Currently, we’re still in the breeding stage for our digital businesses. In the next 3-5 years, we see a clearer path on how we can integrate those pillars, whether in the form of transaction, payment, telemedicine, or others. At this moment, we’re going to transform our media businesses as content and advertising services,” he said.

Andi Haswidi contributed to this story.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.