Volume 7, Issue 5, May – 2022 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Analysis of Telco Operators in Attracting Netflix

Subscribers in Indonesia Using Porter’s 5 Forces.
Alqardio Fristly1,*, Dadang Gunawan2
1
The graduate program in Telecommunication Management, Faculty of Engineering, University Indonesia,
Depok 16424, Indonesia
2
The graduate program in Telecomunnication Management, Faculty of Engineering, University Indonesia,
Depok 16424, Indonesia

Abstract:- The coronavirus (COVID-19) pandemic began internet service access to use video streaming services.
to infect several countries in the world, one of them especially in Indonesia, there is an increase in Video on
Indonesia. The government of Indonesia implements on Demand service providers who use the internet by
physical distancing to preventif coronavirus (COVID-19) providing streaming websites such as Hooq from
and implementation health protocols. Refer to the policy Singapore, Netflix from America, Viu from Hong Kong,
has impact of activities outside such as prohibited Catchplay from Taiwan, Iflix from Malaysia, and Genflix
gatherings and cause a crowd. Activities that are usually from Indonesia [2].The Indonesian people like to choose
carried out outside are shifted to work form home. During Netflix because Netflix has special features with the latest
work from home some people prefer to spend that time and most popular films. Netflix is able to support the
watching a Netflix streaming services, when their rest the Indonesian economic market through local shows and
time. During the coronavirus (COVID-19) pandemic, that promoting national cinema.
Netflix streaming services is often used by the public so it
becomes an opportunity to collaborate with Telco Netflix's growth from 2017 to 2020 has 203.66 million
Operators in Indonesia such are PT. Telkomsel, PT. XL- paying subscribers worldwide [3]. In the Asia Pacific
Axiata and Indosat Ooredoo. Each of these operators region, especially Indonesia, Netflix's position is at the top,
trying to attracting subcsribers Netflix with special identical to streaming content, based on Nakono.com data,
attention, such as providing various internet quota Netflix subscribers reached 907,000 in 2020 [4]. Netflix
packages for Netflix streaming services. As time goes on in Indonesia's revenue in 2020 is reported to have increased to
2021, activities that are required work from home are around US$76.6 million [4]. Netflix Chief Content Officer
slowly not being implemented and some activities are Ted Sarandos said that while Netflix could survive the next
allowed to be carried out outside from home. What is the few months, and projected gaining 7.2 million subscribers
strategy in dealing with these conditions and how to attract by the end of 2021. However, with Netflix's very rapid
Netflix Subscribers, especially in Indonesia, through Telco growth, it is predicted that it will not last long if the
Operators such are PT. Telkomsel, PT. XL-Axiata, and coronavirus (COVID-19) pandemic ends then work from
Indosat Ooredoo. Therefore, this study uses the Porter’s 5 home switch to the office.
Forces method by analyzing Telco Operators in attracting
Netflix subscribers in Indonesia. By mapping similar In early 2021, Netflix's stock began to decline
competition, suppliers bargaining power and according to Bloomberg as much as 13 percent. in
opportunities for Telco Operators to attract Netflix Indonesia Q1-Q2 Netflix revenue was 883,000 subscribers
subscribers. The results of this study use Porter’s 5 Forces [5]. in the situation of the coronavirus (COVID-19)
Telco Operators to attracting Netflix subscribers with a pandemic, remaining at the end of 2021 in Q3-Q4 whether
competitive advantage from the pressure of threats of new Netflix can increase or decrease from the previous year.
entrants and similar competitors, as an indicator of the Netflix as one of the largest streaming services in Indonesia
strategy in the form of a product differentiation approach, with the largest number of subscribers so that it is able to
and as well as collaboration between Netflix and Telco cooperate with Indonesian Telco Operators such as PT.
Operators in Indonesia. Telekomsel, PT. XL-Axiata and Indosat Ooredoo. One
form of cooperation product offered by each Telco
Keywords:- Video Streaming Services; Netflix, Porter’s 5 Operator is various, such as internet quota packages,
Forces. bundling packages, and streaming service packages. On the
other hand, with the offer of the cooperation product, it
I. INTRODUCTION creates competition among Telko Operators in attracting
Netflix subscribers.
Starting from the emergence of a pandemic outbreak,
namely the coronavirus pandemic (COVID-19) which has Based on this, the author uses a method that is the
infected several countries in the world with limited space solution to this problem, namely by using Porter's 5 Forces
for people to carry out physical activities outside the home [6].The author can describe using the Porter's 5 Forces
such as working from the office, playing, and gathering [1]. Method to project the strategies, threats, opportunities of
One of the activities to fill these limitations while at home each Telco operator company in attracting Netflix
or on the sidelines of rest, people today tend to choose subscribers. And it is hoped that there will be mutual

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Volume 7, Issue 5, May – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
cooperation between Telko Operators in Indonesia and abomination of the government.
Netflix.  Bargaining the power of suppliers : analysis supplier
market, switching cost, replacment product and
II. METHODS dominant suppliers
 Rivalry among existing competitors : in this analysis
 Porter’s 5 Forces Model number of competitors , competitors products,
Porter's 5 Forces was first developed by Michael Porter competitor product differentiation.
[7]. This theory uses five tools in the analysis of the competitive  Threat of subtitute products : in this analysis product
environment that affects the Bargaining power of buyers, easy can be found and product can compete.
Threat of new entrants, Bargaining the power of suppliers,
Threat of substitute products and Rivalry Among Existing  Variables and Indicator
Competitors. By using this method, each Telko Operator can In this study, the variables and indicators refer to Porter's
attract Netflix subscribers and be able to work together. 5 Forces Model. further analysis of the variables that have been
determined by the author. For the weighting of each parameter
 Data Preparation of the indicator based on the assumption of points, it is done by
The result sof senior expertinte rviews from Telco assigning a value of 1 as relevant according to the conditions.
Operator companies in Indonesia, especially PT. Xl Axiata, PT. To calculate the percentage value of each Porter's 5 Forces
Telkomsel and Indosat Ooredoo [8-10]. The interview was model variable, use the formula below.
conducted online through a zoom meeting because it is still in
a state of the coronavirus (COVID-19) pandemic, the interview 𝑃𝑟𝑜𝑠𝑒𝑛𝑡𝑎𝑔𝑒 =
𝐼𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟𝑉𝑎𝑙𝑢𝑒
×
process was conducted in August to September 2021 for 2 𝑁𝑢𝑚𝑏𝑒𝑟𝑜𝑓𝐼𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟𝑠
months in a tentative. Here the detail of data that will be 100%........................................................(1)
analyzed
 Bargaining the power of buyers : in this analysis buyer  LOW : if 0 – 33,33%
contribution, product differentiation, switching cost,  MEDIUM : if 33,34- 66,66%
price purchase product and Information about the  HIGH : if 66,67-100%
porduct.
 Threat of new entrans : in this analysis switching cost, III. RESULTS
product differentiation, investment cost, customer
loyalty, access to distribution channels and the This study resulted in data that has been through
Porter’s 5 Forces model. We can see that table 1 of below.

Table 1. Prosentage Parameters with Variables and Indicators.

Parameters Variables Indicators Value
Threat of switching cost. Low switching cost. 0
new entrans product differentiation. New entrans has not differentiation product. 1
investment cost. New entrans has not large invest to begun. 0
customer loyalty. Disloyal customer for porduct. 0
access to distribution channels. Easily get channels to customers. 0
Easy entry to suppliers. 1
the abomination of thegovernment. Easy new entrans to entry the industry. 1
Prosentage Level’s Medium 42%
Threat of product easy can be found. Customers get easily product of subtitute. 1
subtitute product can compete. The product get can be competetion. 0
products The product has cheap a price. 0
Prosentage Level’s Low 33%
Bargaining buyer contribution. Customers not contribute to Telco Operators. 0
the power of product differentiation. The product not different with others. 0
buyers switching cost. Customer easy change seller without thinking a 1
price and quality consequences.
price purchase product. Price changes affect buyers. 1
Customers not interested in bundling prices. 0
Information about the porduct. Buyers do not always have complete information 0
about the product offered by the operator.
Product hard to find. 0
Prosentage Level’s Low 28%
Bargaining supplier market. The power suppliers important for Netflix. 1
the power of Netflix a potential market for supplier. 0
suppliers switching cost. Suppliers free to replace Netflix. 0
Suppliers free to choose Netflix. 1

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Volume 7, Issue 5, May – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
Parameters Variables Indicators Value
replacment product. Free to replace product subtitute. 0
dominant suppliers. Netflix not dominated by Telco Operators. 0
Prosentage Level’s Low 33%
Rivalry number of competitors. Large competitors not balance. 1
among Various Competitors. 1
existing Growth industry. Decrease competitors. 0
competitors competitor product differentiation. The standard of Product. 0
Product competitiors as same with others. 0
Prosentage Level’s Medium 40%

From the analysis of this research, competitive pressure is V. CONCLUSIONS

formed from the threat of New Entrants and Rivalry among
existing Competitors. The medium competitive level means Based on the above analysis, that Netflix has a high
that the profit potential of the Netflix video streaming service potential competitive advantage in the Service industry
industry is not optimal for the operator partnerships in with improvements from the pressures of Threat of new
Telkomsel, Indosat and XL Axiata. then re-analyzed to identify entrans and Rivalry among Existing industry
the opportunities and strengths of Netflix against Telco competitors.Telco Operator in attracting netflix customers
Operators in Indonesia. focused on the bargaining power of buyers and Rivalry
among existing competitors.
IV. DISCUSSION
REFERENCES
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competitors but has advantages from several aspects of genflix-hooq. [Accessed : 3-10-2021]
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[11]. Darmawan , Handito. SR Officer Operation XL
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Volume 7, Issue 5, May – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
AUTHORS’ INFORMATION FORM

Title page information for first page of the manuscript

<Please fill below information>
<Alqardio Fristly>
The Graduate Program in Telecommunication Management,Faculty of Engineering,Universitas Indonesia,Indonesia

<Dadang Gunawan>
Professor Dadang Gunawan, Department of Electrical Engineering, Faculty of Engineering,Universitas Indonesia,Indonesia

(Should indicate corresponding author)

<Dadang Gunawan>

First Author – Information

<Please fill below information>
Name(*Author’s full name must (i.e, Expansion of initials)): Alqardio Fristly S.T
Designation :Universitas Indonesia
Department :Department of Electrical Engineering
University : Universitas Indonesia
Course : Telecommunication Management
Residential Address : Jakarta, Indonesia
ORCID id (if u have) : Null

Second Author – Information

<Please fill below information>

Name (*Author’s full name must (i.e, Expansion of initials)): Prof. Dr. Ir. Dadang Gunawan, M.Eng.
Current Designation :Universitas Indonesia.
Current Department :Department of Electrical Engineering
University :Universitas Indonesia
Course :Wireless & Signal ProcessingTechnology, Telco Management and Regulation
Residential Address : Jakarta, Indonesia
ORCID id (if u have) :0000-0002-6320-0003X

First Authors biography

Alqardio Fristly,The Graduate Program in Telecommunication Management, Faculty of Engineering,

Universitas Indonesia, Kampus Salemba,Jakarta, Indonesia.Alqardio Fristly received the bachelor’s
degree in computer engineering from theTelkom University in 2016. He is currently employee in Bank
and student of Faculty of Engineering, Universitas Indonesia.His interests are in Cryptocurrency
Technology, Telco Management and Regulation

SecondAuthors biography

Dadang Gunawan,Department of ElectricalEngineering, Universitas Indonesia, KampusDepok,

Depok,Jawa Barat, Indonesia.Dadang Gunawan received the bachelor’s degree in electrical engineering
from theUniversity of Indonesia in 1983, the master’sdegree from Keio University, Japan, in 1989,and the
Ph.D.degree from the University ofTasmania, Australia, in 1995. He is currentlya Professor with the
Department of ElectricalEngineering, Universitas Indonesia.His interests are in Wireless & Signal
ProcessingTechnology, Telco Management and Regulation

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