Sharks, pirates hinder Indonesian file hosting giant Indowebster’s desire to scale up

“55 percent of the files on Indowebster are illegal content,” explains chief operating officer Abang Suluh Husodo. “But the users love it. We evolved from sites like Rapidshare, Imageshack and YouTube.” 2014 marks the seventh year of operations for Indowebster. Referring to Indonesia’s slow connection speeds of the past, Husodo says, “Everyone’s problem in 2007 was international links. If you wanted to buffer YouTube, it was very, very hard, even if you just wanted to listen to music. Now with Indowebster, everyone can stream YouTube content locally.”

Established in April 2007 and widely-known as Indonesia’s founding father of multimedia file hosting, Indowebster, powered by Maxindo, is now looking to scale up the business side of its already large operation. It also plans to diversify its services to open new streams of revenue. According to Husodo, while the service Indowebster offers is robust and ubiquitous across the country, the firm only has ten employees to date, the majority of whom are positioned on the technical development side of the company.

Swimming with the sharks

Indowebster is the undisputed champion of file hosting in Indonesia, but when it comes to community size and online forum popularity, it sees the strongest competitor in fellow local behemoth Kaskus. Indowebster will need to hire some key marketing talent for expansion if it hopes to stay competitive, and Husodo even goes so far as suggesting the idea of poaching some of Jakarta’s seasoned internet professionals. Without mentioning specific names, he also brings up potential investors: “Since 2009, we’ve just been listening and listening to people who are interested in investing, but even now we still have no deal because our founder is really, really strict about investments.”

Since the beginning, Indowebster has not received any outside investment, and has been funded by its founder and CEO Juny “Achong” Maimun. In the past, Maimun had insisted that all potential investors be local Indonesian players. “But right now maybe he has changed his mind,” Husodo says. “The amount of investment we’re looking for is around 15 or 20 billion rupiah (US$1.2 to 1.6 million).”

Abang Suluh Husodo, right.

A pirate’s playground

Indonesia is known as one of the more relaxed countries when it comes to sharing copyrighted material. You see bootleg DVD shops on every street corner. However, in April last year, the Business Software Alliance in cooperation with the Indonesian police busted as many as 200 local companies in Subang, Bogor, and Cikarang for running pirated versions of Adobe, Autodesk, Microsoft, and Symantec in an effort to make a statement about illegal software use in the archipelago.

Husodo says that on any given day, he receives up to 50 emails asking him to take down copyrighted files on Indowebster. The site targets the lower-middle class of Indonesia, and as a result, a large number of its users don’t have smartphones or access to online payment systems. “The real challenge is how to honor those copyrights, and the other is payments,” he says. “It’s hard to charge people for downloads, so this is why we have to collaborate with [local e-commerce players] to solve this issue.”

According to him, Indowebster is not yet profitable and its primary sources of revenue are digital advertisements and other services such as setting up data storage for other companies. In reference to the company’s desire to scale up, Husodo says, “We’re still considering concepts, not necessarily like cloud services, but maybe Indowebster can be a hub for any business.”

He cites other practical applications for the site, including “video selling,” in which users may sell their products and services on Indowebster through self-made informative videos in a similar but more sohpisticated way as OLX, formerly known as Tokobagus. Husodo says, “We have the community to keep this business working, but changes will need to happen because most investors and advertisers want to put their money where it’s all legal.”