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Taking on Netflix in Southeast Asia

A bet on localized content

August 9, 2017

Subscription video-on-demand (SVOD) services in Southeast Asia are spending on local content in the hopes of cornering these emerging markets.

This week, Malaysia-based SVOD platform iflix announced it had secured $133 million in a fresh funding round, on top of the $90 million it garnered back in March. The company said the new money would be directed to generating localized content in the 19 markets it now serves in Southeast Asia, the Middle East and Africa, as well as to technology.

iflix is up against some stiff competition in Southeast Asia, where it faces off against some other well-funded SVOD services, including Netflix, Amazon Prime Video and Singapore-headquartered Hooq, which counts telecom Singtel among its owners. But in practical terms, it also faces a challenge from free VOD services like YouTube.

In fact, research from JakPat shows that YouTube was the clear mobile video app leader in February among mobile video viewers in Indonesia, one of the markets where iflix is present. The survey found that 56% of mobile video viewers polled used YouTube. iflix also trailed over-the-top (OTT) VOD service Viu, which is offered for free in many of the same countries in which iflix operates.

Leading Mobile Video Apps Used by Mobile Video Viewers in Indonesia, Feb 2017 (% of respondents)

Separate February 2017 data from AIP Corporation found that 39% of internet users in the Philippines with an SVOD subscription said they had signed up for iflix. That was far behind Netflix (60%), but slightly ahead of Hooq (32%).

iflix’s uneven position in various markets in Southeast Asia is somewhat reflective of the unsettled nature of the SVOD sector in the region. SVOD players are still intent on grabbing as much market share as possible, with self-produced, localized content emerging as the preferred method for doing so. iflix is one such service intent on differentiating itself from Netflix by doubling down on local content.

“We’ve realized the key for us is local content, not the Western content studios—the majority of our top 10 content is regional or local,” iflix CEO Mark Britt told TechCrunch following news of its new funding round.

In late July in Malaysia, iflix launched its first original production, a comedy series titled “Oi! Jaga Mulut,” with versions of the show from Indonesia and the Philippines also in the works. That’s in addition to its claim of acquiring content from 230 studios located in 30 different countries. iflix has even gotten into live streaming sports, having brokered a deal with Indonesia-based television station tvOne to host soccer matches.

The service also claims to target a different market segment than Netflix by focusing on consumers who make less than $10,000 per year and charging them a fraction of what Netflix does.

But Netflix also sees clear value in investing in programming that originates from somewhere other than Western studios to broaden its appeal. This month alone, Netflix announced the launch of two original series targeting its users in India, while also revealing its first Chinese-language self-produced show.

Rahul Chadha


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