Sky, one of the Europe’s largest media companies, is investing USD45m in Southeast Asian SVoD service iflix. Sky operates across the UK, Ireland, Germany, Austria and Italy via its DTH pay TV services and OTT platforms; NOW TV, Sky Online and Sky Go. Sky’s investment consists of the purchase of USD 2.5 million shares from existing investors which include Indonesian media company Emtek, as well as investment groups Catcha Group and Evolution Media Capital.
iflix launched its services in May 2015 and is now available in Malaysia, Thailand and the Philippines, reporting 1 million subscribers as of 11th December 2015. The investment is aimed at helping iflix to accelerate its growth in Malaysia, Thailand and the Philippines and entering new Southeast Asian markets in the coming months.
Local partnership to tackle market challenges – piracy and unwillingness to pay
Online video players often struggle the current Southeast Asian market, where pirated content is usually widely available and consumers' propensity for paying for content is low. Online video service providers have to continuously innovate to encourage consumers to pay for content, and to provide exclusive content at a reasonable price. In February 2016, iflix revealed its plan to expand its service to other emerging markets in Asia, Africa and Eastern Europe. Top countries in its expansion list include Indonesia, Vietnam and Cambodia.
In Malaysia and the Philippines, iflix collaborates with mobile operators and broadband internet service providers to boost subscriber growth. iflix partnered with Digi, a mobile operator in Malaysia, on operator billing and offered consumers who signed up with certain Digi plan one year free subscription to iflix. Similarly, new sign-ups for UniFi and Streamyx broadband services will also get free access to iflix for a year. In the Philippines, iflix partnered with Philippine Long Distance Telephone (PLDT). From last December, all Smart, Sun and TNT (all are PLDT-owned mobile operators) subscribers will receive a three-month access of iflix subscription bundled with their existing service, at no additional charge. PLDT Home (broadband providers) subscribers will also enjoy 12 months of iflix at no additional charge. These partnerships have given iflix instant access to a substantial potential subscriber base through the existing customers of local operators.
Partnership with Sky will further strengthen iflix competitiveness in the region
iflix competes with other players in Southeast Asia such as HOOQ and Netflix. HOOQ, which is backed by Singtel, Warner Brothers and Sony Pictures, is currently present in the Philippines, Thailand and India. HOOQ primarily targets emerging markets within the region where Singtel operates, allowing it to extend the company’s existing businesses through partnerships. Netflix entered the region through its expansion to 130 additional countries in early 2016. However, the price of Netflix monthly plan is more expensive than rival service offerings in the market.
iflix’s strength is its availability of local content and subtitles, as well as the ability to download content for offline viewing. This partnership is expected to increase the content library of iflix and to help the two companies expand further internationally.