? Emerging markets hold high growth potential for smartphone-friendly services
? Piracy can be warded off by offering affordable access to quality entertainment titles
? Attention to local customs and tastes is essential to OTT success in Asia
Malaysia-based over-the-top service iflix has expanded rapidly across Asia over the past year, offering first-run TV series and exclusive movies through deals with more than 160 studios and partners worldwide.
S&P Global Market Intelligence spoke to Mark Britt, co-founder and group CEO of iflix, about the streaming startup's tactics for growth. Below is an edited transcript of the interview.
Mark Britt is co-founder and group CEO of iflix. He previously served as CEO of Nine Entertainment Co.'s digital unit Mi9 in Australia, and as the Singapore-based general manager of Microsoft Corp.'s consumer and online business in Asia-Pacific.
S&P Global Market Intelligence: Iflix specifically targets emerging markets. What is the reasoning behind that strategy?
Mark Britt: In many cases, these markets have leapfrogged mature markets in terms of infrastructure development and technology adoption. Over the next 15 years, we will see more than 3 billion people globally entering the middle class. Collectively, they will purchase 1 billion new smartphones. The bulk of these numbers will come from emerging markets.
With piracy prevalent across Asia, how is the service able to gain paid subscribers?
People across Asia and in emerging markets do not actively want to steal content; they do so because there is no better alternative. As consumers become more connected, gaining access to information and cultural influences on a global scale, they want to be entertained at [that] standard. We set out with the aim of offering an alternative that is better than piracy, by providing thousands of hours of high-quality entertainment, all for the price of a pirated DVD.
What are the cultural challenges presented by these markets?
It is crucial that content is respectful and relevant to local audiences and in line with local customs, laws and languages. There is no "one-size-fits-all," and the challenge is delivering world-class entertainment while remaining sensitive to varying needs and interests.
How does iflix distinguish itself from Netflix Inc. and Amazon.com Inc.'s Prime Video, as well as from regional competitors such as Hooq and Viu?
There are two prevalent models for OTT players outside the west: The local service that focuses almost exclusively on local content, languages and offerings; and established global players which have expanded internationally and see the rest of the world as a subset of the U.S. Some of these players may not pay local taxes, censor, establish any local presence in the country, or work with local producers and distributors. We believe that there is a third model, which is what iflix aims to embody. We have committed to bring international standards to emerging markets, by building a local company that is deeply committed and integrated in the local ecosystem.
How does iflix's Celebrity Playlists feature fit into that model?
We maintain close relationships with leading influencers and top celebrities in each of our markets. Our Playlists feature showcases each country's most popular local celebrities and allows our users to connect with them, as well as get recommendations on movies and TV shows. Celebrity Playlists, along with our broader influencer relationships, are a part of our overall localization strategy to offer the best, most relevant service to our local users.
Similarly, how do partnerships with local telcos factor into the service's growth?
We maintain close relationships with leading telco providers in each of our markets. They represent an important platform of growth for iflix [as well as] for our partners looking to build customer loyalty and acquire new customers. The relationship also allows us to further offer bundled services and integrated carrier billing in markets where credit card penetration and online payments are low, and not commonly used or established.
What other countries or regions are you looking to expand to next?
Iflix is currently live in eight countries across Asia: Malaysia, Indonesia, the Philippines, Thailand, Brunei, Sri Lanka, the Maldives and Pakistan. We've begun establishing a presence in the Middle East and Africa, and will continue rapid expansion in key emerging markets globally.
Are there any plans for iflix to develop original content?
We will be making announcements in relation to our first project very soon.