The Importance of Appealing to Lower Income Consumers in Asia Pacific

Things are likely to get even more crowded and competitive. Hotstar, the Disney-owned streaming service that has accumulated huge audience numbers in India, plans to enter Southeast Asia soon.

Speaking on a recent earnings call, Disney CEO Bob Iger said Hotstar would “expand into markets across Southeast Asia” over the coming five years. The platform claims 300 million monthly viewers in India thanks to a focus on sports in addition to movies and shows. Amazon is another deep-pocketed contender as it seeks to double down on Singapore, to date its sole market in Southeast Asia, where it may add video to its Prime subscription service.

Growth and Expansion in Global Markets

As is often the case in Southeast Asia, the Chinese are entering the equation, too. Internet giant Tencent picked Thailand as the first market for its first overseas video play, which launched in June. Its WeTV OTT service quickly expanded to Vietnam in July, where it is joined by rival Baidu, China’s top search firm, which also began offering video on-demand services in the country.

What Makes Iflix the Best Video Streaming Service For Emerging Markets (1)

Then there are the local giants which are doubling down on entertainment. Ride-hailing unicorn GoJek is working on a secretive GoPlay service, which recently got a limited beta launch among some users in Indonesia, and its fierce rival Grab has dipped its toes into the water through a tie-up that embeds HOOQ’s video service into its transport app.

Last resort

Last year, 2018, was annus horribilis for Iflix. The company set out to raise capital, but it was unable to secure a deal despite plenty of interest. It met with a range of potential suitors, including Chinese giants Baidu, Alibaba and Tencent (a collective known simply as ‘BAT’, such is their power and influence), two video streaming industry figures said.

Other interested parties included Chinese video company iQiyi, Indonesia’s MNC (Media Nusantara Citra)—an Iflix partner that was part of the recently announced round—and a US-based investment bank. A deal was targeted at closing by September, according to a former employee, but Iflix wasn’t able to land it, due to concerns around its immediate financials and future sustainability.

The funding situation was so dire that, at one point, a strategy under serious consideration was an initial coin offering (ICO). This would raise money through the creation of a dedicated Iflix crypto token sold to investors and the public. Iflix went so far as to consult with blockchain agencies over the concept, a figure within the blockchain industry told us, but ultimately it was scrapped.

Still, the fact that the company was willing to consider something as extreme as minting a crypto token underlines the extreme pressure that Iflix was under to raise fresh capital.

Unable to bring in the cash, it did the next best thing and cut costs while existing investors prepared to provide a bridge round in early 2019. Iflix sold its Africa business—Kwesé Iflix, which operated in eight markets—to Econet Group, a telecom firm that was already an investor in the business, in December 2018.