iFlix, HOOQ jostle for SE-Asia’s VOD market

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With the launch of Kuala Lumpur-based iFlix earlier this week, South-East Asia now has two ambitious online video platforms attempting to introduce a pay model in the region.

Owned by Malaysia’s Catcha Group and Evolution Media Capital, iFlix is launching in Malaysia and the Philippines with 10,000 hours of Hollywood and Asian content, which can be streamed on up to five devices, including two simultaneous streams.

The company has content deals with Warner Bros, Twentieth Century Fox and BBC Worldwide and will also stream Korean, Chinese, Malay and Philippine movies and TV dramas.

Singapore-based HOOQ, a joint venture between Singtel, Warner Bros and Sony Pictures Television, launched in January with a similar content mix and multiple device offering.

“Across emerging economies, people have amazing stories and love stories. However, a few billion people have no quality way of seeing the best stories from Hollywood or their local market. HOOQ will change that,” said HOOQ CEO Peter G. Bithos in a statement back in January.

Initially available in Thailand and the Philippines, HOOQ announced a few days ago that it would also launch in India and has acquired content from Mumbai-based studios such as Disney UTV, Reliance Entertainment and Yash Raj Films.

Both services have beaten international rivals such as Netflix to South-East Asia – a region with a population of 625 million and growing smartphone usage – but they face a different set of challenges to the indigenous streaming services that have taken root in North Asia.

Audiences in this region consume both Hollywood, local and other Asian content with gusto, but disc piracy is rife and broadband speeds are still relatively slow in several South-East Asian markets.

And while South-East Asia has pockets of wealth, the region as a whole doesn’t have the same spending power or familiarity with online payment systems as North Asia.

As a result, sensitive pricing strategies are much more of a consideration for SVOD entrants in this region than they have been in markets such as Korea, Japan or Australia. Services have to be cheap when consumers can find nearly everything on a pirated disc for a few dollars. Online streaming platforms in mainland China faced the same issue when they decided to go for a free-to-the-viewer, ad-supported model.

iFlix is offering customers a 14-day free trial without having to submit credit card or payment details. Once payment kicks in, the service will cost $3 (RM10) a month in Malaysia and $2.9 (Pesos129) in the Philippines. Subscribers who commit to an annual plan receive a 20% discount in Malaysia and 15% in the Philippines.

“We created iFlix’s revolutionary service to cater specifically to the demands of Southeast Asian consumers,” said iFlix group CEO Mark Britt, who was formerly with Nine Entertainment’s digital arm in Australia.

“We understand that the media landscape today is changing rapidly and that viewers want greater flexibility with both what they watch and when and how they watch it. Iflix brings the best in entertainment to consumers across the region at an extraordinary price.”

HOOQ is also priced competitively with the service being offered to Globe Telecom customers in the Philippines for $4 (Pesos199) a month and for $3.20 (Rs199) a month in India.

Mobile delivery is also crucial in a region where fixed-line broadband penetration is low but smartphones and mobile broadband are opening up a whole new mass audience. Partnerships with local telecoms operators, who bring access to huge customer databases, marketing smarts and online payment systems, could also be a deciding factor in whether new services survive.

Both iFlix and HOOQ are well placed in this regard. Founded by a telco, HOOQ has distribution partnerships with two Singtel affiliates – the Philippines’ Globe Telecom and AIS in Thailand – while iFlix is partnered with PLDT, Globe’s rival in the Philippines.

As the monthly subscription charge is so low, more affluent consumers in territories where both services are available could presumably afford to sign up for both. But iFlix and HOOQ will inevitably go head-to-head with some segments of the audience. Their content offerings will make the difference between success and failure in such cases – and will also be critical to their survival when they eventually face global rivals such as Netflix and Amazon Prime Instant Video.

Both will have an advantage over Netflix in terms of Asian content at least in the initial stages – as both have already demonstrated that they have strong relationships with local studios, especially in the Philippines, Malaysia and India, and their executives have a longer and deeper understanding of what Asian consumers want.

However, Netflix has proved over and again that it’s a fast learner and is willing to not only pay for acquisitions but board projects as a financier to secure exclusive content. HOOQ and iFlix may find that they need to get involved in producing local content to differentiate themselves against each other, as well as give them the edge over international rivals.