Market Insight

New SVoD service launched in Malaysia and Philippines

June 04, 2015

Jun Wen Woo Jun Wen Woo Senior Research Analyst, Online Video

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Online video subscription service iflix has been launched in Malaysia and Philippines in late May 2015. iflix has secured content deals with local and international content providers, including Twentieth Century Fox , BBC Worldwide, and Warner Bros.  iflix catalogue comprise of over 10,000 hours of local, Asian and Western TV show and movie content. iflix is available at a monthly fee of RM10.00 ($2.70) in Malaysia and P129 ($2.89) in Philippines with 14 days trial period. The service is available on PCs, mobile devices and connected TVs with a limit of 5 devices per account and 2 simultaneous streams.

iflix raised $30m round of investment from Malaysia-based investment firm, Catcha Group and Philippine Long Distance Telephone Company (PLDT) earlier this year. The service plans to roll out in Thailand, Indonesia, and Vietnam during 2015.

Our analysis:

Malaysian online video market remains very underpenetrated. Market is dominated by one big player - Astro, satellite pay TV operator with multiscreen service Astro on the Go and standalone SVoD proposition Astro Plus. Astro on the Go is only available to Astro pay TV subscribers offering limited number of channels, while Astro Plus is available to everyone in Malaysia for RM15.90 ($4.29) a month. iflix can compete with Astro Plus in terms of price, but Astro’s content proposition is superior to iflix. Astro’s content partners include HBO, FOX, SPE Networks, NBC Universal, AETN and others. Tonton, ad-funded catch-up TV service owned by Media Prima and providing VoD and live access to TV3, NTV7, 8TV and TV9 channels, is also posing a competition for the audience.

Online video market in Philippines is more diverse. HOOQ, SVoD online video service by Singtel, launched there in February 2015; HBO Go Asia is available for SKYcable subscribers, and local service Blink TV is offering a combination of SVoD and TVoD business models. HOOQ is offering content from Sony and Warner Bros at a monthly fee of P199 ($4.45). It also partners with Globe Telecom to provide telco's GoSURF and Tattoo broadband services customers with bundled access to HOOQ. Blink TV is priced at P250 ($5.59), offering mainly Hollywood movies and TV shows. Blink TV partners with Smart, a mobile operator owned by PLDT, to offer movie bundle to its subscribers in Philippines. iflix has to keep its competitive pricing and content rich in order to compete with the existing market players.

On the one hand, iflix is entering markets that are underpenetrated and easier to compete in, but on the other hand nascent markets usually have high level of piracy and low acceptance of paying for content concept. Piracy in the forms of DVDs, using VPNs and P2P networks are very popular in the region. iflix will struggle to compete with illegal sites and providers in terms of content, but with monthly price lower than a movie ticket or even a pirated DVD, it still stands the chance to attract an audience and stir it away from the pirated content.  With the right mix of price, content, and available devices, iflix is capable of capturing the audience base in Southeast Asia and it has at least a year to do so before Netflix comes to the area.

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