Market Insight

iflix Arabia is now available in Middle East and North Africa

May 11, 2017  | Subscribers Only

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

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Southeast Asian online video service, iflix is now available in eight countries in Middle East and North Africa region (MENA), including Saudi Arabia, Jordan, Iraq, Kuwait, Bahrain, Lebanon, Egypt and Sudan. 

iflix partnered with Zain, a Kuwait-based MENA mobile operator, to establish a joint venture called iflix Arabia. iflix has set up a new regional headquarters for MENA in Dubai. iflix claims to be the only international online video subscription service with full scale localised operations in each of its territories and with global headcount of 700 staff across 24 offices worldwide.

Our analysis

Joint venture with Zain reduces cost and mitigates risk

The joint venture partnership with Zain will enable iflix to leverage Zain’s 46 million customers (as of Q1 2017) as potential subscribers. Joint venture partnership also allows greater access to resources, including local market knowledge and human resources. Partnership with Zain helps iflix to promote its brand to local customers alongside with the well recognised mobile operator brand, which should help iflix to address the risk of brand sensitivity.

IHS Markit believes that the joint venture will speed up iflix’s global expansion plan, while reducing the cost and mitigate risk. iflix has been expanding rapidly since its launch in 2015 and it is aiming to further expand in Africa, follows by Latin America and Eastern Europe.

Zain will be taking over direct operator billing where IHS Markit believes it will be receiving a fee for every iflix customers signing up via the Zain platform. In addition, Zain will benefit from mobile video consumption which will drive revenue on its mobile networks with the wider adoption of 4G networks. Video partnership allows mobile operators to leverage demand for popular content to acquire and retain new users.

Competitive environment in the MENA online video market

Apart from brand sensitivity, compelling content is another major concern for international player to compete with local players. iflix claims that it will offer an extensive collection of Arabic shows and movies as well as exclusive Arabic content series. In April 2017, iflix has partnered with Dubai-based distributor Front Row Filmed Entertainment to co-produce Egyptian sitcom Tough Luck.

iflix’s international rivals Netflix and Amazon Prime entered MENA in 2016, while Viu entered the Middle East in February 2017. Besides international players, iflix will face competition from local players in the region including Starz Play Arabia, icflix, Go by OSN and Shahid Plus.

Localisation and competitive pricing strategies remain the keys to success

iflix claims it had achieves over 5 million subscribers in Asian markets. Its success in the region is due to extensive partnerships with local operators and studios and it has competitive advantage compared to other international players in terms of localised content and a more competitive pricing strategy.

IHS Markit believes iflix will expand to other countries in MENA soon as the company has been actively hiring in Kuwait City, Amman, Nairobi, Riyadh, Johannesburg and Accra. The company is also hiring in Prague and Melbourne that indicates that Eastern Europe and Australia could be next markets after MENA. With the right mix of content and pricing strategy, as well as payment solution, iflix stands a chance to outperform local players to capture the audience base in MENA.

Research by Market
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