May 18, 2017 10:00 am JST

Malaysia's iflix sets its sights on emerging-market eyeballs

Mark Britt, the Australian co-founder and chief executive of iflix, is clear about his company's focus: emerging markets and their vast, barely tapped opportunity. "We are passionate [about the] billion people who will have smartphones for the first time in their life in the next five years," he said.

The Malaysia-based company sets its average streaming speed at around 0.6 megabits per second, much slower than Netflix's recommended network speed of 3 megabits per second for standard-definition video. Additionally, all iflix content is downloadable, so users can watch programs later without worrying about interruptions in the stream.

Monthly subscription fees are in the $2 to $3 range, which Britt describes as "less than a pirated DVD."

He cited estimates from the Motion Picture Association of America that consumers spend around $6.2 billion on pirated DVDs each year. "People are willing to pay for content," he noted. "But they will pay [for licensed material] only if you provide better alternatives than pirated stuff."

Britt added that iflix tailors its offerings to each market. "We put everything into the local language," he said. "We even censor according to local community rules, market by market."

The company also curates lineups specifically for each country. For example, it is preparing to offer South Korean dramas in Ghana because it discovered that the best-selling pirated DVD in the West African country is "Descendants of the Sun," a popular South Korean TV series.

The company also produces original shows. In some Muslim countries, it offers original stand-up comedy routines -- a category that is banned on broadcast TV.

Britt cited industry estimates that in five years streaming services will have 300 million to 400 million paid subscribers in emerging markets excluding China and India. These are exactly the eyeballs that iflix hopes to attract. Assuming subscription fees of $2 per month, that would put the industry's annual emerging-market revenue at $7 billion to $9 billion.

The opportunity is enormous. "We don't find hiring people difficult," Britt said with a grin.

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