Iflix, dubbed the ‘Netflix of Asia’, has been acquired by Hong Kong-based Tencent, as the firm takes another step towards its dream of becoming the streaming giant of South East Asia.
Financials of the deal have not been made public, but Tencent has confirmed the acquisition will form an element of WeTV, a sister-brand of the popular WeChat messaging application with the intention of being the dominant streaming platform of South East Asia.
“The purchase comprises a strong local network across emerging markets with a wide and compelling selection of video content such as TV shows, movies and local originals, to stream or download, on any Internet-connected device,” a Tencent spokesperson stated.
“Through the purchase, WeTV will further extend our presence in the video streaming industry across Southeast Asia, to reach a broader audience base within the region and to better serve our users with better viewing experience.”
With internet services becoming evermore popular across the region, this is certainly a useful time to supercharge the WeTV platform.
According to the most recent Cisco Annual Internet Report, while video traffic is increasing year-on-year due to the popularity, availability and affordability of the service, the increased quality of streaming services is also adding volume. The firm estimates by 2023, 66% of the installed flat-panel TV sets will be ultra-high definition (UHD), taking consumption habits up to 15 to 18 Mbps, more than double high definition (HD).
Additional data from S&P Global, the video streaming market in APAC is set to reach $19.9 billion by 2024, driven by adoption in China. The success of Netflix in the region is evidence of the enthusiasm of consumers, paid memberships have steadily increased to 19.8 million over the last few quarters, though it is generally accepted the local players are more likely to win out in this market.
There are of course numerous reasons why the regional players could win here, the creation of localised content through to being more compliant with the regulations of certain countries, but diversity and competition is only a positive for the consumer.
Tencent is a company which looks like it is in one of the strongest positions to capitalise on the growing enthusiasm for internet streaming services. Not only does it have the cash to aggressively capture market share, acquiring customers is an expensive business, it also has existing relationships with more than a billion WeChat users. Upselling a service to an existing userbase is a much simpler task than demonstrating credibility and value for a new brand after all.