Iflix, a video on demand service aimed at emerging markets, has certainly lived up to its reputation as a fast mover since it first started looking at the region barely a matter of months ago.
Indeed, the Malaysia-based video on demand service already formed a joint venture company with Kuwait’s Zain Group, and launched operations in each of the telco’s eight operating countries, as well as opening an office in Dubai and working on a plan to start services across the rest of the region soon. Oh, and it also managed to co-produce content for the MENA region, including an Arabic comedy starring Egypt’s top actors. It is perhaps not surprising then that we found the company’s regional head, Nader Sobhan, in an upbeat mood just a few weeks after the company launched services in Zain’s markets.
“Five months ago I was alone in the region. In those five months we have done an amazing job of hiring talent, getting the contracts in place, getting the deal with Zain in place,” he says. “All of these achievements we have done so quickly for this launch phase and now we have just launched it’s amazing to see the numbers rapidly click in.” The speed of the launch is in line with the big ambitions of iflix’s founders, Mark Britt and Patrick Grove, who have set a target of 1 billion subscribers globally by 2020. Having first launched its service in Malaysia in May 2015, iflix established itself in Asia, rolling out its service to nine markets in less than two years and acquiring over 5 million members over the period, according to CNN. Interestingly, the iflix team believes it can take its learnings from Asia and adapt them for other emerging markets including the Middle East.
“In South East Asia, there is a revolution in entertainment going on. There is a huge emerging class coming into prominence and we started to address that in South East Asia first,” Sobhan says. “When we first started off with the concept of subscription VoD we saw that there were challenges. We realised that content had to be relevant and localised, the product itself had to work and function in difficult internet environments and had to have the proper speeds for it to work, and we had to offer different means of payment because credit card penetration is low. Also, the price points of other SVOD platforms were too high, so we started addressing all of these things in South East Asia”
The iflix team soon realised these challenges were, to slightly varying degrees, common to most emerging markets, and so started looking at areas ripe for expansion. “I have been based in the Middle East for over 10 years now and it is one of the most exciting, dynamic, growing markets,” Sobhan says. “The emerging middle class is booming and there’s a lot of dynamism.” iflix’s first step in the region was to partner with Zain. “We kind of complemented each other. We had the deep catalogue and the understanding of content, the platform and a service that is fantastic and they gave us the network speeds and the connection to the users, and a strong brand that we could leverage. Together we are approaching the market that way,” Sobhan says.
iflix and Zain Group actually established a joint venture called iflix Arabia to bring iflix’s service to the Middle East and North Africa (MENA). The joint venture is headquartered in Dubai and trades commercially as iflix in Zain’s territories of operation: Kuwait, Bahrain, Iraq, Jordan, Lebanon, Saudi Arabia and Sudan, with the potential to further extend into additional regional markets. While iflix is looking to expand its services more countries across the MENA region, Sobhan adds that the company is also keen to ensure that it is properly ready to do so, and that means it must be able to offer a service that is of value to each new country. This desire to offer a relevant service particularly applies to iflix’s more recent push into content. The company started producing content in Asia only quite recently and has already learnt much from the experience, including how well content from one country may or may not work in another country or region. iflix is also well aware of the nuances between different parts of the Middle East and intends to produce content tailored for the various distinct parts of the region.
“We want to be deeply involved in entertainment so we don’t look at the UAE as one monolithic block, we don’t sit back and switch it on,” Sobhan says, when asked about the timing of iflix’s launch in the UAE. “We look at it in a cultural context, at a country level so we look at the Gulf, at the Levant, Egypt and Sudan, and we look at French speaking North Africa as very separate areas. We’re not in a rush to switch on [in new markets such as UAE] and then not provide customised services. We have the ability to launch in multiple markets but we want to do it right and we want to serve the people right.”
While iflix is bringing a large catalogue of Hollywood, Bollywood, Asian and Arabic content to the region, it has already co- produced its first Arabic series, Waklinha Wala, a 30-episode Egyptian comedy series. Waklinha Wala features many of the top stars in the Arab world and is co-produced by Ahmed Helmy’s production company, Shadows, Front Row and the Kuwait National Cinema Council. The plot depicts the lives of four families living in a rundown building in Cairo’s renowned 5th district as they try to repair and rebuild the disintegrating building. Among the stars in the show are Fifi Abdou, Hassan Al Radad, Nicole Saba, Dalal Abdel Aziz, Sherif Salama, Hany Ramzi, Edward, Hisham Abbas, and Mohamed Fouad.
The show is currently live across iflix Arabia’s eight markets and is available as a box set, as well. “We’re aiming to revolutionise the way entertainment works and that means not only in the way it’s distributed and consumed but also through processes of how it’s being produced,” Sobhan says. “Usually these kind of shows go straight to the FTA or Pay TV broadcasters, particularly during Ramadan, the most competitive season, with all the top stars. This shows our commitment to localisation to being part of the ecosystem of localisation. You name the star, we’ve got them in this.”
Sobhan points to some issues in the MENA region’s content where iflix could break the mould. For example there is a tendency for broadcasters to spend a disproportionate amount of their content budgets on Ramadan productions and content. He adds that there is also “less experimentation” in the region, and producers seem to stick to mostly comedies and drama only. “What we are trying to do is support producers, involve ourselves with them and encourage more experimentation to take place,” he adds. However, this is just the beginning. Sobhan stresses the importance of ensuring a broad range of local content. “Just having Arabic content on our platform does not cut it; you have to look at it down to the country cluster level, so we have Khaleeji content and Lebanese content for example. We are tweaking our content per country. We will have a selection of Western content, the ‘hyper local’ down to the country level, panArab and regional, including Turkish content.”
He adds that subscribers in the Middle East also have access to a range of Bollywood and Asian content and that iflix will “keep experimenting” to see what works. “We are focused on the mass market and we want to provide entertainment to the widest possible group of people. This means we need to give relevance to all of our viewers. Even within a single country the viewership is diverse. For example, Saudi is not just Riyadh or Jeddah, it is also the northern territory. We want to integrate and include everybody,” he adds.
COMPETING WITH PIRACY
The OTT video on demand space in the MENA region is becoming increasingly competitive with Shahid, icflix, Starz Play and Netflix among the platforms vying for a slice of the market. While many people consider the monthly subscription of these services to be relatively low, iflix’s service is available at a price point that is significantly lower. Indeed, the average cost of monthly subscription across iflix’s markets is between $2.50 and $4.
“If you think of Netflix or Starz Play as cheap you are thinking through lens of the UAE and we miss the fact that for the mass market, for everyone, from Egypt through to Iraq, the price point is actually not that accessible. We are not actually competing with them; they have their target market. What we’re actually fighting against is piracy,” Sobhan says.
In emerging markets, this low price point is crucial in terms of winning over users from pirated content. “We believe no-one wakes up wanting to be a pirate; they just want their content and if you give it to them in an easy, accessible, simple manner and affordable price, they will pay. But we have to build that up and we have to focus on a price point that is $2 and less.”
iflix has also pioneered new ways of accessing content that helps win over subscribers in emerging markets. For example, the company was the first VoD platform to offer secure downloads, allowing subscribers to download and watch content offline. This is an important service in markets where internet access is patchy.
Another area where iflix engages with local markets is censorship. This is not an easy task as no content producer wants to see his work censored, especially if it has the potential to disrupt the storytelling process. However, in many of the markets where iflix operates, including Indonesia, Pakistan and Saudi Arabia, a certain level of censorship is inevitable.
For iflix, it is important to speak to local regulators to ensure that if content is censored, it is done in a way that makes sense.
It is also important to ensure that the relevant authorities understand that if content is censored in the wrong way, it could compel viewers to access the content through other – perhaps illegal – means.
“Interesting thing about censorship is that if you sensor too much people will turn to piracy, so it’s a duel edged sword. What we do is work with regulators and try to understand their points and help them achieve their objectives. We will censor but not to the point where it doesn’t make sense any more. We censor in subtle ways,” he says.
Despite iflix’s rise to become the biggest VoD platform in South East Asia and its ambitious plans for the MENA region, Sobhan says that the company will never be complacent.
When asked about the future of linear broadcast and OTT services he concedes that it is difficult to predict the future. “One of the truisms of the internet is that no-one knows. What we have is a model that works so far,” he says.
“We also have the humility never to assume that we are right. We are going to continue to experiment. Part of our culture is to be curious and curiosity has to be integral to what we do. We always question ourselves and keep testing things. When people say ‘but that’s the way the industry works’ we find a way to break it.”