Streaming service iflix is positioning itself to undercut big SVODs like Netflix and Amazon in emerging markets.
iflix launched in 2015 and currently has about 5 million subscribers. According to Variety, the service recently launched in the Middle East and North Africa (MENA), and it is focusing on localized content there to help it compete with Netflix and Amazon.
Nader Sobhan, head of MENA for iflix, told Variety that his company is taking a gamble by producing original content in languages like Arabic, but that the content is resonating with consumers in areas like the Middle East.
“Our three pillars are: localization of content, which is particularly important to us; international content, because we want to make sure we have a lot of good international and Hollywood content that draws people into the service; and lots of regional content such as Turkish and Bollywood shows, which perform really well over here,” Sobhan told the publication.
iflix’s work to secure market share in regions like MENA comes as major U.S. SVODs are expanding globally and using their deep content budgets to secure rights for, and produce localized content in, emerging markets. But that push could further inflate Amazon’s already massive content budget.
Jefferies analyst Brian Fitzgerald estimated that Amazon’s video content budget for 2016 was between $4 billion and $5 billion, but that the cost of international expansion to nearly 200 countries could drive that total up another $1 billion to $2 billion in 2017.
“That would bring AMZN's annual content expenditure in line with Netflix, which disclosed ~$6B content budget on P&L basis for 2017. AMZN management highlighted on the last earnings call that content was among the top three categories in which the company was, and planned to continue, investing. On the call, CFO Oslavsky said that ‘video content and marketing associated with that’ was nearly doubling Y/Y in 2H16,” Fitzgerald said in a research note.