iFlix to bring on-demand download and play service to emerging markets

iFlix is convinced that while it's an on-demand streaming service, it's not a competitor of Netflix.

While iFlix has a coincidentally similar name to on-demand platform Netflix, the company has said its intention is not to enter the on-demand streaming market for the purpose of competing with others, but has pitched its motivation is to reap the rewards of helping cut down on piracy by offering on-demand download and play content at an affordable price.

In fact, iFlix chief technology officer Ash Crick agreed that while the names between iFlix and Netflix can make a good topic of conversation, he argued the two company's services are more complementary rather than rivals, as there is only a 10 percent overlap in content.

The main differentiator, Crick argued, was that it provides the ability to download and play -- something in which he claimed Netflix has suggested it will never do.

"For example, in the Philippines 1.8 million people have fixed-line broadband to the home phone, and out of a hundred million people, that is less than 2 percent of the population ... and that represents the challenge of how do you distribute the content to the 98 million people who don't have an internet connection at all.

"We've got the licensing rights to download and play for 95 percent of our catalogue. The difference is if it was done in America it would be a convenience feature ... in the emerging markets it's a distribution mechanism because a large amount of people would be able to pay for the subscription of iFlix and not have an internet connection.

"They could go into a Wi-Fi zone, which there is a lot of in that part of the world ... they can download three or four TV shows and put it on a Chromecast, plug it into the TV, and the whole family could watch it," he said.

He added that in terms of affordability, iFlix's service is only $2.50 per month, about a quarter the price Netflix currently charges.

Crick said for now though, the main focus is trying to overcome the 90 percent piracy rate in the three initial markets where iFlix has launched -- Malaysia, Philippines, and Thailand -- markets in which Netflix doesn't currently operate. Since launching five months ago, the company has had 450,000 sign-ups.

"Our biggest competition is not any potential provider that might come into the space; ours is piracy because it's free, and free is hard to beat in many cases. The only way you can is to have a superior product and not just that, it's giving people what they want, when they want, and where they want it, and with the range of content.

"As we have seen the behaviour in the rest of the world, in America there has been a big drop in piracy, and in Australia, Stan, Presto, and Netflix have helped reduced piracy by 25 percent. So it's nothing we haven't seen so it seems to be a common thing. For us, it's a great validation that they don't mind paying if they're getting something that they want."

Part of the company's initial business model was to be able to deliver at launch 10,000 hours worth of content -- without latency issues. Crick explained in order for that to have happened, the company decided to build iFlix completely on Amazon Web Services because "they break services down into components exceptionally well" and has available the "Lego pieces that you want to use to build".

"From September to just over six months we had to get up a full working product for preview, that's also at the same time of building a company. The product that we wanted to release at that time was one we knew had to scale to millions of people straight away; we couldn't be fluffing around.

"Our business relies on scale; we need tens of millions of people in order for this business to be sustainable, and that's how we've set the company up and intentionally so because we passionately believe good quality entertainment should be available to everyone at an affordable price.

"We need to leverage every possible short cut, every component, software, great people, and just need to get that mix of everything just right in order for us to do it successfully."

Specifically, one of the AWS services the company relies on currently is CloudFront for the distribution of its service via content delivery networks. Crick said that at the moment, the business is looking into other alternatives including using its own devices -- a method the business is piloting, or putting into some of the internet exchanges.

iFlix also relies on Amazon Kinesis and Elastic Search to help improve subscribers' preferences by collecting real-time data and using it to analyse real-time behaviour.

Crick said a majority of these services are being hosted from Amazon's Singapore datacentre, and a handful of other services from the United States because they have yet to be introduced to the local market. While he admitted that the company does face latency issues as a result of it, it can be forgone or accepted if it is known that the company is still able to deliver a feature that would improve the customer experience.

"We definitely don't take the purest approach that it has to be perfect, it just needs to be as fast as possible," he said.

While it's still early days, Crick said the next plans for the company will continue to focus on emerging markets, and potentially expand into the Middle-East and Africa.

Disclosure: Aimee Chanthadavong travelled to AWS re:Invent 2015 as a guest of Amazon Web Services.

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