| Danial Norjidi |
EMERGING markets offer tremendous opportunities, and it is crucial for businesses to understand the local nuances in these markets to be able to create a product that resonates with the people there.
These points were made during a presentation by Azran Osman-Rani, the CEO of iFlix, who discussed ‘The iFlix strategy of constant innovation’ during the CEO Summit 2017 at the International Convention Centre in Berakas in May.
In his presentation, he spoke about the journey to creating iFlix as a game changer from the ground up, transforming the way Southeast Asian customers’ access entertainment content, and continuing to innovate in a rapidly changing world.
iFlix was launched on May 26, 2015. “So two years ago, it was still just a bunch of guys at the Mid Valley Mall in Kuala Lumpur furiously clicking away at our laptops. That’s all we were. Fast forward to today, iFlix is now in over 20 countries,” he shared.
“Let me share some context why we think there is tremendous opportunity by thinking differently,” he said, noting first that “when you step out and look at the world that we live in today in these emerging markets, the opportunities are massive.
“Today, even if you exclude China and you exclude India, not only are there over a billion users in emerging markets, there are a billion mobile-connected users today. What gets us even more excited is over the next few years, by 2020, that number will double.
“So today, in the world that we live in, there are a billion people who are not even connected to the Internet yet. Yet, they are going to over the next few years as smartphones proliferate.
He noted that the price of a good Android smartphone that connects them to the world of the Internet has now plummeted to under US$35. “And so, Internet connectivity, for the very first time, is coming to the hands of over a billion people in emerging markets.
“A lot of people they want to be entertained. They want a lot of things. Entertainment is one of them. The other thing that’s happening is television and video consumption is moving to the small screen.
“We might have grown up in the days where we watch the television in our living rooms with a big screen TV, but if you ask your kids today, over 60 per cent of the video consumption is on the small screen,” he said. “Even when you gather them in a living room as a family, they’re all watching their own shows.
“So the world is changing. The mobile phone has been an incredibly powerful and empowering device that opens up the world of the Internet to everyone. But here’s the thing. Telecommunications companies are rushing to spend trillions of dollars in capital expenditure to roll out telecom networks, data networks, 4G networks, some people are even talking about 5G today.
“But in a lot of these emerging market countries, network coverage is no longer the issue, because the populations of these countries that live in network coverage areas but are not yet connected do not have a mobile Internet subscription. So network is not the main reason or barrier. Accessibility is no longer an issue.
The real issue, Azran said, “is the availability of relevant local content, because in emerging markets, that western view, that English-dominant view, doesn’t appeal to most of the population. And this is something that we, as businesses, have to be careful of because we’re not in this demographic. We communicate in English, we have our iPhones, we can use our credit cards, we have a Facebook account, but to 90 per cent of the people in emerging markets, it does not resonate there.
“So if we’re going to try and create a digital service, it has to be something that appeals to them not just from a linguistic point of view, but from an emotional and cultural point of view so that they will take up the service.”
He went on to note, “One more thought from an infrastructure view also is that in these emerging markets, as much as telecommunications are rolling out all these fast 4G networks, even by 2020, over 70 per cent of network coverage in emerging markets will still be 2G and 3G technology.
“So the dream of high-speed 30, 50mb per second mobile Internet connectivity will still remain a dream for many years to come in these vast emerging markets, but that doesn’t mean that we can’t create digital products. We just have to engineer it differently to make it work on these networks.”
He explained that iFlix was created to provide a mobile-first video and demand platform, recognising that for this target demographic, the mass market, they use mobile phones as their primary device.
They aimed to be able to, for an affordable price, provide thousands and thousands of hours of entertainment at their fingertips, easily curated, and to provide a wide selection, he shared, “not just English shows, but Korean dramas, Japanese anime, Thai horror shows, Filipino soaps, Malay comedies and animation.
“While Hollywood does have an appeal for this mass market, it has to be localised to provide subtitles, and this is where you have to be on the ground to understand,” he affirmed. “For example, the Bahasa that we use for Malay in Malaysia and Brunei doesn’t work in Indonesia, and vice versa. In Myanmar there are two different scripts and you need to be careful which script you use, or the Arabic that’s spoken in North Africa doesn’t translate to the Arabic that’s spoken in the Gulf. And so, understanding these nuances requires us to be on the ground.”
Continuing on how iFlix has worked to innovate, he said, “While the guys in Silicon Valley are focussed on how do we stream on ultra-high definition, 4K and 8K, how does it work on a big 80-inch flat screen TV, our engineering is focused on how do we make iFlix stream on a sub 1mb per second 3G connection without buffering? It’s a very, very different technology challenge. When we focus on the new, emerging markets we can understand that these are the realities you have to solve. It’s a very different technical challenge.
“But even if you could solve that challenge, people aren’t going to consume their precious gigabytes of data just watching lots and lots of TV shows because data’s precious, and so we would have been the first to figure out it’s actually important to figure out how do you download your shows so that when you get to a public wifi spot or when you’re at the office and you have a wifi connection, you can quietly download shows on iFlix onto your phone and then on your commute back home or at home, you can watch it offline without requiring a data connection.”
Azran went on to highlight, “So, in summary, iFlix is about addressing all the pain points. How do we create something that’s incredibly affordable at a retail price of about US$2 a month, and having thousands and thousands of shows across multiple genres because people have different interests, to be able to have features like the ability to download and watch offline, to not be bound by contracts?
“Every time you see pain points, it’s an opportunity to create something that’s different, as long as you have the best interests for the customer,” he added.