Tencent snaps up assets of Malaysian streaming video service iflix in expansion drive
- The Chinese internet giant has agreed to buy certain content, technology and resources from iflix
- The deal is expected to help expand the audience of Tencent’s WeTV streaming video platform across Southeast Asia
Tencent Holdings has agreed to acquire a range of assets from Southeast Asian streaming video provider iflix, as the Chinese gaming and social media giant steps up efforts to build a service that could rival Netflix in that region.
Shenzhen-based Tencent said on Thursday that it will buy certain content, technology and resources from iflix, which has struggled from a diminished advertising market during the Covid-19 pandemic.
“This is in line with our strategy to expand our international streaming platform, WeTV, across Southeast Asia and provide users with international, local and original high-quality content in a wide range of genres and languages,” said a Tencent spokeswoman in an emailed statement.
The company declined to provide the cost of the deal, except to say it included video content such as TV shows, movies and local original [programming] to stream or download”. The transaction will also enable WeTV, which was launched in Thailand last year, to widen its audience in a region with an internet population of 360 million.
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Such a transaction with iQiyi could help lower the cost of buying and producing video content, as the industry struggles with a slowdown in online advertising.
“Content is king,” wrote Jefferies equity analyst Thomas Chong, lead author of a report on iQiyi released on Wednesday. The report also said online advertising for the company is expected to remain down in the second quarter from a year ago.
Most streaming video platform operators are faced with depressed advertising revenue, despite higher demand during the community lockdowns triggered earlier this year by the coronavirus pandemic. Hooq, the regional rival of iflix, shut down its operations in Singapore on April 30 after filing for liquidation in March, when the public health crisis intensified.
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Founded in 2014, iflix counts more than 25 million active users, but has been hit hard by decreased advertising income as the pandemic spread across its 13 markets in Southeast Asia and South Asia.
The Kuala Lumpur-based company cut jobs to control costs earlier this year, despite a doubling of users on the platform during the coronavirus lockdowns, chief executive Marc Barnett told Bloomberg during a television interview in May.
