Indonesian media conglomerate PT Media Nusantara Citra (MNC) teams up with Baidu-backed on-demand video streaming platform iQiyi to launch a joint venture to operate an over-the-top (OTT) platform in Indonesia.
MNC will own 51% of the JV, according to an official statement. The two companies will merge their content libraries and also produce original content.
Known as the ‘Chinese Netflix’, Beijing-based iQiyi is one of the largest online video sites in the world with more than 100 million paying subscribers. iQiyi produces original television programs, reality shows, and online movies. In its home country, the platform is in tight competition with Tencent Video and Alibaba-backed Youku Tudou.
iQIYI will support the new Indonesian entity with its technology and support its future development while MNC will be responsible for marketing and promotion as well as regulatory matters.
Like other OTT players in the region such as iFlix, The iQiyi-MNC platform will operate with freemium model instead of Netflix’ subscription-only approach.
The firms want to “capture the opportunity in both the fast-growing digital adspend and online subscription in Indonesia”, according to their statement. The platform is set to start its operation in the fourth quarter of 2019.
Compete to win the Southeast Asian audience
With more than 400 million internet users, Southeast Asia is a hot market for the video streaming industry. At the APOS conference in Indonesia in April 2019, iQIYI’s president of membership & overseas business group, Yang Xianghua, said that his company is looking to expand its services across ten countries within the region, signalling that iQiyi’s international expansion will not stop in Indonesia.
iQiyi’s move to expand into the region’s largest market further strengthens its competition with Tencent Video that has launched a VoD service in Thailand earlier this year under the brand We TV. It provides Chinese, Korean, and US content popular in Thailand, while also partnering with local producers to develop original Thai content.
iQiyi and Tencent Video have massive user bases in China, and via Baidu and Tencent, are backed by two of the most poweful internet companies in the country.
Their entrance into Southeast Asia means a tightening competition with regional players such as iFlix, which originally hails from Malaysia, and Singapore-based Hooq, which has formed a strategic tie-up with Grab.
While Netflix offers blockbusters and renowned television shows, other streaming services offer more localised and non-English content to cater to the diverse viewers in the region. Some are also offering live TV content next to their on-demand libraries.
Just earlier this year, MNC had also invested in iFlix. As part of the deal, iFlix was said to plan to acquire approximately 10,000 hours of content from MNC’s library of top programs for exclusive streaming and MNC’s content would also be available on iFlix platform for free. MNC CEO David Fernando Audy was appointed as a member of iFlix’ advisory board at that time, according to the firm’s statements. KrASIA has reached out to MNC to clarify if and how the JV will impact MNC’s collaboration with iFlix.
