SVOD start-ups HOOQ and iFlix are seeking to gain a foothold in Southeast Asia before Netflix has a chance to expand beyond its foothold in Australia and New Zealand and upcoming launch in Japan in fall 2015. Currently, there is little competition in the market. Strategy Analytics estimates that there were approximately 10.8 million SVOD subscriptions in the Asia-Pacific region at year-end 2014, accounting for just under 3% of broadband households (see Strategy Analytics Asia-Pacific OTT Video Forecast for more information). With over 378 million broadband households in the Asia-Pacific region at year-end 2014, according to Strategy Analytics Global Broadband Forecast, the region is ripe for SVOD growth.

Expected to launch in 2Q 2015, iFlix will provide broadband households (fixed and mobile) in key Southeast Asian markets, including Malaysia, Thailand, Philippines, Indonesia, and Vietnam with over 10,000 hours of U.S., Asian regional, local market content, and original programming. Helping to fund its impending launch iFlix has secured $30 million in funding from corporate parent Catcha Group and the Philippine Long Distance Telephone Company (PLDT), the leading telecommunications provider in the Philippines.

One of the biggest challenges facing iFlix, as well as any other video service provider in the region, is getting Asia-Pacific consumers to pay for content. According to iFlix chairman Patrick Grove, who’s also co-founder of Catcha, “more than 90% of Southeast Asian households currently consume pirated content”. Changing this mindset will not be easy but a vast opportunity awaits the company or companies that can “crack this nut.”