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KUALA LUMPUR (June 25): Chinese tech giant Tencent’s move to acquire Malaysian video streaming platform iFlix is not expected to have a significant impact on Astro Malaysia Holdings Bhd’s market share in the country, said analysts.

The view is that Astro still commands a strong market share in the segment via the pay-TV service provider’s Astro Go and that it remains to be seen whether Tencent’s acquisition of iFlix would bring much changes to the local paid-for video streaming space.

“In the very long term, it might [have an impact]. But for now, I think it’s negligible,” said Hong Leong Investment Bank Research analyst Syifaa’ Mahsuri Ismail when contacted.

“Astro has its own Astro Go to cater to the market, on top of its premium service, Njoi, which has been gaining traction because of the economic downturn. The service has seen rising number of subscribers due to the service’s affordable price.

“Television still has a large audience in Malaysia compared with the market for video streaming services like iFlix and Netflix, which remains small, with audiences being largely concentrated in urban areas as opposed to other areas that might have connectivity issues,” she said.

This, she said, provides a comfortable space for Astro to maintain its strong position in the country’s the television and video content business.

According to an FT Confidential Research survey, Astro Go topped the list as the most popular paid-for streaming video service in Malaysia, followed by Netflix, Google Play and Unifi TV. iFlix was ranked fifth in the independent survey last year.

Syifaa’ also noted that Astro’s customer base is largely comprised of the T20 and M40 groups — the top 20% and middle 40% income groups — who have the purchasing power to subscribe to multiple services. This, she said, means it should not be an issue for Astro in the event that Tencent ramps up its iFlix content to entice new subscribers.

“Astro does have B40 customers, who are mostly subscribers of Njoi. However, because of the low fee offered by Njoi, this group of customers could also subscribe to additional services by other providers without the need to ‘sacrifice’ the Njoi service,” she added.

Her sentiment was echoed by MIDF Research analyst Khoo Zhen Ye, who concurred that the Tencent-iFlix deal has a “minimal” impact on Astro’s business, at least in the foreseeable future.

“Astro will maintain its market share for now. We have seen new players coming into the market, including The Star [Media Group Bhd]’s streaming service dimsum entertainment, but their traction is still small compared to Astro’s,” he told theedgemarkets.com.

Meanwhile, CGS-CIMB Research analyst Kamarul Anwar said the Tencent-iFlix deal is “not a game-changer for the media landscape” which is seeing numerous players vying for engagement time and share of consumers’ wallets.

“Astro shouldn’t worry about the iFlixes or the Netflixes or the Vius of the world. The real competition for time now comes from a myriad of things — PlayStation games, Fortnite, YouTube, TikTok, Instagram. This is why Reed Hastings (Netflix CEO) said Netflix’s competition [are] actually sleep time and Fortnite, instead of HBO GO or Hulu.

“And specifically, in the TV/content space, Astro’s competition lies in piracy. Piracy costs next to nothing, it has every show and movie that a viewer wants to watch, and it is becoming really convenient to obtain pirated content,” he said.

Viu is the leading over-the-top (OTT) video service spanning Asia and the Middle East. Viu’s partner in Malaysia is Media Prima Bhd’s television arm, Media Prima Television Networks.

According to reports, Tencent purchased iFlix's “content, technology, and resources” to grow its presence in Southeast Asia. The Chinese tech giant said iFlix's catalogue of “international, local and original content” would enable it to expand the reach of its overseas video streaming service, WeTV, which it launched in Thailand in 2019.

The price tag of the acquisition deal remains unclear, but US entertainment media outlet Variety, which first published the news yesterday, cited people with knowledge of the agreement as saying that the deal was worth “several tens of millions of dollars”.

That would make the deal significantly smaller than the US$1 billion (RM4.28 billion) valuation that iFlix sought in 2019, when it planned a public listing in Australia, according to Reuters.

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