Tencent, the Chinese technology and entertainment giant, has acquired iflix, a loss-making streaming service based in Malaysia that operates across 13 markets in Asia.

The move, which Tencent confirmed in a statement to Variety and other media outlets, fits with the company’s strategy of expanding WeTV, its international streaming platform, across Southeast Asia and “provide users with international, local and original high-quality content in a wide range of genres and languages”.

“The purchase comprises a strong local network across emerging markets with a wide and compelling selection of video content such as TV shows, movies and local originals, to stream or download, on any internet-connected device,” Tencent said.

“Through the purchase, WeTV will further extend our presence in the video streaming industry across Southeast Asia, to reach a broader audience base within the region and to better serve our users with better viewing experience.”

WeTV, also known as Tencent Video in China, already operates in Thailand, but with Tencent’s takeover of iflix for an undisclosed sum, there is the potential to expand its footprint across the region.

These include the 25 million active users of iflix in Bangladesh, Brunei, Cambodia, Indonesia, Malaysia, the Maldives, Myanmar, Nepal, Pakistan, the Philippines, Sri Lanka, Thailand and Vietnam.

According to sources contacted by Variety, Tencent is understood to be paying “several tens of millions of dollars” for iflix. That is quite a bargain, considering that its founders at Malaysia’s Catcha Group, as well as major international media firms Sky, Liberty Global and Hearst Corporation have already invested $348m over seven funding rounds. They are likely to see only a minimal return, Variety said.

Variety also observed that WeTV (or Tencent Video) along with Alibaba’s Youku and Baidu-backed iQIYI are all under pressure in their home market of China because of the costs associated with original content and the challenge posed by the likes of TikTok and other emergent platforms.

Therefore, it makes sense to seek consolidation and overseas expansion into other Asian markets where an emphasis on Chinese and other Asian content could prove to be a more viable option than trying to catch up with Netflix and its more than 16 million paying subscribers in the region.

Sourced from Variety; additional content by WARC staff