Tencent confirms iflix purchase; firm led by ex-Murdoch executives also submitted bid

TENCENT has purchased the assets of troubled streaming service iflix to boost its own WeTV streaming service, a spokesman for the Chinese Internet giant told The Business Times (BT) on Wednesday, capping weeks of market speculation about the deal.

"We confirm that Tencent has purchased iflix's content, technology and resources. This is in line with our strategy to expand our international streaming platform, WeTV, across South-east Asia and provide users with international, local and original high-quality content in a wide range of genres and languages," the spokesman said.

On Tuesday evening, BT reported that Crown Media and Entertainment, an Australian firm led by former executives from Murdoch Media and News Corp, has submitted a bid to acquire troubled streaming service iflix. Two sources had told BT that Tencent was also involved in discussions.

Through the purchase of iflix's assets, Tencent hopes to broaden its audience base in South-east Asia. "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," the Tencent spokesperson said. iflix did not respond to queries from BT.

The other bidder for iflix, Crown Media, is headed by Prabhat Sethi, the former managing director of Murdoch Media, as well as Peter Tonagh, the former chief executive of News Corp Australia.

BT understands that Crown Media is interested to turn around the regional Over-The-Top (OTT) streaming business of iflix, which is currently saddled with debt. The Australian firm is also said to have been exploring the acquisition of some assets from Singtel's failed streaming service, Hooq, to further boost iflix's business.

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Speculation of iflix's sale peaked on Tuesday when a report by lowyat.net on Tuesday said that iflix has been sold to Tencent, citing that the app store displays the publisher of the iflix app as "Renfeng Media Tech", which is also listed as the publisher of Tencent's WeTV app.

Another report later on Tuesday evening by US news outlet Variety said that Tencent Video is buying iflix for "several tens of millions of dollars", representing a steep discount to the valuation the startup had previously expected to achieve through a public listing.

BT understands from two sources that iflix, which has raised over US$360 million from investors including Fidelity, EDBI and Hearst, is currently struggling to meet its debt obligations.

One source told BT that iflix had intended to pursue an IPO on the Australian Stock Exchange earlier this year, but later shelved the plans due to weak market sentiment. In its current financial position, iflix only has about two to three weeks of runway left, the source said.

iflix's co-founder Mark Britt stepped down as chief executive of iflix late last year but remains an executive director. Meanwhile, iflix co-founder Patrick Grove resigned from the company's board in April this year, DealStreetAsia reported earlier this month.