Our top competitor is piracy, not TV, says Netflix competitor

[bsaambl]

iFlix is a video on demand service that targets users in emerging markets
Patrick Grove, iFlix co-founder and chairman, said the service's top competitor was not traditional television, but piracy

The debate over the rise of online video streaming is usually framed as a battle between new streaming platforms and traditional television services, but one serial tech entrepreneur begs to differ.

"We believe our number-one competitor is not linear TV. We believe our number-one competitor is digital and physical piracy," iFlix Co-founder and Chairman Patrick Grove told CNBC's "Managing Asia."

IFlix, based in Malaysia, is video on demand service targeting users in emerging markets. That's an attempt to carve out a niche while global giants like Netflix expand into Asia.

Grove, who is also the co-founder and CEO of Catcha Group, counts iFlix as part of his portfolio of internet businesses. It secured $133 million in funding earlier this month in an investment round led by Hearst, according to media reports.

Where traditional television stations with linear programming might refer to Nielsen ratings when determining the line-up of programs to broadcast, Grove and his team at iFlix chose a more unorthodox metric to study in their bid to pick shows users wanted to watch.

"We looked at piracy data in every market," Grove said.

"We would go to pirated DVD shops, which is a little bit risky, (and) I'd send teams to buy the top 20 pirated DVDs in every market. And then we'd go to the internet service providers (and say), 'Can we look at your streaming data.' ... And from that, we'd get a data set," Grove explained.

To illustrate, Grove said the team at iFlix studied digital and physical piracy data to draft a "hit list" of the top 1,000 shows in Saudi Arabia before the service launched in the country.

"We believe that data is far better than any other way of measuring what are the top shows that people like the watch," Grove said. The information provided iFlix with real consumer insights compared to the linear TV model of programming, which involves guesswork, he added.

Going forward, Grove said he has big ambitions for the video streaming service, which currently averages around just 5 million users.

"It might sound crazy to other people, but it doesn't sound crazy to us. Our vision for iFlix is that we want to touch 1 billion viewers ... in the next five years."