How does iflix compete with Netflix? Apparently, it doesn’t

iflix CEO: We're focused on emerging markets
iflix CEO: We're focused on emerging markets
Netflix CEO: We're investing heavily on international
Netflix CEO: We're investing heavily on international
Is Netflix worried about big rivals?
Is Netflix worried about big rivals?

At first glance, iflix might appear to have a lot in common with Netflix, but CEO Mark Britt is adamant that the two streaming companies are not competitors, at least not with content.

"Netflix has just become the first global television network, they're the biggest creator of original programming in the world," said Mark Britt, chief executive officer and co-founder of iflix Group.

"iflix is at the other end of the spectrum, so we don't think about big global domination, we think about emerging markets," Britt told CNBC at the Asia Pacific Pay-TV Operators Summit 2016 in Bali, Indonesia.

The Malaysia-based internet video streaming company intends to tap into the immense potential of the "2.5 billion people who have smartphones" in emerging markets, Britt said.

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It is expected to face a stern test, however. As Netflix makes its push into international markets, the company is also focusing on developing countries by penetrating markets with lower monthly fees compared to its fees in the U.S.

Britt shared that part of iflix's strategy is to take on pirated content, which is the cheap option for consumers in emerging markets who want to view content but cannot afford to pay the average video streaming service fees.

"There was $6.2 billion in consumer spending on pirated DVDs last year, excluding China," said Britt. "That's where iflix is focused."

Netflix staff work at Netflix headquarters in Los Gatos, California.
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Founded in 2014, iflix raised a successful round of funding in March led by European media giant Sky with Indonesian company Emtek Group also participating through its subsidiary Surya Citra Media.

iflix's latest partnership is with Indonesian state-owned Telkom, under which the company is offering the iflix service to its internet service subscribers ahead of the internet TV provider's launch in the country.

Telkom, which is Indonesia's biggest telecommunications provider, had blocked Netflix earlier in January based on claims that Netflix did not meet existing regulations, The Wall Street Journal reported.

"In Indonesia, it's not the government, it's just one ISP that's blocking us, they're a little bit conservative," said Reed Hastings, Netflix CEO to CNBC on Wednesday.

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