Starz Play crosses one million subs, announces expansion strategy

CEO Sheikh said that he expects the MENA OTT SVOD market over the next few years to be a three horse race with Netflix and MBC Group's Shahid as the chief competitors.
Starz Play leadership team
Starz Play leadership team

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At a media briefing in Dubai, Starz Play, the UAE based subscription video on demand (SVOD) service showcased its impressive growth story this week as it celebrated reaching one million subscribers in January 2019. 

Since inception in 2014, the business has secured US$125 million in three rounds of funding, with major investors including STARZ/Lionsgate (40%), SSGA – formerly GE Asset Management (40%) and SEQ Investors, and Delta Partners and Founders/Management (20%).

Apart from the Lionsgate/Starz original programming Starz Play has expanded its content library to 10,000 plus hours of content through tie-ups with the major global studios including MGM, 20th Century Fox, Disney, Warner Bros, Universal and Fox International Channels. Starz Play said despite major studios planning to roll out OTT streaming services of their own, they don't think their content acquisition pipeline will be affected as the OTT services will not enter the MENA region for some years.

Maaz Sheikh, CEO and Co-Founder at Starz Play, said: “It’s an exciting time for Starz Play - particularly our reaching one million subscribers this year. We look forward to continuing to build on our success as we progress with our expansion plans across MENA into 2019 and beyond. In an increasingly competitive space, we have managed to differentiate our offering to the benefit of the customer, through working closely with partner telecom providers to offer subscribers a payment method that does not rely only on online subscription, as well as by investing in world-class content that people want to watch and watch again."

Initially focused on Hollywood movies, Starz Play's subscriber adoption is mainly driven by same date release of popular US shows such as Vikings, Billions and Power said Sheikh, as well as evergreen comedy shows like Friends and Greys Anatomy. High profile Arabic dramas and Bollywood content remain popular he added, saying that Saudi Arabia is currently the highest growth market. 

“In 2019, we will continue to focus on the customer and will seek to increase market share as well our subscriber base, with additional investments enabling further geographical expansion. In terms of the market, conditions are looking favourable for our sector, helping STARZ PLAY go from strength to strength, with SVOD revenues in the MENA region predicted to reach US$2.1 billion by 2024.”

The 2018 IHS Markit study put Starz Play as the leading SVOD player in the MENA region with nearly a quarter of the market share. CEO Sheikh said that he expects the MENA OTT SVOD market to be a three horse race in the coming years with Netflix and MBC Group's Shahid as the main contenders.

The streaming service will continue to focus on growth and expansion in select emerging markets and is not expected to hit profitability in the next 1-2 years. Pricing for the SVOD service differs across the region at $11 per month in the GCC while other countries in North Africa and Pakistan are at $3-4 per month.

The 5-year-old startup said they are currently fully funded to pursue their growth plans across the MENA region, but expects to go in for more funding at the end of 2019 or early 2020, as they expand into new markets. 

Starz Play COO Danny Bates added that they are maintaining a healthy ratio of lifetime customer value to customer acquisition costs, and thanks to a deeper understanding of consumption habits, the SVOD service has managed to cut down its churn rate by a quarter since inception.

Starz Play has pursued a distribution strategy of partnering with regional telcos for payment methods and bundling the service with device manufacturers to drive subscriber growth in a region with low credit card penetration.

Key milestones for Starz Play in 2018 included: a five-year deal signing with Etisalat; the signing of a strategic partnership with eXtra; a three-year deal signing with STC/Intigral; the launch of Starz Play Pakistan in September; the signing of a partnership with Samsung in October, and, securing a partnership agreement with Mobily in November.

Now available in 20 countries across the Middle East, North Africa and Pakistan STARZ PLAY has secured its place as the number one player in the MENA region in terms of online video subscriptions and online video revenues – with a market share of 24% and 31.53% respectively.

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