Netflix's Middle East rival Starzplay expects 40% revenue rise in 2022 on anime and sports

Exclusive: Video streaming platform aims to reach profitability in the second quarter of 2024, chief executive says

Maaz Sheikh, chief executive and co-founder of Starzplay. The company has 2.1 million subscribers across 19 countries. Photo: Starzplay

Starzplay Arabia, the Middle East's fastest-growing video streaming service, expects annual revenue for 2022 to jump 40 per cent on the previous year, driven by popular content across its anime and sports genres.

Within its core product of movies and TV series, the platform is recording a growing interest in its Paramount+ originals, while Turkish shows are “performing really well”, Maaz Sheikh, co-founder and chief executive of Starzplay, told The National on Wednesday.

But the “surprise area” is anime, which has become one of the top performers, he said.

“We’re expecting a big subscriber growth in the coming weeks,” Mr Sheikh said after launching Starzplay Sports, a new live sports events platform, earlier this month. “We'll be closing strong for the year.”

The platform's revenue in the first six months of the year rose 40 per cent year-on-year as the number of subscribers increased by 20 per cent to 2.1 million during the period, he said.

Netflix, the MBC Group's Shahid VIP and UAE-based Starzplay control two thirds of the Middle East and North Africa's over-the-top services market in terms of subscriptions, a May report by tech research firm Omdia said.

Shahid VIP and Netflix have a market share of about 22 per cent each, while Starzplay controls a 20 per cent share of the market, the report showed.

Starzplay aims to reach profitability by the second quarter of 2024, Mr Sheikh said.

The company currently has no requirement to raise finance to drive its growth.

“We’re fully capitalised to grow the business and eventually stand on our own two feet. There are no plans to raise more funds; the focus now is on execution,” the Starzplay chief executive said.

The company has added two new revenue streams over the past few months. First, it has enabled advertisements and sponsorship on its sports channels. Secondly, it has licensed its apps and back-end technology to other players in Malaysia, Indonesia, Philippines and Sri Lanka.

“The end product they get is a SVOD [subscription video on demand] service like ours, using our apps and back-end tech, but privately labelled with their look,” he said.

“We monetise our IT and they don't have to reinvent the wheel.”

Together, these two streams will contribute about 30 per cent to the company's total revenue by 2023, Mr Sheikh said.

Starzplay — which has strategic partnerships with telecoms providers e& group, STC and Ooredoo — also expects to strike deals with e-commerce players to help drive additional growth, Mr Sheikh said.

The platform has already signed a partnership with online fashion retailer Namshi, allowing the e-commerce company to offer its VIP customers a Starzplay subscription as a value-added service.

Asked whether the broader macroeconomic conditions of higher inflation and recessionary fears are tightening subscribers' purse strings, the chief executive said the entertainment service is an “affordable luxury” at Dh40 ($11) a month.

“We see this as a very reasonable price to stay home, enjoy and save money by not spending outside,” he said.

“From that point of view, I don’t want to say that we're recessionproof, but it won't impact us that much.”

The option to go public in the next two or three years is still on the cards, although the exact timing will be determined by the company's shareholders, and the focus in the next year or two remains carrying out growth plans and creating value, he said.

E-Vision, the UAE’s biggest telecoms operator e&’s entertainment arm, and Abu Dhabi holding company ADQ signed a deal in March to acquire a 57 per cent stake in Starzplay. The deal values the platform at $420 million.

The deal will inject a cash investment into the business for new content acquisition and producing more original content from the region, Mr Sheikh said.

“It’s a transformative event for the company and almost like a dream come true for employees and management,” he said.

Starzplay is using the investment to add new content such as Italy's Serie A, getting football rights for the AFC (Asian Football Confederation) games, adding UFC to the platform and showing Asia Cup cricket matches live.

It will also focus on original shows from the Middle East, with plans to enter into a partnership with Abu Dhabi's ImageNation to create a reality show about the UAE's real estate sector, Mr Sheikh said.

More details on the format and the sponsors will be announced next month, he added.