Major American investors are banking on the Dubai start-up Starz Play as the on-demand video streamer grabs US$125 million to expand services beyond Mena into two more continents while adding original content.
Starz Play had new investment commitments come in this year from the motion-picture heavyweight Lionsgate and the asset manager State Street Global Advisors (SSGA), bringing the total amount of investments the company has received over two years to $125 million – a sign of confidence for the direction of home entertainment in the Mena region.
“As Starz Play closes in on the milestone paying viewer figure of three-quarters of a million regional viewers, our strategic investment continues to reap dividends,” said Anandh Hari, the managing director of private equity at SSGA. “We look forward to prolonged growth across the Mena region.”
The research firm MarketsandMarkets forecasts the video-on-demand market will more than double to US$61.4 billion by 2019 from $25.30bn in 2014. And the Dubai start-up is proof of the rise in the market, growing more than 12-fold over the past year. Starz Play has gained more than 700,000 paid subscribers – or nearly 1,000 subscriptions a day – since the company's inception in 2015.
“This investment gets us fully funded for our Mena business plan and sets us up for further expansion beyond the region,” said the Starz Play chief executive, Maaz Sheikh.
The company is looking to expand to hit its goal of 2 million subscribers by the end of 2020 by tapping south Asia, Africa and central and eastern Europe. Mr Sheikh did not give specifics as to the locations, but said that the next six months would be tell-tale as discussions were still being finalised.
The all-inclusive, unlimited service costing Dh30 per month has gained major traction in the UAE, ranking 23rd of all global websites visited just behind Netflix at 21. While Starz Play is looking to grab more western content, it also has plans to follow a similar business model to Netflix by providing original content next year. "We have plans for producing original Arabic content that will be added to our service next year, but on the western front we have a series we recently acquired that is exclusive to us from Sky and Amazon Prime," he said referring to the British historical drama Britannia.
Coupled with available content, Mr Sheikh feels the simple payment services has helped the business to grow. "It boils down to content provided and the ease of payment," he said. "You can subscribe to our service through Etisalat's eLife or mobile phones – something that you just can't do with Netflix," he said.
