Armed with the ability to tap into Etisalat's network, Starz Play Arabia is set to propel its streaming service into new territory
It began as one man leaving his C-suite seat at the biggest cable company in the Middle East to go it alone.
A little over three years later, Starz Play Arabia has amassed $125m in funding, over 700,000 subscribers in 16 countries, and is among the top 15 visited websites in both the UAE and Saudi Arabia, according to web traffic ranker Alexa.
Unlike his competitors at Netflix, Starz Play CEO Maaz Sheikh says he isn’t ready to take a risk producing original content yet.
Instead, by signing a long-term deal with telecom giant Etisalat, he intends to replicate what has worked with telecom operator STC in Saudi Arabia: to localise foreign-language content and accelerate growth beyond the Gulf.
He tells Arabian Business how the partnership will fuel expansion across the region.
Tell us about the agreement signed with Etisalat and its E-vision arm and the advantage it brings to Starz Play Arabia?
The five-year partnership we’ve signed has various strategic advantages, including distribution of our catalogue of content across the group’s network, content sharing, and the ability for both of us to collaborate on technology and the platform.
We’ve been working with Etisalat on a number of initiatives for two years now, which is why you can pay for Starz Play Arabia through Etisalat’s mobile payments. Now not only is it available on their e-life set top boxes offered with broadband connection, but Etisalat will also actively promote it with their bundles.
With Etisalat in almost every home, this gives us a lot in terms of distribution. You can watch their free-to-air channels and then move to on-demand streaming content quite seamlessly. This greatly reduces our acquisition and marketing costs. So we can focus on developing the platform further.
Etisalat has a number of companies in other countries, like Maroc Telecom in Morocco and PTCL in Pakistan, which also has a separate mobile arm. As part of the agreement, we can license our platform and technology if needed, and it doesn’t need to be branded as Starz Play. So we can franchise out our technology as a product or service. We’ve already launched with Maroc Telecom under a different brand name six months ago. Pakistan is an even bigger market, and we’re getting ready to launch there next month.
How does this benefit Etisalat?
We give them access to a lot of content that they don’t have to license through individual studios. They wanted to deliver a service on top of their core network provision function to increase what they offer so they can retain and attract more customers. That service has now been contracted to us so they don’t have to build something that already exists.
How else can you tap into Etisalat’s strengths to improve Starz Play?
One of the major aspects of this partnership is that we’re going to collaborate on content. The buying power of Etisalat and E-vision is huge, and will help us acquire more Arabic content from them.
We already have some Arabic content, but the market potential for it is a lot bigger than what we have been able to offer. There are many more players in that space who are more established, which made it more challenging for us to increase our foothold and figure out which niche to target. Working with Etisalat and E-vision will help us gain those economies of scale.
How important is tapping into the Arabic content market for you?
Approximately 70 percent of our consumers are Arabic speaking, but the majority of the content they consume is English language. So people hadn’t yet been subscribing for our service if they were looking for Arabic content.
We don’t have shows like Vikings or Brittania in the Arabic language. The free-to-air broadcasters have more of that content and they provide it for free because they can run ads during the breaks. That’s their business model. What we’ve had to figure out where we can operate in between that and what can work on our service.
What kind of content is gaining traction, and where else can you expand?
We’re still figuring that out and I can’t say we have all the answers yet. But one thing that we have found success with is in providing Arabic subtitles on Bollywood movies, and that’s going really well, and the partnership with Etisalat is going to help us build on this success.
Make no mistake, in terms of overall consumption, Arabic content is the most consumed content in this part of the world, which might be a surprise to many. But that consumption demand is being met by free-to-air broadcasters. Hollywood content is where affordability needed to be addressed and we’ve succeeded in doing that and making it more accessible.
We now have hundreds of thousands of Arabic-speaking users and are gaining ground in Arabic content. We can see which genres work with our audience and we can then fine tune and invest in that. Our collection of Bollywood movies and Pakistani TV serials is far more extensive than what our competitors offer, and we’re seeing that it is one of our best viewed segments, so we can tailor a lot more of that to Arabic-speaking audiences.
Netflix is creating its own shows, and a number of production houses here are producing localised versions of English language content. Are you looking at it?
I think that is the logical path the business will take, but it’s not something we’re looking to do in our immediate future. That’s a riskier proposition and there are easier wins to be had. It’s taken us three years to deliver a platform, with our fair share of mistakes and tweaks and adjustments, to learn how to get this to where it is.
Original content is certainly a natural evolution but it has to come at the right time, and there’s lower hanging fruit that we can tap into. So translating existing content to provide subtitles, and offering even more relevant content that the others aren’t able to.
How do you make it relevant?
Well, take our catalogue, for instance. A show like The Flash is a great, family-friendly show that I can watch with the family and not worry about language, nudity and the like, and it is a growing niche for us. Grey’s Anatomy is a big franchise show that we don’t have to advertise. Shows like these have a broader appeal than, say, The Crown or 13 Reasons Why.
But what’s to stop viewers subscribing to Netflix if it decided to add these shows to what it offers here?
The more original content Netflix invests in, the more the Grey’s Anatomy, Walking Dead, and Friends of this world want to work with us. Success begets success, and the more successful these shows are on our platform, the more others want to work with us, which translates into subscriber satisfaction because of the catalogue we can deliver.
It’s a virtuous cycle that, dollar-for-dollar, works for us, so why take risks in an area we have yet to figure out. We’re still unravelling our potential and working out the puzzle that is content. But I’m not prepared to take these guys head-on with their hundreds of millions of dollars to produce content.
New YouGov poll confirms TV consumption is on the rise
The rise of online streaming services has revolutionised the media industry. Netflix, a pioneer of the streaming industry, is approaching 110 million subscribers. Spotify is now worth more than the entire US music industry, with an estimated value of $8.4bn. A recent YouGov poll shows how this region is not immune to the changes.
In the past 12 months, 29 percent of consumers in Saudi Arabia and the UAE say they have increased the frequency of listening to music using online streaming services. This trend is strongest in the UAE, where the figure rises to 35 percent. By contrast, just 24 percent of UAE consumers said they no longer listen to music using online streaming as much as they used to. The net increase (+11) shows the strong growth of online music streaming services in the Emirates in the past year alone. Overall, a third (34 percent) of online consumers across both countries have subscribed to a music streaming service at some point.
As streaming rises, other media have suffered. A third of consumers in Saudi and 28 percent in the UAE claim to listen to the radio less than they did 12 months ago. CDs have seen the biggest plunge; 35 percent of consumers in both countries said they played CDs less in the past year.
Three in ten consumers say they stream video content more than they did a year ago, and they are using subscription services to watch it. As many as three in ten (29 percent) across both countries say they watch video content on platforms that do not require payment and/or a subscription. Broadcast TV remains popular, though, with nearly a third of consumers actually watching more live TV than they did 12 months ago.
Data collected online by YouGov Omnibus among 1,002 respondents in Saudi Arabia and 1,114 respondents in the UAE between December 14 and 21, 2017.