Starz Play, the leading subscription video on demand (SVOD) service in MENA, is set to become profitable in the region by Q1, 2020, according to co-founder and CEO Maaz Sheikh.
The service boasts the largest market share in the region at 29 percent in terms of subscriptions for the second consecutive year, as well as in terms of revenue at 32 percent, according to the IHS Markit Pay TV & Online Video Report, MENA, 2019.
Sheikh said in 2018 that the platform could be profitable in 2019, but speaking to Arabian Business today, he said the plans have been delayed due to the streaming company’s rapid expansion.
Speaking to Arabian Business, he said, “The challenge for a young company like ours is that there’s no clear [path] of value creation for shareholders or investors. So you can create value by becoming profitable and generating cash, or you can be profitable by continuing to grow very rapidly and create value and increase intrinsic value of the company by expanding and taking a bigger market share. What we as a company, and our shareholders, have chosen to do is the latter, which is to continue to expand and grow”.
Starz Play, which expanded to Iraq and is launching in Africa later this year, is close to profitability in its core MENA markets, Sheikh added. However, profitability in newer markets such as Africa will take between 3-4 years to be achieved.
“Later this year, we’re expanding into Africa. We’re getting closer to those plans, they’re still in place. [We’re] looking to expand in Africa in seven markets. We’re all set for that later this year… Our timeline for being profitable in MENA is Q1 2020 so by next year Q1, we will be profitable in MENA. Africa will be another 3-4 years out…
“Profitability for us is achievable in our core markets of Middle East and North Africa. We expanded in Pakistan, which required additional investment, and later this year, we’re expanding into Africa. Both of these expansions require an additional investment and delays to our profitability, but as far as being profitable in our core MENA operations, we are very close to that.
“At our core MENA operations, we are paying our own bills, our own marketing, salaries, rent and everything so that part of the business is very near profitably, but as we expand further out, that requires more investment,” Sheikh said.
Starz Play currently has 1.2 million users, with Sheikh crediting user growth to the platform’s diverse offering of flexible payment options in MENA, where bank card penetration remains low. Payment options on the platform include payment through local mobile plans and free trials without commitments or restrictions.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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