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Starz Play Arabia Secures New Funding to Fuel Expansion Beyond Middle East

Variety logo Variety 7/11/2017 Nick Vivarelli
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ROME – Subscription streamer Starz Play Arabia, the first Starz-branded OTT service outside the U.S., is planning to expand beyond the Middle East and North Africa on the back of a second round of funding that pushes total investment in the service to $125 million since its inception two years ago.

Starz Play Arabia – which launched in April 2015, beating Netflix to the punch in the fast-growing region – announced the funding increase Tuesday.

It represents a renewed commitment from lead investors Starz and SEQ Capital Partners and the arrival of two new investors, Boston-based State Street Global Advisors and Dubai’s Delta Partners Group, a firm specializing in local telecom, media, and digital sectors.

In an interview, CEO Maaz Sheikh (pictured) said: “Certainly, part of the investment is going to be directed towards expansion beyond the Middle East and North Africa,” adding that he is looking to launch in territories in Eastern Europe, Africa, and Southeast Asia. “We have shortlisted three or four markets that we will announce in the coming months,” he noted.

Starz President and CEO Chris Albrecht said in a statement that “the success of Starz Play in the MENA region highlights the tremendous growth potential” for OTT services in the region and elsewhere. As a result, Starz and its partners “continue to evaluate future opportunities to expand the service in new territories outside the MENA region.”

The cash injection will also serve to strengthen Starz Play Arabia’s position in the Arab world, where subscriber signups have been gaining traction this past year during which the service’s customer base tripled to more than 700,000 subscribers who are “steady customers that remain on a paying basis,” said Sheikh. Over a million customers have signed up for the service since it started, with a portion dropping out after the free trial.

Dubai-based Starz Play currently operates in 19 MENA countries, including Bahrain, Saudi Arabia, Kuwait, Oman, Qatar, the United Arab Emirates, Egypt, Lebanon, and Tunisia. Its top territory is Saudi Arabia, where it has a partnership with leading telecom operator Saudi Telecom.

Tie-ups with local telecoms are a key aspect of the Starz Play distribution model, which differs from the strategy used by Netflix, its main competitor in the region.

“While Netflix is not integrated with a single [local] telecom owner for carrier billing or mobile payments, we are integrated with 16 carriers in 15 different countries,” Sheikh said, adding: “We try to compensate for their brand recognition and their momentum by working with the telecom operators.”

The two services appear to be neck and neck in the Middle East. Both are among the top 25 visited websites in the UAE and Saudi, according to website traffic analytics by Similar Web Pro.

In terms of content, Starz has increased its number of premium U.S. titles, which now comprise first-run TV shows and premium movies from most major studios. Top-performing series include “Power,” Showtime series “Billions,” the History Channel’s “Vikings,” “The Walking Dead” and “Mr. Robot.” Starz also offers roughly 1,200 hours of Arabic shows.

Localization is an increasingly element of Starz’s strategy. U.S. shows are watched in original language, with one-click Arabic subtitling available in most MENA territories but dubbed into French for North African subscribers.

Sheikh said he plans to announce a Starz Play Arabia original Arabic-language production “in the next six to nine months,” a show that “will resonate with our target audience, which are 7-to-24-year-olds, and be edgy enough that they would not be able to see it on a free-to-air channel.”

Shortly before Netflix launched into the Middle East, its chief content officer Ted Sarandos announced at the Dubai Film Festival that they were looking to produce local scripted content. But so far that has not happened.

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