Starzplay CEO says IPO plan 'up to three years away' despite subscriber surge

Maaz Sheikh says recent subscriber success at Dubai-based online streaming platform will not accelerate plans to go public

The CEO of Dubai-based online streaming platform Starzplay, Maaz Sheikh, has revealed plans to take the company public are still up to three years away.

Sheikh told Arabian Business that the business, which was only founded in 2015, has reported over 600,000 new subscribers since the start of the year, largely fuelled by lockdown measures introduced in March and April this year.

However, he admitted this will not accelerate plans for an IPO.

He said: “IPO is definitely our ambitious goal, but we’re also perhaps two-to-three years away from it. We need to double our business in the next two years to be able to be ready for an IPO.
“For us, we are focused on 2021 right now and growing our business. We’re looking at a growth rate of about 50 percent from 2020 to 2021.”

Sheikh revealed that, at the end of December last year, Starzplay was averaging around 2.5 to 3 million minutes-a-day of content viewed in Saudi Arabia, with similar numbers in the UAE. “We were growing about 10 percent month on month. That’s what we were projecting for the rest of the year.”

The onset of the global Covid-19 pandemic in March, along with the associated curfews and lockdown measures to contain its spread, saw that average grow to 6.5 million by the middle of April.

“We peaked in mid-April with almost three times what we were doing in December and since then it’s come off its highs to the point where we are still probably about double what we were doing in December 2019,” said Sheikh.

“We grew more during that four to six-month period than we were anticipating for the next two-and-a-half years,” he added.

However, he conceded the highs experienced in the first half of the year have since come back to show some semblance of normality.

“We are beginning to see higher than anticipated churn, but at the same time we saw higher than budgeted subscribers at the start of the year,” he said. But in terms of the 1.2 million subscribers at the start of the year, compared to 1.8m at present, he added: “This puts us slightly above our forecast. Where we really benefited is due to that organic demand of the service, we were able to cut back on our marketing expenditures and rely on organic demand. It’s more efficient as a company.”

According to industry reports, video streaming will make up 80 percent of internet traffic by the year 2022. There is certainly plenty of choice for consumers in the region, with the likes of Starzplay, OSN, Netflix and Amazon Prime among the big-hitters vying for subscribers.

Starzplay has deals signed with Disney, Universal and Warner, among other industry giants, offering hit TV programmes such as The Office, The Big Bang Theory and Friends, as well as Vikings, Billions and exclusive Arabic show Baghdad Central.

Currently the platform, which is eyeing growth opportunities in the UAE, Saudi Arabia and Morocco, devotes 20 percent of its content to Arabic, 20 percent to French and the rest for English-speaking content.

“The mix is likely to grow to maybe about 30 percent Arabic content,” said Sheikh. “The key for a paid premium service like us is not necessarily the volume only; definitely we need enough critical volume, but it’s more about having that premium, high quality serialised dramas that end with a cliffhanger each time and then people tune in to watch, either on a weekly basis or we make the whole box-set available.

“It’s giving that cinematic experience to the consumer is what these TV shows are all about.”

Despite its relatively tender years, Starzplay is already proving to be a big player and recently signed an exclusive deal with Apple TV. “It’s certainly a big milestone for us, to be associated with the world’s biggest company in our space and in our region it’s quite an endorsement by Apple to pick us as their premium content,” said Sheikh.