Dubai: Everyone’s still tuning in. Or nearly everyone.
Web streaming portals are yet to see a sudden and sharp drop in viewer numbers, or in the number of minutes they consume on programming, as offices and other commercial activity in the UAE gradually head back to pre-COVID-19 levels.
And whatever dip is happening is something streaming service providers can live with, according to Maaz Sheikh, CEO of StarzPlay.
“Yes, there’s been some easing off from the peak, which was in mid-April,” he said. “But that easing off is happening only after consumption has grown 4x from the January numbers. Right now, it’s still at about 3.5x times January.
“[Even with full social and work activity resuming], we do not see a moderation that will take streaming numbers below 2.5x/2.75x times what it was in January.”
StarzPlay have the numbers to show for it – its “paid” subscribers shot up to 1.7 million in the Middle East at the end of the first quarter, from around 1 million at the end of 2019. Average daily consumption per user is at a solid 110 minutes (against 35 minutes in January), which market sources say would be the current average for the industry in the UAE/Gulf markets.
Call it the new normal for web-based video-on-demand services delivered right to the screen of your choice, and at any time you decide to watch. Just about every consumer category has been impacted by the COVID-19 and the efforts taken to slow down – and reverse – its spread.
A few handy winners
But those categories that benefitted add up to a handful. Online grocery was a clear beneficiary, so was anything digital that helped with remote working and schooling. Makers of hand sanitizers and face masks have never had it better… and it’s the same for video streaming apps.
And demand was such every competing brand benefitted. “An established brand like Netflix had no issues with brand or content awareness - it’s a powerhouse,” said Sheikh.
“The entire industry benefited from the last three months, although some players benefited disproportionately. But especially during Ramadan, consumption picked up for everyone.
“What the last three months did for us was build awareness for our brand and its content – something we had been working for the last five years to achieve. This awareness is going to endure.”
A little help from local telcos
StarzPlay’s efforts did get a boost from its alliances with local/regional telecom providers. What these did was help it get through to viewers in markets like Egypt or Morocco at a much faster pace than trying to break through on its own. More so now.
“Everyone has a mobile phone – so, since everyone subscribes with a telecom operator, they could as easily sign up with us,” said Sheikh. “As nations in the region went into full lockdown, we became the most accessible service in terms of billing. Because they didn’t need credit cards to sign up – just the monthly payments arrangements with their telecom providers were enough.”
Currently, 35-40 per cent of StarzPlay subscribers come through these tie-ups, which is much higher than the industry average. “In these months, this channel grew the most in absolute numbers for us,” said Sheikh. “But what was surprising was the percentage growth in subscribers using credit cards or Apple Pay – and that’s purely because of COVID-19.
“It meant people who were reluctant to use credit cards online started using it. Because as they became more comfortable ordering groceries online, they ended up paying for their other needs. And web video-on-demand was one.”
But there’s increased competition
The web streaming space in the UAE and Gulf is starting to look a lot more crowded than when StarzPlay launched in 2015. The Netflix onslaught continues, and with more than a little help from its growing Arabic programming content. There’s a reenergized OSN, armed with a Disney+ deal. HBO, part of WarnerMedia, lurks with some of the most eye-catching programming.
Will this mean the cost of doing business is going to go sky high? Can StarzPlay, which is principally a UAE-based startup, compete?
“I don’t think that’s an issue,” the CEO said. “Look at how the industry operates – Disney licensed its Disney+ content to OSN. But at the same time, Disney also has its content running on our platform. This will be the most likely approach going forward as well.
“Same with Warner and HBO. We do have a partnership for a selection of their shows, including the DC Comics franchise. Big US studios will keep working with local partners to monetize their content.”
Bring it forward!
If the current subscriber numbers hold up, and with a little bit of organic growth, StarzPlay is now aiming to report its first profit in the fourth quarter. That’s actually ahead of the forecasts.
If this works out, StarzPlay will not have to call in funds from new investors – “When COVID-19 peaked, we saw this tremendous growth in subscribers,” said Sheikh. “But we also saw this uncertainty in the market.
“The question was: How are we going to raise money given this climate? Our reaction was, let’s take advantage of the subscriber growth and try and be more efficient. And to stand on our own two-feet this year itself rather than later in 2021.
“Once we do that, we will not need an investor immediately. This is a market where anyone in need of money is not in a good situation.”