StarzPlay, Fremantle Ink Distribution Deal

StarzPlay, the Lionsgate-owned subscription streaming service operating outside the United States, has signed a distribution deal with Fremantle, a British television content and production/distribution subsidiary of Bertelsmann’s RTL Group.

The pact includes Fremantle’s crime series “Baghdad Central,” based on the novel by Elliott Colla; and “The Luminaries,” a drama series starring Eva Green and Eve Hewson, and based on the novel by Eleanor Catton.

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The deal also includes psychological thriller “Dublin Murders,” adapted from Tana French’s first two novels in the crime series.

Starz Play Arabia launched in 2015 in 17 countries. It now operates as Star Play with more than 8 million subscribers.

“Since we first launched, we have always retained a focus on the provision of in-demand, watchable content for our subscribers and this latest partnership is testament to that commitment,” CEO Maaz Sheikh said in a statement.

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Anahita Kheder, SVP for the Middle East, Africa and South Eastern Europe, International, at Fremantle, said StarzPlay has become one of top platforms in the MENA region for showcasing in-demand programming.

“We are very much aligned with Starz Play’s goals, making them the perfect home for these high-end titles,” Kheder said. “Their audiences will soon be able to enjoy the compelling characters and powerful storylines that these series offer.”

Lionsgate Doubles Down on ‘Starz Play’; Expanding SVOD to More Than 51 Countries

Lionsgate has high hopes for Starz Play, the subscription streaming video service complimenting the branded pay-TV platform the studio acquired for $4.4 billion in 2016.

Instead of possibly selling the platform — reportedly to CBS — Lionsgate is eyeing Starz Play in the same way Disney projects its future around pending SVOD service Disney+.

The Santa Monica, Calif.-based studio/distributor will expand Starz Play International from the current 42 countries to 51 countries by July 1, CEO Jon Feltheimer said on the May 23 fiscal call.

“We believe the international market is a $45 billion opportunity for us, resulting between 24 million and 25 million new Starz International subscribers by 2025,” Feltheimer said, “making Starz Play one of the three leading pureplay subscription video-on-demand services in the world.”

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Launched in 2016, the streaming service has about 4 million domestic subscribers, excluding 3 million international (including 1 million for Starz Play Arabia), which Lionsgate co-owns.

Combined with pay-TV, Starz added 1.2 million total subs to end fiscal 2019 with 24.7 million subs – largely through Amazon Channels, Roku, Apple TV, Hulu, Virgin Media in the U.K., Orange and Vodafone in Spain, and Bell Media in Canada.

Lionsgate plans to stream its original theatrical slate during the “pay-1 window,” in addition the entire movie catalog on Starz Play. The service will also include original TV shows such as “Power,” “Spanish Princess,” ‘American Gods,” and “Vita,” among others.

Feltheimer said the streaming platform is ideal for third-party content holders, including local programming in foreign countries.

“We view this as an investment into our future,” he said. “We’re off to a great start.”

Whether Wall Street concurs will take time. CFO Jimmy Barge said there exists a “substantial valuation disconnect” between company’s “enthusiasm” for the international streaming business and the current “investor perception.”

Indeed, the CFO contends Lionsgate has more than $500 million of “negative value” weighing on the company’s market value due to streaming.

To offset the disconnect with investors, Barge said Lionsgate would begin providing more clarity on financial statements and subscriber growth data regarding Starz and Starz Play within the company’s media networks business segment.

Within five years, Lionsgate expects Starz Play to generate from 15 million to 25 million subscribers within the 51 foreign countries. He said international losses from Starz Play International would peak around $125 million to $150 million in fiscal 2020.

Starz Play is projected to achieve fiscal profitability by fiscal 2023.

Starz Streaming Service to Launch on Virgin Media in the U.K.

Lionsgate subsidiary Starz Nov. 8 announced that its over-the-top video app, Starz Play will launch on Virgin Media in the U.K. on Nov. 29. The streaming service will give Virgin pay-TV subscribers access original Starz series, Lionsgate movies and third-party content.

The launch coincides on the same day season two debut of “Counterpart,” starring Academy Award-winner J.K. Simmons (Whiplash). Other content includes series such as “Vida,” “Sweetbitter,” “The White Princess” and “Mr. Mercedes,” as well as a movie library featuring The Hunger Games, among other titles.

“The launch of Starz Play on Virgin TV will give our customers access to even more box-sets, movies and TV series such as ‘The White Princess’ and ‘Mr. Mercedes,’” David Bouchier, chief digital entertainment officer at Virgin Media, said in a statement.

Starz Play is now available in the U.K. and Germany via Amazon Prime Video Channels, as well as in Canada under the Starz brand with upcoming launches in France, Italy and Spain.



Middle East OTT Video Market Expands as Saudi Arabia Ends Theatrical Ban

The over-the-top video market in the Middle East and North Africa (MENA) topped 1.4 million subscribers in 2017, up 48% from 2016, according to new data from IHS Markit. Online video revenue grew 44%, exceeding $100 million for the first time. Subscriptions are forecast to grow at a compound annual growth rate of 34.4%, reaching 5 million in 2022.

At the same time, pay-TV subs fell 21% to 4.2 million — driven by the politically-driven embargo of beIN Media pay-TV service in Saudi Arabia, Egypt and Bahrain.

“There was a reversal in pay-TV growth in the MENA region at the end of 2017,” according to analysis provided by Constantinos Papavassilopoulos, principal research analyst at IHS Markit. “As Saudi Arabia, Egypt and Bahrain severed political ties with Qatar, the three nations subsequently also blocked beIN Media Group from their markets. A similar decision was taken in the United Arab Emirates, but the market was later reopened to beIN Media pay TV packages. While the precise amount of revenue damage to beIN Media from this blockade is unclear, IHS Markit estimates that it may have cost the company as much as $200 million in lost subscriptions last year, especially because Saudi Arabia and Egypt were the two largest markets for beIN Media satellite TV packages. If the beIN Media blockade continues, it could seriously affect the future growth prospects of pay-TV in the region.”

Even as pay TV subscriptions declined, there were other positive developments for entertainment markets in the MENA region. Saudi Arabia re-opened movie theaters in the country and is planning $64 billion investment of state and private funds in the country’s entertainment sector over the next 10 years.

Online video subscriptions in MENA exceeded 1 million in 2017 for the first time (1.38 million), up 48% over the previous year, according to IHS Markit. OTT video revenue is expected to reach $500 million in 2022, growing 36.6% annually. In 2017, the number of OTT subs were one-third of the number of pay-TV subscriptions. This share will increase to 50% in 2020 and 67% in 2022, Papavassilopoulos said.

Lionsgate-owned Starz Play remains the OTT video market leader, in both subscriptions and revenue, followed by local service Shahid Plus and Netflix.

Starz Play’s success is based in part on partnering with local telecoms and IPTV networks offering easier payment options to consumers. This policy aligned pricing in relation to the average disposable income in each country, while providing attractive content with high relevance to some MENA regions, according to Papavassilopoulos.

“The pattern of growth will be determined by the decisions of the main players — primarily by their strategies for content, localization, partnerships and pricing,” Papavassilopoulos wrote in the report.