MBC targets attractive opportunities as Shahid subscribers grow 40% in 2023: Barnett

Sam Barnett, CEO of MBC Group Co. 

MBC Group CEO Sam Barnett confirmed that the number of subscribers to Shahid platform leapt 40% to nearly four million by the end of 2023 compared with a year earlier. He added that the group managed to significantly cut Shahid’s net losses.

The CEO told Argaam that the advertising-based video on demand (AVOD) offering saw the number of active users hit 15 million, an increase of 25% year-on-year (YoY). This helped drive AVOD revenue, which more than doubled from the year-ago period to SAR 112 million.

Ramadan serves as a significant peak period for Shahid, he added. “We plan to convert Ramadan subscribers and active users to long-term loyal subscribers by continuing to invest in compelling and diverse content offerings that cater to varied interests.”

He stated that the company will continue to target opportunities in ad, TV, radio, gaming, and events to take the media and entertainment landscape to  new heights.

Here’s the full interview with Barnett:

Q: You reported the first financial results following your recent IPO. Can you provide an overview of your financial performance for the past year, highlighting key milestones and achievements since going public?

A: As we present our inaugural financial results post-IPO, it's crucial to highlight several key indicators that reflect our resilient performance over the past year. Total revenues in 2023 reached SAR 3.7 billion, a 6.2% YoY increase, driven by solid growth across all the group's income-generating business segments, notably Shahid.

The group's gross profit increased by 43.7% YoY to SAR 921 million. Net income for the 12-month period was SAR 69 million, a 45% YoY increase, which surpassed our expectations. One of the key reasons for the substantial rise in net income was the outstanding performance of Shahid, which saw a strong increase in subscribers in 2023 to almost 4 million. We also managed to significantly reduce Shahid’s net losses, which further enhanced our bottom line. The net income margin for 2023 was 2%, which is in line with the group's guidance for the year.

Our robust performance in 2023 reinforces our leadership position in the media and entertainment industry in the MENA region. Through the execution of our strategy across all our segments, including broadcasting and other commercial activities, Shahid and media & entertainment initiatives, we were able to capture growth opportunities and enhance our resilience, enabling us to navigate more challenging periods. We are excited for what lies ahead and believe that MBC Group is ready for continued growth and innovation. We remain committed to delivering exceptional content and experiences to our audiences and subscribers while maximizing value for our advertisers and shareholders.

Q: Could you elaborate on any standout successes, initiatives or growth areas within your various business segments such as broadcasting, media & entertainment initiatives or markets? How do you plan to sustain this momentum moving forward?

A: Within our diverse business segments and markets, we have witnessed several standout successes, propelling our company forward. As mentioned, one notable achievement is the remarkable growth of our Shahid platform, which saw a significant increase in subscribers. The popular video streaming platform witnessed a 40% increase in paid subscribers YoY to just under 4 million by the end of 2023. For AVOD, the number of active users reached 15 million, a 25% YoY increase. This helped drive AVOD revenue, which more than doubled from the year ago period to SAR 112 million. Our focus on offering compelling content, developing a new content release strategy, strategic partnerships, and enhancing the user experience have been instrumental in driving Shahid’s growth.

To build on Shahid’s outstanding performance, we plan to continue investing in our production of high-quality Arabic content, which gives us a competitive edge over other global streaming platforms. We are also looking to further grow our subscriber and viewer base outside of our core markets, in countries with an Arabic-speaking population. Furthermore, in 2023, our focused marketing campaigns and strategic business partnerships proved to be instrumental in new customer and view acquisition. We intend to continue focusing our efforts on those fronts in 2024.

Beyond Shahid, as we move through 2024, we will continue to target opportunities in advertising, TV, radio, gaming, and events to take the media and entertainment landscape to  new heights. Underpinning those opportunities will be the continued investment in our people and technology to drive growth through ground-breaking innovations.

Q: With Ramadan representing an annual peak for Shahid, especially as a driver for new content generation, could you outline the strategies to sustain momentum after reaching 4 million subscribers? And how that could potentially be reflected into profitability?

A: Ramadan indeed serves as a significant peak period for Shahid, with prior years proving that our highest number of subscribers and active users was during the Ramadan period, thanks to our strong line-up of top-quality content. We plan on converting those Ramadan subscribers and active users to long-term loyal subscribers by continuing to invest in compelling and diverse content offerings that cater to varied interests. This includes leveraging data analytics to understand audience preferences and trends, allowing for targeted content development that resonates with viewers.

Q: What were the key drivers behind the advertising growth within both broadcasting & other commercial activities and Shahid business segments, and how do you plan to sustain or enhance these drivers in the coming years?

A: In 2023, MBC Media Solutions (MMS) experienced significant revenue growth driven by a diverse client portfolio and the expansion of Shahid’s AVOD platform. Our strategy to deepen relationships with clients and offer tailored solutions contributed to this success. We also leveraged audio content such as podcasts and sports programming, both playing pivotal roles in driving revenue growth.

What sets MMS apart from competitors is our extensive relationships with top local and international agencies, enabling us to leverage existing leadership positions and maximize revenues through programmatic ad sales. Looking ahead to 2024 and beyond, our strategic growth plans for MMS include a pivotal focus on digital streaming services, recognizing the growing consumer appetite for on-demand content. We also aim to re-establish TV as a foundational element and diversify our content and advertising strategies to include niche markets and audio platforms, broadening our reach.

Additionally, initiatives such as “Shahid Always On” showcase our commitment to staying ahead in the digital transformation wave. Also, building a digital monetization ecosystem will enhance our digital revenue streams through innovative technology and platforms.

Q: How are regional or global economic trends impacting the performance of your three business segments: broadcasting & other commercial activities, Shahid and media & entertainment? And what measures are in place to mitigate any adverse effects?

A: Regional and global economic trends play a significant role in shaping any business. Fluctuations in economic conditions, as well as other factors, can directly impact consumer behavior and spending patterns, market demand, and overall business operations. We prioritize stability by diversifying our market presence across regions and countries and maintaining operational flexibility. By expanding our geographic footprint, the group can mitigate risks associated with economic downturns in any single market.