The challenges surrounding mobile TV in Africa are enormous, but they are not insurmountable. Nigeria, in particular, is quite a peculiar place; a minute you think you have the answer to the dynamics of the market, the next you’re moving shop completely to test more “co-operating terrains”.
This is no different from the story of iROKO — Africa’s number one video-on-demand platform for Nollywood content — only, in this case, it decided to move back.
Before iROKOtv, Nigeria’s movie industry, popularly known as Nollywood, was unstructured, had a poor distribution network and was overrun by content pirates.
It also happened that there was a global demand for these movies, but viewership was severely limited because they were only available on physical compact disc (CD) at the time. Since no one had seriously considered taking on the internet as a reasonable channel for distribution, it was relatively easy and cheap for iROKOtv to acquire online license rights from local producers and marketers to distribute these movies.
Moving to the diaspora
Soon, the realities set in. Broadband penetration in Nigeria at the time was abysmal, the cost of internet was extremely high. On top of that, iROKOtv was running a free model that generated 26 times less revenue from ads compared to the subscription model. The only way forward was to delve fully into the subscription model and discontinue their ad-supported free service. Nigerians didn’t only just love awoof, they were completely unaccustomed to the new game iROKO was bent on playing.
While Nigeria remained their primary market, the country generated only around 3% of iROKOtv’s annual revenue. iROKOtv needed to expand its revenue, which it evidently wasn’t looking likely to get in Nigeria. Hence the need to explore other potentially more rewarding markets; including an expansion to East Africa.
The surprise turnaround in fortune
Nigeria has consistently seen less than 50% engagement in Africa. The odds were further stacked against the Nigerian market as the UK and US represent 55% of iROKO subscribers. In 2015, iROKO saw about 315 million streaming video views across its YouTube channel, 185 out of which was largely long form 2nd tier Nollywood content. According to Jason, only 6% of that came from Nigeria.”
Then earlier this year iROKO, announced multiple deals totalling $19 million, both in content development and in capital funding. The funding, which came from French media giant CANAL+, together with existing investor Kinnevik AB, is to give the leading African tech and entertainment company the platform to scale its operations and expand aggressively across the continent.
Since then, there appears to have been a remarkable turnaround in fortune for iROKOtv in Nigeria. While Nigeria is still number 3, only behind North America and Europe, about 70% of iROKO global android downloads now surprisingly come from Nigeria. iROKO founder, Jason Njoku says, “We expect Nigeria to be 1 in 2017.”
How iROKO finally got it right
Jason Njoku, once said he spent time studying the purchasing habits in Nigeria and other African countries where iROKOtv operates. “There’s a clear pattern of people preferring to pay in smaller instalments,” he professed.
Mid last year, iROKO started adjusting its products, pricing and contents around the new realities. Soon after, with heavy investments in the engineering team, an Android app update, with download-only capabilities for movies, was put up on the PlayStore. The company then completely shifted focus from the ₦500 monthly subscription to a mouth-watering unlimited access for just ₦100 per week. As a result, iROKO claims to have recorded a 100% subscription growth in Nigeria. This, Jason says “made watching our content far easier.
It’s quite unclear if this model will be sustainable for the iROKO brand, but other things being equal, iROKOtv may just run away with this one, and here’s why.
The data costs have improved immensely and a large percentage of these internet users are mobile. Mobile phone subscriptions in Africa are almost at 1 billion and by 2019, it is predicted that smartphones, with which viewers can watch content, will make up 73% of the continent’s devices. Standing at 76%, Nigeria is currently the most mobilised internet country in the world, followed by India at 65%. With this, Nigeria is the fastest growing region and is as well on course to achieve its minimum expectation of 50% subscription by 2020. Again, while Nigeria is the second largest movie producing country in the world, we can as well expect ROK studios — iROKOtv’s lesser known in-house production outfit — to add its own original content to that number.
The Nigerian market still remains challenging as ever, however, if iROKOtv is to keep up with the momentum, it must continue to plan in order to have answers to the dynamism of a market as complex as Nigeria.
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Nigerian startups raised $55.4m in Q1 2020; over 99% of which came from foreign sources. Find out more when you download the full report.