How iROKOtv finally got it right

By Ifeanyi Ndiomewese

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 are moving shop completely to test more “co-operating terrains”.

This is no different from the story of iROKOtv – 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. In addition, 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 iROKOtv was bent on playing.

While Nigeria remained their primary market, the country generated only around 3 percent 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.

Nigeria has consistently seen less than 50 percent engagement in Africa. The odds were further stacked against the Nigerian market as the U.K. and U.S. represent 55 percent of iROKOtv subscribers. In 2015, iROKOtv 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 iROKO Parters CEO founder Jason Njoku, only 6 percent of that viewership traffic came from Nigeria.

Earlier this year iROKO Partners, announced multiple deals totaling US$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 leverage to scale its operations and expand aggressively across the continent.

Turnaround in Fortunes

Since then, there appears to have been a remarkable turnaround in fortunes for iROKOtv in Nigeria. While Nigeria is still number 3, only behind North America and Europe, about 70 percent of iROKOtv’s global android downloads now surprisingly come from Nigeria. Njoku says, “We expect Nigeria to be 1 in 2017.”

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 installments,” he professed.

Mid last year, iROKOtv 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 Google PlayStore. The company then completely shifted focus from the ₦500 (US$1.58) monthly subscription to a mouth-watering unlimited access for just ₦100 (US$0.32) per week. As a result, iROKOtv claims to have recorded a 100 percent subscription growth in Nigeria. This, Njoku says “made watching our content far easier.

It is still 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.
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 percent of the continent’s devices.

With 76 percent mobile penetration, Nigeria is currently the most mobilized internet country in the world, followed by India at 65 percent. With this, Nigeria is the fastest growing region and is as well on course to achieve its minimum expectation of 50 percent 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.

The original version of this article was published at Techpoint.ng