Netflix entry into Africa presents “zero impact” to iROKO – Jason Njoku

The announcement that Netflix will roll out across all of Africa came as a big surprise. It had already announced its intentions to go into South Africa but no-one really knew the scale of its ambition.

According to Jason Njoku, CEO, iROKO Partners, Netflix coming to Africa including his native Nigeria, will have no impact iROKOTV – a subsidiary of iROKO Partners.

Explaining on his blog, Njoku explained that Netflix and iROKO are different sides of the Video On Demand coin. According to him, iROKO is not Netflix. “iROKOTV is iROKOTV,” he said.

“People fail to remember that Netflix is an 18 year old company – in 18 years they have been refining their skills at getting people to subscribe for content. They are just awesome at it. But Africa is a little different.”

“What iROKO is, and has largely always been known for, is the home of Nollywood both at home and abroad. The strange thing about the mourners of iROKO is they always mention how most of our subscribers are in the West.

“Yes the U.S. and U.K. represent approximately 55 percent of our subscription base. And it has grown – not at break-neck speed – but steadily over the last few years, in Netflix’s back yard. Folks in the United States and the United Kingdom – the top 2 Netflix markets – have been happy to pay for the little service we provide. Building a subscription business is challenging.

Heck we are only 4 years old. So why people think we will suddenly die now that Netflix is in Nigeria and by extension Africa, is totally beyond me.

I remember when Deezer came to Nigeria and Africa. I have been a subscriber there for almost 3 years. I use it, without fail, daily. But when they released their initial public offering (IPO) documents, Africa wasn’t even mentioned. It represented nothing. And that is 3mb mp3 files. Not 300mb movie files which require a continuous connection for streaming. But Netflix is in Africa!

In 2015, across our YouTube channels, we saw 313 million streaming video views; 185 million of those views were largely long form 2nd tier Nollywood content. The percentage of those views that originated in Nigeria was approximately 6 percent.

And it’s free. YouTube = Free To Air Internet. Nigeria has consistently seen around 50 percent less engagement in Africa than comparable markets in Western Europe. Today streaming is just difficult. I have no doubt it will get better. But it’s not today. Our Internet Service Providers (ISPs) have improved immensely, but of the tens of millions of internet users, 99 percent are mobile. Remember Nigeria is one of the most mobilized countries in the world and the average person buys 105mb of data. The ISPs cater to the 0.5 percent of the market. Around 7 months ago, we actually started adjusting our product, pricing and content around these cold hard realities.

So Netflix being in Nigeria and by extension Africa has zero impact on iROKO and our vision for the future. If it’s Nollywood fanatics, you know those guys can watch 3-5 hours per day, so iROKOtv is still the only place they can find most of what they are looking for. Considering we are one of the biggest actual producers of Nollywood, I don’t see that changing anytime soon. In time, we will be able to produce 200 movies a year ourselves, no shaking. And with the evident collapse of the DVDmarket, this only makes us stronger.”