In the movie-making world, there are three names that stand out: America’s Hollywood, India’s Bollywood and Nigeria’s Nollywood. The second-largest film industry in the world in terms of production output, Nollywood, is virtually unknown in most parts of the world. Yet it generates USD 286 million a year for the country economy. In Nigeria, only the government employs more people than the Nollywood. The film industry makes about 2500 movies every year. This means 30 to 40 movies release every week. Despite its astounding popularity, Nollywood lacked a perfect distribution channel till the advent of iROKOtv.
Local content for Africans by Africans
iROKOtv is the platform for African Video-on-Demand (VOD) content. It was founded by Jason Njoku. When Jason's mother asked him to get her Nigerian movies in London, he found neither DVDs nor online platforms. So he started iROKOtv. Three years from its founding, iROKOtv now has more than a million monthly visitors and 5,000 popular Nollywood movies in its library. Most site visits come from the African diaspora. Million and half visitors monthly come from 178 countries around the world, half of which is from the US, UK and Malaysia.
New round of funding
A year ago, iROKOtv raised about $10 million in Series B and Series C funding. They mainly spent it on acquiring content, hiring a tech team for the site and opening new offices in Lagos, NYC, London and Johannesburg. The latest $8 million funding round – series D – saw a new US-based investor Rise Capital and was led by previous investor Tiger Global with Sweden-based Kinnevik participating.
The series D round will help the company to continue to focus on growing its traffic, content curation and building a cross-platform content distribution system. Major efforts will be put on exploring new geographies for a traffic source. Currently, the traffic consumption mainly comes from abroad. The transition from diaspora-focus to an Africa-based audience is the next big move for the company. Another shift that will happen is a drift from ad-supported freemium model to subscription model largely. Right now 95 percent of the content is being consumed in the freemium model, iROKOtv makes from 22,000 subscribers paying $5 for 12 new movies each month.
Founder and CEO Jason said: “When iROKOtv launched in December 2011, users could access all content
for free — all they had to do was register with us. In July 2012, we shifted to a freemium model, iROKOtv PLUS, where we started charging $5 a month for fans to access the more expensive, brand new Nollywood movies. 95% of our site remained free [supported by ads] and we also removed the registration process, The introduction of the subscription service brutalized our traffic and growth by roughly 50%, but increased our revenue prospects considerably. The sharp decline in user numbers was tough to take at the time and I agonized over whether or not we’d made the right decision to start charging for the top quality content. It turns out that it definitely was the right decision to make, in order to continue monetizing our site and providing the best possible service to our viewers around the world. It took around eight months but we are now back to the same level of users we were before iROKOtv PLUS was launched.
Internet penetration and video streaming challenges
According to a Nielsen report, mobile video is increasingly popular in emerging market regions such as Africa. The report stated: "Mobile video is particularly prominent in Asia-Pacific and Middle East/African regions, where 74 and 72% of online consumers, respectively, report watching video on mobile phones at least once a month, and almost 40% (38% and 37%, respectively) say they do so at least once a day."
The only thing that can come in between meteoric growth and iROKOtv is the rate of broadband penetration in Nigeria. Africa has a population of 1.1 billion and 16 % of it is digitally connected. Particularly, Nigeria is a fast growing ICT industry, the country recently overtook South Africa in internet usage to rank the highest in Africa. It has been growing at 20 per cent over the last five year. 45 million out of a population of 170 million people have access to broadband Internet. The faster whole of Africa comes online the better for everyone.
What the user wants from video platforms
With the huge invasion of media into our lives – from IM apps like Whatsapp to social networks like Facebook and Twitter, video content platforms like YouTube, Vimeo -- users do not have as much time to watch traditional TV as they used to. And when they do watch, they want to binge and go spendthrift with episodes. [The story of latest Arrested development episode is a clue] The trend with this digital generation is “give me all the episodes at once and the choice of when to watch it, and let me watch it on any device”.
The main reason why the future is bright for VOD services like iROKOtv is the kind of experience users want. That is any device, any time, any content, any location as opposed to traditional TV consumption. Also very high-definition streams should be available, from anywhere to anywhere. Users want to pay once to buy and watch it as many times as they want, as often as they want, wherever they want. Users also want to be able to share what they have already without legal liability.
Though it sounds far fetched right now, it is not entirely impossible that soon, if a producer comes to iROKOtv with an idea for a film, using big data analytics they could say if the film would be a blockbuster hit or an utter disaster. The producer could receive constructive data driven advice on how much money to put in to the project too. When the database grows to a sizable scale, it could even give an indication of how much money the movie will make. For the local shoe-string budget content producers, this could make things blissful.