The rise of online movie streaming business in Nigeria
Two young entrepreneurs are making it easy for Nigerians in the Diaspora to watch home movies online.
They are Jason Njoku and Blessed Ilukor Idornigie, who worked, at some point in his career, for the former.
Jason established iROKO TV six years ago. Before 2011, no Nigerian firm had ever thought of providing films on-demand that could be paid for. Jason found out that it was a huge opportunity to blend Nollywood with technology to bring quality films closer to Nigerians.
He started as a mainstream online movie and, within the first year, provided instant access to over 5,000 Nollywood film titles not only to Nigerians but also people across the globe willing to pay $5.
According to Wikipedia, Njoku and Gotter, an investor, launched NollywoodLove, a YouTube channel, which was profitable within two months of launch. With other partners like Sarah Lacy who worked at the time for Tech Crunch, NollywoodLove caught the attention of the US-based Tiger Global, early investors in Facebook, who were interested in expanding their reach in emerging markets.
After securing $3million from Tiger Global in 2010, the company launched iROKOtv on December 1, 2011. The site drew viewers from 178 countries around the world.
As at 2014, iROKO was the largest distributor of African content globally on YouTube with 950 million video views across its managed channels. The firm is said to be worth up to $30 million.
In January 2016, Jason announced multiple deals of $19 million from French media giant CANAL+ and an existing investor Kinnevik AB.
“I guess, ultimately, the big market is Nigeria…this is where the content originates from. If you spend any time in Nigeria, it is difficult to come across a person who hasn’t heard of Nollywood. But at the same time, the pan-African nature of it — from the Kenyans to the Ghanaians to Gambians to people in the DRC — there’s a massive base of people who really love this content. So because of the broadband restrictions in Africa, we are currently focused on the diaspora,” he told CNN in 2012, when his target was only 30 million Africans in the Diaspora and the broadband in the continent was ‘restricted’.
Through his Spark, many other younger entrepreneurs have raised money for expansion, including Mark Essien, founder of Hotels.ng, who raised $250,000’s seed fund from it in 2013.
Next is Blessed Ilukor Idornigie, CEO of IbakaTV, who started in 2011 with just N1 million and in his room. He leveraged YouTube to reach Nigerians and Africans in the Diaspora, having acquired premium partnership with the video-sharing platform, which opened doors to channels such as IbakaTV|Nollywood, IbakaTV|Yoruba, AfricaMagicClip and IbakaTV.
Today, IbakaTV has about one billion views. The viewers, mostly Africans in the Diaspora, pay to watch Nollywood movies in dollars.
Blessed told Start-Up Digest that watch time of his movies runs into billions as well.
“What we do on YouTube is Advert Based on Video on Demand. What that means is that we provide content and YouTube provides advert on it. We launched what we called S-VOD, that is, subscription based on video on demand. That’s why we launched IbakaTv. It’s based on subscription model platform. People pay weekly, monthly, quarterly, annually or bi-annually for them to have access to our content,” he said.
“You can pay in naira but it converts automatically into dollars. The success story is that it is like a DSTV on the internet. But this has no limitation.
“We didn’t shut down our YouTube. What we said is, ‘If you want to watch our movies on YouTube, you watch the low-budget movies there. For the high-budget movies, you can watch them on IbakaTV. They are more expensive. YouTube can draw a lot of traffic and we use the platform to drive customers to our platform,” Blessed told Start-Up Digest.
He explained that he started IbakaTV in his sister’s room. His sister gave him the first laptop he used.
“I started with N1 million. Over time, I brought in investors. The initial fund that came in was N100 million. With that, we were able to start. From there, we were able to expand. We started on YouTube and we had over $2 million, which we pumped into Ibaka. Although we are still sourcing for funds, that was the investment we put into IbakaTV.com. It’s capital intensive. We are already in the process of sourcing for more capital. Since that time to now, if you talk about investments in Ibaka, it’s running into millions of dollars. We have already involved the Bank of Industry. They just approached us,” he said.
What attracts investors to Ibaka? Blessed said it was the potential.
“It is a new era. It’s like us living tomorrow. In Nigeria, we are migrating from analogue to digital. So whatever we are doing now is embracing the future. We are talking about the population. Those embracing what we are doing now are not up to two percent. Imagine when infrastructure is in place when it comes to the Internet. Imagine the population. The good thing about this business is not just about the money but about the potential,” he said.
Due to the high cost of data in the counry, Blessed is coming up with a strategy, which is offline streaming to enable Nigerians everywhere to have access to movies.
He explained that his firm was already a ‘millions-dollar’ company and would become a billion dollar one soon.
He is not satisfied with the tough business in the country and urged the government to improve it.
“If IbakaTV is in the US, we would have made more success. Our business is online and a lot of banks and the government do not understand it. The environment is not friendly; we don’t have light. Right now we are burning diesel. The banks would rather put money in oil. So it’s not friendly in our market, but BoI came and is willing to support,” he added.
ODINAKA ANUDU