Jason Njoku, 39, is the founder of IrokoTV, a streaming service for Nollywood, Nigeria’s film industry. Iroko began as a YouTube channel called Nollywood Love in December 2010 and launched in its current form a year later. From its origins streaming Nollywood movies, Iroko has grown into a company with its own production arm, ROK Studios, which it sold to the French television channel Canal+ in 2019.
It all began with a Shopify account
I’ve always had an interest in communities and how you build products and services for specific groups of people. I’ve been in media since I was in university. In 2008, I started to sell Nigerian music and movies on eBay. I set up a Shopify account and sold physical CDs of Nigerian music to people in the U.K.
From there, I launched Iroko and became involved in the infrastructure of the industry as a creator and distributor of content. The thing about Nollywood is that there is a very clear customer base: You either love it or don’t.
[Our customer] is anybody who likes Nigerian content. So this means, yes, they’re Nigerians, but increasingly over the past decade, more people have expressed an interest in lots of Nigerian content. Whether it’s in Zambia or Kenya, Jamaicans in New York, audiences in the Caribbean, people in the U.K. Anyone who loves Nigerian and West African content is the customer.
The challenges facing Iroko in Africa
We decided to focus on Africa in 2015, and over the past five years, there have probably been about $1 billion invested in trying to get people to watch content on mobile devices. The $1 billion has come from Netflix, Iroko obviously, Showmax, iflix, and many others trying to build a business in Africa. And there has been close to a 100% failure rate.
It has little to do with the actual platforms or content. It has to do with the macroeconomics of the region we’re trying to speak to.
It’s not like Iroko has suffered and everybody else has been crushing it. It’s a question of why no one has been successful. The answer is that people are just poor. The macroeconomic picture over the past 10 years hasn’t really improved. There is a version of events in which it may never work, and that’s something I’ve come to terms with. This is based purely on people’s ability to pay for subscriptions and buy data.
The biggest dream killer in Nigeria is the devalued currency. We haven’t changed our prices in five years. We charged 3,000 naira a year in 2015 when we started; 3,000 naira a year in 2015 was $18. Today’s 3,000 naira is about $6.60. The disposable income for a vast majority of Nigerians has gone down. The cost of living in Nigeria has gone up, but wages haven’t.
Ultimately, we’ll have to raise the price in Nigeria. But then we’ll remove ourselves from being a mass-market product and announce ourselves to the 5 percenters. There are two markets in Nigeria, the 5 percenters and the 95 percenters. To build a business with the 5 percenters, you may have to charge a huge amount of money. Can we increase 3,000 naira to 10,000 naira? Of course, we can. But if people are struggling at 3,000 a year, then what’s going to happen at 10,000? That shrinks the market dramatically. But we may end up there.
|TOTAL ACTIVE USERS:||250,000 to 300,000|
|MONEY RAISED:||$30 million|
Focusing on international growth and IPO
It’s a question of economics. If we get 1 million users in the West, we would be getting $25 to $30 million. [Iroko will have about 300,000 subscribers by year’s end.] Someone paying $25 to $30 for an annual service there is nothing. It’s very affordable.
Yes, there are fewer prospective customers in the West, but in terms of their being able to use, understand, and appreciate the service and pay for it, we overwhelmingly find that people in the West are able to be higher-quality customers over a longer period of time.
I think we’re pretty far away from the IPO. For that to happen, we need to be taking in between $8 and $10 million in revenue. Pre-pandemic, we had a clear path to doing that; now, it’s become much more challenging. But with that said, our goal hasn’t changed. This year, we just need to survive. We’ve taken all the costs we can out of the business, and now we need to start building on revenue. My sense is that we’re delaying for a year or so.