IrokoTV, a leading streaming site in the African film industry, has revealed plans to let go of 150 staff, reduce investments in the continent, and focus on its audience in North America and western Europe, The Cable reports. The move, says CEO Jason Njoku, is part of a resizing process.
Founded in 2011, IrokoTV has been described as “Africa’s Netflix.” But since 2016, Njoku said, IrokoTV has struggled with the Naira devaluation, which cut its subscription cost from N3,000 ($18) in 2015 to N3,000 ($8.33) in 2017, with the present exchange rate of $477 leaving it at $6.3. In the West, however, the average income per user is between $25 and $30.
“Internationally, we were effortlessly growing,” Njoku said. “All of the macro and individual issues plaguing West Africa were essentially not major issues in the West. Yes, jobs were being lost. Yes, economies were contracting, but with all the stimuli leaders were injecting, it made the impact on the average person marginal. Our annual ARPU internationally is $25-30. When people talk to me about Netflix and their impact globally, and then in Africa, I always smile. My response is the same. Globally, streaming media is booming. In Africa, it is regressing. It’s impacting everyone. We couldn’t adjust prices as the primary aim was to defend revenues and cash flows, so cutting subs revenues and vanity subscribers weren’t going to contribute to salaries come month’s end.”
Another factor is the new Nigerian Broadcasting Commission (NBC) code, which requires exclusive content to be sub-licensed, which would affect other pay-TV and streaming companies like Multichoice, NetFlix, and EbonylifeTV.
“Between the COVID-19 fallout, rapidly devaluing the currency and hostile regulatory environment, it’s time to pause the burn,” Njoku said. “Even after pushing incredibly hard in Africa for the last 5 years, our international business represents 80% of our revenue today, so by taking out Africa growth-related costs, we cut our $300k/month burn to $50k/month.”
In May 2020, due to COVID-19 and the resultant drop in revenue, IrokoTV let go of 83 employees and cut the salaries of 49 others in Nigeria. On the 150 being released now, Njoku writes: “The ambition in this terrible jobs market is to try and give our departing teams the best odds of success in what is, unfortunately, one of the worst job markets in decades. We wish them well on their adventures, it is no fault of their own. They definitely tried their best. We all did.”
IrokoTV is the second major international business to pull out of Nigeria this month, after ShopRite.
Otosirieze Obi-Young is Editor of Folio Nigeria, where he profiles innovators and facilitators in culture: art, business, entertainment, activism, health, food. He is a writer, journalist, curator, media consultant, former academic, and Founder & Editor-in-Chief of Open Country Mag, a new online platform covering African literature. In 2019, he received the inaugural The Future Awards Africa Prize for Literature. In 2020, he was named among "The 100 Most Influential Young Nigerians" by Avance Media. Find him on otosirieze.com or on Twitter & Insta: @otosirieze.