Following the sale of ROK Studios, its production arm, to France-based company Canal+, Nigerian VOD platform IROKOtv has charted a new course going forward.
According to the platform’s founder, Jason Njoku in a medium post, IROKOtv intends to focus its efforts on growing its subscriber base.
We intend to continue to focus our efforts on subscriber growth as the only KPI which really matters. That will be at the expense of any cash flow or EBITDA profitability in the near future.Jason Njoku
With a target of 1m subscribers, the platform will be using the funds realised from the sale of ROK Studios – which Jason Njoku called the largest media transaction in West African history and possibly Africa (outside of SA) – to pursue this goal. Njoku says this drive will be enough to keep the company from sourcing additional funds.
To achieve this, IROKO will need to invest heavily in some areas including content. VOD platforms need a deep pool of content to keep their acquired users and IROKOtv wants to do this while diversifying from just Nollywood into Bollywood, Telenovela, Korean and Kids content.
It will also help to increase its annual Annual Revenue Per User from ~$8.3/year (Nollywood only) to a more meaningful $12–15.
This is a positive step forward and gives it a good platform to reach more users as it could expand beyond its current locations. But since it already sold ROK Studios which has been its major supplier of content, it will have to deal with getting licenses, however expensive, for its content.
The company will also need to work on its distribution. Last year, IROKOtv adopted telemarketing as a way of bringing people on board its services. Now, it will be scaling its salespersons to 1,000 by the end of 2019, 2,000 by next year and 2,500 by 2021.
This style of marketing is quite innovative considering the Nigerian market where several users don’t see the need to pay for some services. To get the average Nigerian consumer to part with their money, you need a physical person to convince them.
It will also be investing in its marketing and productivity (new hardware / CRM system) which it believes should yield results from August. According to Jason, IROKOtv will also stop its Kiosks where it provides data-free downloads to users. The focus will be on telesales and scaling the number of its dealers from 112 to 500 before the end of the year.
But then with a focus largely on user acquisition, IROKOtv will need to get its model right as well as strike a balance with user retention, if it’s to make any difference. Hopefully, they have learned from the challenges KweseTV faced. Even with its huge subscriber base and funding, Kwese Iflix has still not been able to scale much. The platform’s current insolvency paints a picture of their progress so far.
For now, IROKOtv appears to have all its bases covered as it plans to also list during its 10th anniversary which is 29 months away. It is looking to list on the London Stock Exchange with a target valuation anywhere north of $100m+.
All we can do now is wait and see how it pans out for IROKOtv.
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