Dear Jason Njoku, MTN Dobox is competition

Last December Dobox, a Video on Demand startup, struck a deal with MTN to provide customers with better access to their catalogue of Nollywood movies. I must confess – and I probably speak for a lot of people – I’m not so sure I heard about Dobox before the announcement of the MTN partnership. However, I believe that the MTN partnership has been a major boost. But is it enough to topple the competition in iROKOtv (yes, competition)? Probably not….yet. Jason Njoku won’t even acknowledge MTN Dobox as competition. If you’ve not read his post on defining competition, you probably should read it first. While he raised some really good points, I think he might be missing a few seemingly benign but, I dare say, very important details.

 

Freemium vs “free” premium

Jason is convinced iROKOtv’s business model is more attractive in comparison with MTN Dobox’s premium-only. With iROKO, users can stream unlimited, but ad-supported, movies for free. They can also opt to have the ads removed by paying a monthly subscription of about N800 a month (iROKOtv Plus), which will also grant access to exclusive content – 13 new movies a month. MTN Dobox, on the other hand, offers no free content. You part with between N150 and N500 per content. You can stream as many times as you want but only within a set period (3 – 4 days). iROKOtv’s model appears to be more attractive.

I’ve had a couple of “close shave” encounters with iROKOtv. I’m not exactly a Nollywood fanatic but once in a while someone reliable recommends  a movie they think I might like, often initially exclusive to iROKO. But I can hardly ever justify paying a full subscription fee just to see one movie – 12 others of which I know I will never so much as glance – so I always end up not subscribing. Of course, in light of Dobox’s pricing, shelling out N800 to iROKO for one movie might not be such a bad idea after all. As long as I’m free to opt out once that month’s subscription expires.

But there’s one “tiny” detail Jason conveniently chooses to ignore. The fact that with MTN Dobox, I don’t pay for data used in streaming. That’s a differentiating factor you just can’t ignore. Not in a country where internet is still so damn expensive. You’ve got to wonder –  of how much use is having access to 13 videos a month if I may end up seeing only a few because I’m constantly scrutinizing my data usage?

 

The Blackberry motivation

iROKO is available on the Web, Android and Windows Phone. MTN Dobox is available on the Web, Android and (legacy) Blackberry. Anyone see what I see? Yes, it works on freaking legacy Blackberry. I’ve tested it and it works just fine, by legacy Blackberry standards. That’s a really big deal in this part of the world. A lot of consumers still rely on Blackberry Internet Service for their cheap internet plans. But even as cheap as the BIS plan is, it doesn’t allow streaming (at least not officially). You usually have to get a separate data plan for streaming. The average (Nollywood loving) Blackberry user, for whom the internet usually begins and ends with BIS, couldn’t be bothered with such a hassle. So what happens when someone offers them the option to stream rented movies for free on their device?

 

The giant in MTN

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True Nollywood fans are very familiar with the concept of having time-limited access to rented movies. For these guys, what’s most important is that every movie they can normally rent from the neighbourhood video rental is also in Dobox’s catalogue. Jason points out how the non-exclusivity of movies on Dobox’s catalogue means iROKO can easily “raid their content at will”. Fair point. But he still has to acknowledge the fact that they’re not dealing with just Dobox, but also with MTN. MTN aren’t new to the entertainment game and they possess the potential muscle to out-muscle (pardon the pun) any competition. I have no idea how iROKO get their content, I’m sure the iROKOtv crew know their onions, but MTN are no pushovers either.

Of course there’s the concern  of adoption rate. iROKO have a minimum of a 2-year head start so Dobox will have to play catch up. But remember that MTN have some of the biggest and most conspicuous ad campaigns in the country; they spare no expense in tooting their horn. Remember the Blackberry people described earlier? MTN know how to get those guys. And those guys are not to be taken for granted as they will form the bulk of user base. If we’ve learnt anything from history it’s that while MTN may not always be the first there, they almost always have the last laugh. Remember the Saka Saga?

Yes, the figures Jason referenced are quite impressive but most of these hits are coming from outside the country. Last time I checked, MTN has at least 50 percent of the total 56 million mobile internet subscribers in Nigeria. There’s a lot of potential in those figures. I mean, this is MTN we’re talking about. Which brings me to the final point

Define your competition

I feel like Jason needs to clarify exactly who iROKOtv’s primary target audience is. He’s referencing traffic figures from the United Kingdom while referring to DSTV and GOtv as competition. Last time I checked, DSTV and GOtv are not available in the UK. The way I see it, MTN Dobox has more potential to be real competition for Multichoice in Nigeria. Traffic to iROKOtv website from Nigeria is much lower than in the US and UK. Jason says less than 3% of their audience pays. It would be nice to know how many of that 3% actually watch from Nigeria. He also says they make most of their revenue from paying users. So we how much of that surge in traffic translates to cash? With their new partnership with MTN, Dobox are shifting focus to consumers resident in Nigeria. If Jason insists iROKOtv’s primary target audience is Nigerians living in Nigeria, I’m afraid MTN Dobox is indeed competition.

Question is, what service are consumers resident in Nigeria more likely to patronize? One where they pay only for what they watch, and at no extra streaming costs? Or one where they pay for full access to everything but are at limited liberty to access all of it because of data cost considerations? Only time will tell

Photo Credit: e³°°° via Compfight cc

41 Comments

  • *claps for MTN* Net neutrality totally out the window. And this is just the first of MTN-backed startups that will enjoy the same advantages.

    • Seyi Taylor says:

      I think that’s the real story here. If telcos can just partner with content startups to create zero-rated internet traffic applications, they hurt competition seriously in Nigeria. The seriousness of this can’t even be under-emphasized.

      • Donnie Ibiyemi says:

        GBAM!!

      • Iyinoluwa Aboyeji says:

        competitioon is coming. Smile is already doing 4G LTE content plays with startups I know and when they deploy in major cities in 2015 we’ll all be shocked. I’ll wager focused bandwidth spectrum companies will do a better job at content partnerships than telcos can since that’s all they’ll focus on.

        • Iyin I disagree. I beleive content guys want the widest reach. And they know where to find it.

          the primary consumption device for content globally for online content is mobile (even moreso in Nigeria). Telco’s remain the gateway to the cookie jar. They touch the mobile devices. Unless, the focused bandwidth provided (SWIFT etc) really get their connected devices into the hands on users, they will still remain largely backhual/enterprise type providers.

          Off course, there is always the option for this guys to embed themselves in the value chain. They can aggregate content providers in a single DC on the one side and pass them thru to an MTN/Etisalat on the other side. Steady data toll on all content traffic.

          Time will tell.

    • Abikoye Olufemi says:

      Did not see this before making my post. Exactly net neutrality is gone. First step in a slippery stone.

    • Taiwo J Orilogbon says:

      Why are we even talking Net-Neutrality when we barely have “Net” ? Internet is still rich man’s thing in Nigeria, most people I know only have internet on their mobiles.

  • Jason 'Igwe' Njoku says:

    @seyitaylor:disqus good solid article. Some clarifications though.

    * Nigeria is our 4th largest market today. Just below Canada.
    * Surprises me as iROKOtv haven’t really spent money in Nigeria
    * the product itself (streaming) isn’t perfect for this market. You will soon see iROKOtv 3.0
    * I have real figures (post all the marketing) from actual folk who were on Dobox.
    * True Nollywood fans aren’t interested in one movie. True fans watch 2hrs per day.
    * 6/10 Top Nollywood movies of 2013 are on iROKOtv – some of which we actually co-own
    * We moved beyond acquiring movies in 2012. We finance and create our own.
    * Our primary market is and will always be Nigeria.
    * ~100k monthly uniques for a streaming service minus marketing is a solid first step.
    * Expect that to explode in the 24months.

    Ignore all of the above. Time will tell.

    • Shittu says:

      Sir, the post was written by Muyiwa Matuloko not Seyi Taylor.

    • chika says:

      I have read with interest some of your strategies and argument but pardon me to say, they appear flawed.

      How many of the movies do you co-own and how deep would your pocket be for in the next 2 years to beat MTN?.

      You need to start doing lots of things to encourage your investors. Very soon Nollywood producers et al., would move to the highest bidder and I hope you are ready for it.

      I would rather have you sit down and look at a long term strategy that is radical and not incremental because something very disruptive is knocking on your doorstep.

    • And equally solid counter-arguments but this article has my byline, not Seyi’s

    • Jason 'Igwe' Njoku says:

      And not if y’all have realised but Naspers (owners of DStv) have the largest market cap of any African company. MTN included. DStv is a monster. They keep me up at night. Because they have 7 channels dedicated to Nollywood and African content. And have been killing it for 25years. A little known fact was Naspers were a original founder of MTN and at one point owned ~10% of the company. History aside.

      Perhaps we are doomed. But hey, it was a good ride whilst it lasted.

      iROKOtv 3.0 cometh.

      @MuyoSan:disqus – good solid article, sorry for the earlier mistake.

      • Anon says:

        But all this doesn’t stop you from performing. Seriously.

        I hope Irokotv 3.0 will deliver but If Irokotv 3.0 doesn’t deliver, ..I think you need to log out before they time you out.

        All the best, biggie.

        Disclaimer: All Anon comment must have a disclaimer!

  • olammide says:

    Woooow MTN is here to kick ass and slowly grabbing the tech/startup market. The have the market, the audience and the resources so why not. Nice piece really informative

  • Abikoye Olufemi says:

    This Dobox deal is also a step away net neutrality which many internet activists are fighting for. If the data which is going to be provided is free then that means MTN has an ISP as put Dobox above other services and made the neutrality of content a dream in respect to this sector of the internet. It’s a very slippery road in the long run cos soon other sectors would pay other ISP to make their content premium by being 0 data and more and thus taking away the fair playing ground the internet is. It’s good that competition exist but in the aim to create competition let’s not go to far.

    • Taiwo J Orilogbon says:

      MTN is not putting Dobox above other services, I think the only way this will be a problem is if MTN chooses to make streaming of Dobox data of better quality than that of their competitors. We don’t have any details of the deal, but it’s theoretically possible Dobox is “paying” MTN for the data being streamed from their servers, something like “toll-free” lines.
      I think this is a good partnership for a country like Nigeria where bandwidth is much more expensive than internet services.

      • upnepa says:

        Until MTN continually does this ‘deals’ with companies that can afford them and then what happens to small companies that can’t?

        • Taiwo J Orilogbon says:

          Wait let me check… Google has been on a buying spree of recent for Artificial Intelligence companies, they can because they have the money. How has IrokoTV been able to be the top aggregator of Nollywood movies? Let me guess, they have good relationship? Of course not, they have relationship and pay good money. Unfortunately that is how business is and it’s the same reason why you all have been beefing Rocket. They have the money and they spend it

    • Chukwuyere Izuogu says:

      Those fighting for net neutrality
      are primarily located in developed countries where the internet has matured to
      the extent of disrupting the traditional media channels. Aereo and Netflix are
      perfect examples (unfortunately not IrokoTV in Nigeria). I do not think the
      internet access market in Nigeria has matured to the extent where we will start
      seeing the effects of ISPs discriminating in transmitting contents over their
      networks. Maybe in the future where (real) broadband penetration has deepened across
      Nigeria.

      • Abikoye Olufemi says:

        True Net Neutrality is not YET an issue in Nigeria due poor internet penetration and low number of internet Nigerian content providers but you do allow an issue to rise and fester till it becomes too big of one before then you attack it you have to nip it in the bud and which what this MTN deal.is a bud that has to be nipped.

  • Anon says:

    When talking bout scads of cheddas and figures, Jason be that nigga. He’s serving the entertainment sector, and he’s performing with articles and figures, no offense biggie.

    Let’s hit the box. Don’t get it twisted, Dobox is your competitor. Direct one for that matter. If not for the Nigerians in Diaspora, you won’t be able to come out and show us those figures or talk bout how irokotv is performing wonders.

    The main reason or one of the main reasons why you built irokotv was to serve Nigerians(those in residence) but you ain’t serving them. most people in Nigeria don’t know what Irokotv is.

    The biggest factor that’s making Nigerians shy away from watching Nollywood movies is the internet, not much about power, but the gaddamn internet.

    Dobox understands the problem and they silently cracked it. Now tell me, if I want to watch movies, who will I patronize? Dobox of course, not because of their price but bcoz of how easy they made the process. They solved my biggest problem.

    Jason, there’s still hope for irokotv. First, you gotta admit that dobox is your direct competitor and stop telling me ‘Time will tell’. Next thing to do is to move, strike a deal with Etisalat and Glo. I’m very sure those coys are waiting for you. If it’s to give em 1% of irokotv, just strike the deal with em. and solve irokotv potential users problem. Or if there’s a way for users to watch movies without taking much of their data, maybe that would help. Remember, not all fingers are equal and in Nigeria, things are hard. Or is iroko targeting folks in Banana island and not those in Ikeja under bridge?

    Most people like me don’t give a damn bout the price you charge per month, but we give a fcuk bout data plans.

    And if you think time will tell, hoping Nigerians will leave dobox and move over to irokotv without solving the pains, You’re on your own. Seriously, no offense.

    By the way, You might be right, Time will definitely tell me how Dobox is rocking ma fellow Nigerians asses!

    Disclaimer: I’m a neutral fella, who’s playing a neutral game.

  • Phlamy Jones says:

    A little bit of hilarious scenario analysis.

    1. MTN buys up artists and their brands like they buy footballers in Europe, you might be

    needing plenty transfer window for them to act for you oo and plenty cash

    2. MTN brings all the movies world and apparatus(lol) from SA down to Nigeria to own a good share of the Nollywoood.

    3. MTN partners with other members of Association of GSM operators to offer same free data on Dobox

    4. i ve got plenty others.

    These guys have got loads of cash that would make what you have look like coins and they are also diversifying big time because of various innovative disruptions in their own system. They are also likely go into business not necessarily to make money from it but to achieve another aim

  • Demola Ogundele says:

    Interesting article…

    Truth is Irokotv is still the leader and giant in this nollywood streaming industry.

    The truth is, exclusivitiy is not a strategy in the long run and frankly in a few years when there are more movie streaming services in the country, the true difference would be who has more users/better service which is where most content owners will want to place their content e.g itunes, spotify etc… In addition, once this sector really starts to show real growth more independent content producers with quality content will emerge and enter the market owning their own content 100%..

    Very interesting point on competition in Nigeria and I agree based on the numbers. However,Jason and his team have a proven track record and more experience in this industry to exceed expectation and do what they do best to overcome the deep pockets of MTN..

    Also, deep pockets in a new industry is probably a bad thing especially when you have zero or 2 at most ideas of what your building and you are still in the trial and error stage. It will take dobox about 2-3 years to market effectively and get the kind of traction that Iroko currently has in the consumer’s mind. Regardless of the so called big cash they have; there is no escaping it; in order to build dobox there will be a lot of work. The worst thing that can happen is if the dobox team is not competent (I hope they are) then a lot of money will be wasted, because I dont care how much money you have nothing will happen if your team is clueless in the industry they have decided to conquer.

    Wiith all that said, dobox does have MTN which is an advantage to gain a fair chunk of the market sharp and effecient, they can create magic and change the game, but only time will tell.

    At the end of the day, so far its all PR and marketing from dobox.

    Let’s compare results this time in 2015

  • Taiwo J Orilogbon says:

    I painted a scenario for someone some time back. Imagine I pay #800 for IrokoTV subscription for one month and then paying another #5000 for 3GB of data on Glo, after streaming 3 – 4 movies on IrokoTV, (granted that’s the only thing I did), my data has finished but my subscription is on. I used Glo, because they have about the cheapest data plans of all the telcos. in summary, I have spent #5800 to see 4 movies, when I could have 2000 or less on Dobox.

    Of course Dobox doesn’t have as much content as IrokoTV, which is a major advantage IrokoTV still has at the moment.

  • TheTaichou says:

    I like analytical effort that has gone into Muyiwa’s piece. I do have a few (16) observations which are open to be refuted by anyone who is more informed.

    1. {Fact} New NollyWood movies cost N800 max
    2. {Fact} Best value of all is buying the movie outright.
    3. {Fact} Next best value is iROKOtv’s quarterly plan, then DoBox’s
    4. {Assumption} Most Nigerians are aspirational and are intensely price-sensitive over stuff which bestows zero social-status value, such as the NollyWood movies we watch
    5. {Assumption} Most people who are worried about the bandwidth and capacity to stream a movie will opt to buy instead, end of.
    6. {Assumption} Those who want value for money will go the iROKOtv route
    7. {Fact} As little known as iROKOtv is in Nigeria, they still trump DoBox in market share
    8. {Assumption} Jason isn’t fibbing when he says Nigeria is iROKOtv’s 4th largest market
    9. {Assumption} iROKOtv is still not yet in the black, or if so, only marginally
    10. {Assumption} PayTV is a long game for startups with deep pockets.
    11. {Assumption} Jason and Bastian know fundraising
    12. {Assumption} Jason is probably working on a similar arrangement with a competing Telco
    13. {Assumption} For DoBox to overtake iROKOtv, they will not only need to execute flawlessly (good start, by the way), but they will need iROKOtv to drop the ball badly and frequently. Similar to the odds of Manchester United winning the League this year.
    14. {Fact} The local market for streaming NollyWood movies is not the jewel in the crown and will not be for the foreseeable future. That said, there is room for more than one competitor.
    15. {Fact} #11 brings me to the one truth which everyone is waiting for Jason to acknowledge – DoBox IS iROKOtv’s competitor. Their most organised, and most threatening competitor to date.
    16. {Assumption}None of us is an iROKOtv investor so we are powerless if Jason wishes to withhold his public acknowledgement of DoBox as competitors. This does not affect the price of either rice or pure water.

  • muyiscoi says:

    How well do those toll free data stuff work? I once tried out spinlet subscription that was supposed to assign a particular data specifically for spinlet streaming. Even though I got the data, I still got charged from my normal data plan.
    Hope this is better but i’m not too optimistic.

  • ajibz says:

    Nice article Muyiwa, i am glad that you mentioned the blackberry motivation, and in a bid to shamelessly plug, TeXSoft built the blackberry app. Datz all.

  • JO says:

    Jason benefits most from the Ecosystem with all of the free advise you guys are giving him… We need to start charging him…

    Disclosure: I think Jason is too full of himself.

    I think it is too pedestrian of us here to think there is actually anything free.

    Dobox’s model will not last because someone (Investor or Customer) has to pay for the data used in streaming the video… It cost money to buy and run the equipments that provide the “free” streaming service… Who bears that cost?

    The cost of streaming is must be transferred to somebody. Investor bears the cost because he is willing to watch his business grow as quickly as possible and loose money at Rocket speed. A customer will pay because he wants to exchange his money for value.

    In Dobox’s case, I am guessing the investors are footing the cots of the cheap/free streaming. But, Dobox has to realize that content is what will bring and keep customers on Dobox service. Unfortunately, Jason has beaten them to the content race. Even if they begin to buy more contents, Jason will still trump them because he is investing in the production and distribution of these movies.

    As a customers, enjoy these “freebies” while it lasts. As tech enthusiasts, there is nothing like freebies.

    Besides, why do Nigerians like to be deceived with freebies?

    We need to move away from this poverty mentality. When you pay for a service you can demand better quality from the service provider.

    On a lighter note: I think Yahoo is to blame for this “Freebie” psyche because back in the days when most of us started using the internet, we were all nursed nursed by Yahoo’s Mail or Geocities or Messenger, etc.

    Real businesses are here to will wean us all of the freebie psyche.

    “There is no free lunch in Freetown”

    • There are a couple of ways to play the data thing. But be sure DoBox (and the customer) is paying for it some how. Here is how I would have played it.

      1/ Just what if the cost to stream is already embedded in to the rental price? This is what any smart business man will do (assumption @The Taichou)

      2/ Also, video streaming requires large bandwidth so there is a basis for DoBox to work out a discount deal with MTN on Data. They probably are not paying the same rates as we regular folks.

      3/ Finally, DoBox could have just leased some capacity from MTN outright and taken on the upfront cost. Who knows?

      BTW, I agree Jason get’s to gain the most from all these highly insightful commentaries (pro bono consulting). Dude we are sending you an invoice…

  • Isola-Osobu Jerome Adejuwon says:

    Will Iroko 3.0 involve Iroko partnering with Etisalat? Will be a nice little war Dobox and Iroko with their telco voltrons. I really hope it happens that way.

    PS: Etisalat has the best Internet service among the telcos

    • Preach… that will be one heck of an elephant tussle.

      The real beneficiaries will be other content creators/apps and end users. Each Voltron will be forced to snap up more and more content partnerships to pull users onto it’s data services.

      Get ready game studios… you are next

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