In case you haven’t heard, iROKO is killing iROKOtv. They are gradually phasing out a large chunk of non-paying users from iROKOtv, in the hope of converting them into premium-only iROKOtv Plus customers.
According to a series of blog posts by iROKO Partners founder, Jason Nkoju:
- Only 5% of iROKO’s global audience is a paying audience. The remaining 95% are freeloaders montetised by adverts.
- iROKOtv currently generates revenue in 170 countries. Apparently a bulk of iROKOtv’s revenue is generated in just 30 countries, as he classifies the remaining 140 as “Rest of the World” (ROW).
- The ROW countries represent > 400,000 unique monthly views. Advertising revenue is a meager $0.15 per non-paying user per month, as against $6 per paying user.
- iROKOtv currently has at least 1 million registered users (paying and non-paying)
- iROKOtv attracts over over 1 million unique views per month. From my observation, quite a number of these views are from untraceable freeloaders (you can watch free movies without registering).
- As at June last year, Nigeria alone accounted for about 3% of iROKOtv’s revenue.
- iROKO’s free YouTube Channel, NollywoodLove still generates around 12% of iROKO’s revenue
- IROKO’s entire multi-channel YouTube network still generates around 25 million views a month.
- Less than 3% of iROKOtv’s global monthly audience is a paying audience, generating 26 times more revenue than free users.
These are interesting figures. First I should point out that they are only killing the free iROKOtv in the 140 ROW countries. Please take note also of the difference between iROKO (the startup), iROKOtv (free and apparently getting killed) and iROKOtv Plus (premium), as I will be deliberate in my writing them. Now I am no statistics geek but I’ll try to make sense of these figures.
The Curious Case of iROKOtv
It appears that this revamp may not be as radical as it is made out to be. Going by the above figures, iROKOtv Plus accounts for definitely less than 84% of iROKO’s total revenue – NollywoodLove has 12% and iROKO also makes money from licensing to Airlines, TV networks outside of Africa and other third party aggregators like iTunes, Dailymotion and Rancard Ghana. However, Jason Njoku maintains that most of their revenue is still from iROKOtv Plus. Let’s peg “most” at a generous 60% shall we? ROW countries account for about 400,000 of the over 1 million monthly views. That means iROKO is only axing about 24% of it’s revenue stream! And that’s not subtracting the 3% who already pay.Yes, axing 24% of your revenue still is a very bold move. But it’s not as much “killing” as you probably assumed. If you ask me, this looks like one very huge experiment that can go either way, but with minimal negative effect.
According to Jason Njoku, Nigeria remains iROKO’s primary market. It would have been nice to know which countries fall into the ROW class. Last time I checked (this morning), and unless the migration to premium-only is yet to commence, Nigeria isn’t one of them. So yeah, it looks like iROKOtv will remain free for a while in Nigeria. And it’s easy to see why:
I estimate that iROKOtv Plus currently attracts something around 1.5 million unique views per month. 5% of that audience equates to about 75,000 paying users. Let’s assume all 75,000 are committed to 3-month subscriptions that run through the course of the whole year. That’s $5 per month, every 3 months, amounting to $4.5 million annually. And that’s not accounting for price differences across the globe. For example, iROKOtv Plus is cheapest in Nigeria, where users part with the equivalent of $3 per month (3-month commitments). So if Nigeria accounts for 3% of annual revenue – $135k from $3 per user per month – than means there are less than 4000 paying users in Nigeria. Interesting. That figure could have increased or reduced since June 2013. And of course, these are all just wild estimates. But they give us a general idea of the current situation.
What The Future Holds
iROKO’s target is 1 million paying users, generating $100 million annually, by 2020. I must say that’s quite ambitious. Not impossible but very ambitious. I mean:
Data porn. Top100 subscribers account for 14% of video views per month. We have 1M+ viewers. #passwordsharing
— JasonNjoku (@JasonNjoku) April 11, 2014
Jason estimates that there are only $30 million Africans in the diaspora, a large percentage of which still watch Nollywood movies by DVD. On the other hand, there are easily 50 million Nollywood fans in Nigeria alone.
I believe the African market, Nigeria especially, will have to play a huge role in helping iROKOtv reach its 1 million subscriber target. There are a number of obstacles they will need to surmount though, including but not limited to broadband penetration, recurrent payment structures and of course, the competition. I wish them the best of the years ahead.