IROKOtv at 8
Before you continue, and if you care enough, I strongly suggest you read| irokotv at 4 | irokotv at 5 | irokotv at 6 | irokotv at 7
1st DECEMBER is IROKOtv’s birthday. So it's been another year. But what a crazy year. If 2018 was sombre and reflective. 2019 has been everything but that. It's been drama all the way. We did the biggest deal in our lives (and probably Nigeria media land) exiting ROK to Canal+. You know I still miss that business. Firstly Mrs Njoku and I worked completely in sync for so many years, it was pretty difficult to untangle things. People who I used to speak to on a weekly basis for many years? We barely speak at all now. A lot of my travel activities over the last 5 years were driven by ROK-related work, she was the growth engine of IROKO whilst we waited out the SVOD winter. And what a winter it was. Iflix exited Africa, Kwese/Econet collapsed into administration and just this week, CELL C the #3 telco in SA, is closing its VOD service BLACK after spending R1B ($68m) in 2 years. The great hope for Internet TV hasn’t quite been extinguished, but that burning flame of opportunity, which made so many media folks spend $1B over the last 5 years, has definitely gone out. Yet, miraculously, IROKOtv remains there. Kindling. Waiting. Biding our time. 8 years is a long ass time to do anything. But to survive has been straight up timing everything to perfection. And only in hindsight. It wasn’t corporate planning or big idea strategy. It was feeling the market and moving faster than anyone else in a direction that, tactically, we can outperform anyone in. And we usually got it wrong the first time. But in the spirit of experimentation, we just kept on plugging away. Iroking - we got it wrong. ROK is the perfect example of how we got it right, as it was the single reason we ultimately survived the SVOD nuclear winter. She overshadowed IROKOtv completely. Now IROKOtv is back to center stage. Back to the core of the company. It’s weirdly refreshing. It's like we are falling in love all over again. And it's time to grow. Below you can see the last 3+ years of IROKOtv subs’ numbers. At some point, we stopped growing. We needed to raise capital to keep investing for growth, we tried for all of 2018, but that exercise ultimately ended in failure. So H1 2019 ushered in the dramatic and overly emotional exit of ROK. But we exited. With resources to push growth forward
If 2018 was filled with despair, 2019 was an emotional breakup with the freedom to think of a glorious future. We returned $5m to shareholders in a special dividend (thanks again ROK). We adjusted the cap table with me spending 60% of my personal dividends to increase my shareholding in IROKO. Q3 was a bit of nightmare which I can’t really go into, but Q4 has been about dreaming of the future. We are now in product mode. We are now thinking of the future and looking to grapple with the big structural problems we need to overcome to be super successful. I think at core we are going to reposition again. The streaming wars are here and we are simply going to sidestep that. ShowMax just started sports streaming. We see our value in the very global IROKO brand, the product and engineering core of the organisation, our ability and willingness to be bold and extremely experimental.
- We are focused on increasing Annual ARPU for IROKOtv in Africa to $20–25. (we want to get close to GOtv’s ~$30/year). Today it stands at ~$7.77
- We are focused on Free cash flow positivity (this requires tightening of costs — in October in order to build up the NY engineering team, we had to downsize the London team from 20+ to ~7 or so people).
- We are focused on 500,000+ paying customers (subscription and other services) in 2020 as we shoot for our 2021 IPO.
- We are focused on generating $9–10m in 2020 revenue.
- We are focused on a $120–150m IPO on the LSE AIM in H1 2021.
That’s it. Anything outside of that isn’t even remotely in my frame of reference.
Super Entertainment App.
We have the brand, we have the customers, we have the product sense. We have a world class engineering team. Our approach is to figure out a suite of products or services of interest to our subscribers and create new relationships with them. Some know this phenomenon of “Super Apps”. We are in the entertainment game. We are following the Chinese & South East Asian approach and building into and out of our existing product base services we think our users will love. With no-one willing to fund our losses and FCF positivity in mind, we aim to fund growth from customers. I love the example of Tencent Music Entertainment.
So with that in mind over the next few weeks (and months) we are introducing a slew of new bolt on features to help drive our 3 core KPIs. Some will fail, others will work. Today we start with
1. International Content pack
We have acquired 3,826 episodes of Bollywood, Telenovelas, Kids, Turkish and Korean series. Not films. Series. We are attempting to create and increase engagement with our audiences and series easily drive that. Today ~70% of our subscribers use the service monthly. We really need that to be 90% so 2020 content strategy is also about retention. 5 years ago we tried and failed with Hollywood/International content (always experimenting). As you can see, mass market audiences cannot really afford or are willing to pay the prices for Hollywood content. So we acquired content that can be priced at their comfort levels. We still expect this need time to grow into a big business for us but super excited to see where this ends up. This launches at some point in the next week or so but definitely before Christmas.
2. IROKO ShoutOuts.
Shoutouts is a little new, a little out there and something I am super nervous about. We are all about connecting Nollywood with audiences around the globe. There are very few services that I have come across which establishes a direct and emotional connection with fans in this way. You can literally make someone’s year by getting their favourite Nollywood star to give them a personalised shoutout. For birthdays, for work promotions, for weddings, for graduation, for anything really. It's definitely not an original idea but I don’t think it has been applied to for Africans and to bonafide real world celebrities, as we are doing. We are launching IROKO Shoutouts with some of the biggest stars of Nollywood, who have a cumulative social media following of 100m+ fans. For N50,000 ($150) fans will receive a personalised 60s shoutout. I have no idea whether this will work. But what I do know is if it blows? Well. Hold onto your hats! In my bones, this feels like a game changer for IROKO.
With the resources now at hand and serious focus across the organisation, I feel very upbeat about what we can do in 2020. It’s been a tough 8 years. But it’s just fantastic to know that our organisation is actually tougher.
As always. We end with thanking God. We thank Mrs Njoku & Kids. We thank the executive team and employees. We thank our investors. We continue to build this thing called IROKOtv. May her days be long. Because she has somehow managed to survive this long.
Impose ta chance, serre ton bonheur et va vers ton risque. A te regarder, ils s’habitueront — René Char
Create your luck, seize your good fortune and embrace risk: they’ll get used to you.
Last week, our beloved colleague, Emmanuel Opemiposi Mesoran was laid to rest — a highly valued friend, colleague and member of the entire IROKO family. Rest in Peace.
And finally…
I believe these articles provide actionable insights for African startups. I like to think (and believe) it helps folks grow shareholder value in their own careers and organisations. Folks tell me there is a direct impact on their moral and revenue growth for startup building in Nigeria. And they can sometimes be a little entertaining too. From 2020 I am going to put up a paywall around my articles. Nothing too expensive but just a heads up… Remember take it easy this December. School fees are due in January.
