“He was hungry for success”: YNaija Investigates the iROKO TV business (Conclusion)

READ: “Jason Njoku is only trying to distract everyone”: YNaija Investigates the iROKO TV business (part 1)

by Adegoke Oyeniyi, for YNaija

jason njoku

“…but do Nigerians care? We love freebies,” Adebambi says. “Piracy is a Nigerian itself. It is hard to change its nationality”, she states.

Gotter is the first to admit this “We’re struggling,” he says. “Piracy can’t be eliminated but we’re trying to push it to the fringe of the Internet where no one can find it, its badly presented or there are viruses on the site.”

Not that they are standing idle. iROKO TV has a bullish 7-man legal team divided between Lagos and New York, that locates unlicensed Nollywood movie streaming sites, and forces them to shutdown through legal action, dissuading advertisers or complaints to Google.

Jason readjusts his glasses, and shares another complex challenge: 1500 to 2000 fraudulent credit card transactions are foiled daily on iROKO TV Plus’ payment platform by two MBA geeks at its US office. “Most of them come from internet fraudsters in Malaysia who are trying to test credit cards,” he adds.

The tiger behind

Since 2011, iROKO TV has received a total of $8 million in funding from two investment firms – Tiger Global and Kinnevik. Amongst others, it has spent about $1 million on hosting its premium site, and over $5 million on content acquisition – its largest expenditure, according to Gotter.

But, asked if iROKO TV has broken even, Jason does not hesitate: “No”.

“We’re not after profit at the moment”, Gotter explains this iky response. “We’re bullish on expansion. Every penny we earn is ploughed back into the business. Our plan this year is to spend $3 million on content acquisition.”

The reason, at least as much as they claim, is for the future. Jason says the Nigerian movie online distribution business has a $100 million annual revenue potential, for instance, and iROKO’s mission is to develop capacity to that point. Consequently, its 20-man business development team has a December 2014 target to increase revenue generation to a million dollars monthly in net revenue.

“Once we hit $1 million per month in revenue, we will be facing $1 million per week and on and on,” he said on his blog recently.

To achieve the ultimate $100 million dollar goal, iROKO TV has to increase the monetisation of its potential largest market, which is easily Nigeria. Unfortunately, the poor penetration of broadband Internet in the country has limited patronage from the local market.

“Can’t even try seeing a movie with any of these network bundles”, says Oluchi Okonkwo (not his real name). “It’s frustrating. I use Swift, and that’s supposed to be reliable to a reasonable extent.”

The development of Nigeria’s Internet infrastructure is expected to open up opportunities for businesses in our fast growing economy. As with other Nigerian Internet companies, Gotter says iROKO TV is positioned and waiting for the wave of high broadband Internet access to pull its Nigerian subscription base up.

Of course, mobile Internet has been hailed as the future of the continent, and music video and movie viewing on smartphones have begun taking root in the country. iROKO plans to develop movie streaming apps to capture the future market.

Iroko, meet the giant

It will have MTN to contend with. The African telecommunications giant MTN already is threatening the sustainability of the model. In 2011, Fans Connect Online launched Afrinolly, a free-service Nollywood mobile app now massively marketed by MTN. Led by Chike Maduegbuna, the Afrinolly team in August 2012 celebrated the 1 millionth download of its app across the Blackberry, Nokia Symbian, Java and Andriod system.

“Nigeria has the largest share of download with over 65%, while Ghana, South Africa and other African countries follow,” the company said in a recent report. “USA, UK, Brazil and India make up the majority of the rest.”

No question, Afrinolly’s free service poses a threat to iROKO’s premium service.

On the web, iROKO has the advantage of YouTube’s partnership; on mobile Afrinolly has the advantage of MTN’s partnership.

Cue battle. According to reports, Jason claims Fans Connect Online distributes Nollywood movies without distribution rights, and he may counter with a legal action. Efforts to reach the Afrinolly team were unsuccessful.

Gotter also identifies a threat in South African digital TV giant DSTV. “As the largest satellite distributor of Nigerian movies they won’t look on idly as action happens in the internet space,” he says. “They are coming and we’re watching.”

Coming to a TV near you

There is yet another interesting competitor of iROKO TV, the YouTube channel Real Nolly, led by Jason’s estranged cousin and owner of iROKO TV’s first workspace, Ugochi Onyeneke.

The origins of their quarrel are unknown and Onyeneke keeps a low profile, but Jason thankfully has a lot to say. “Everyone here wants to be the boss. No one is loyal!” he says, with not a little heat. “I won’t be surprised if another of my family leaves. My friend Hugo also left.”

On a breezy Lagos morning at the grassed penthouse of the Co-Creation Hub, Obi takes a different tack. “I have no beef with Jason,” he says. I” would have even been an investor in iROKO but I didn’t have funds at the time.”

Both, as former buddies, share a rich, now fractious, history. After NollywoodLove had gone live, both men planned to start a gaming company in Nigeria. Jason raised $250,000, both soon disagreed unfortunately, and then they split ways.

“There are 3 things money can do to you,” Hugo says to me, evenly. “Make you stupid, feel invincible, or humble. You know with great power comes great responsibility. I think it would be nicer if Jason was a lot more humble than he is.”

Not that Jason would spend any time defending this allegation. Speaking to the blogger at Tech Cabal, Bakole Oluwafemi two weeks ago, he declared without missing a bit: “I AM an asshole.

But is he really?

Jason, the movie

While speaking amid a web of reporters and tech enthusiasts at an international conference, a young tech entrepreneur approached Jason with his start-up idea.

Jason spent the next 20 minutes walking through the young lad’s idea with him, in between responding to numerous calls of his mobile phone. And then he promised to fund the lad’s start-up if he hits an agreed revenue target.

This no-drama soft spot might have root in his own trajectory.

Born 32 years ago to an Igbo mother in South East London, Jason Chukwuma Njoku has risen above his challenging background.

“I’ve never met my father,” he says, pointing a finger at me.

Jason was poor. Even as the first graduate from his family, he did not own a bank account until 2010. “I am a council estate kid. period,” he wrote in 2009. “Solidly on the proverbial wrong side of the tracks. Hence im familiar with law, the streets and was stabbed in 2000 whilst fighting for a friend. Although my South LDN accent is long gone… This makes up the fundamental nature of who Jason is (i often speak of myself in third person)”

It was Gotter, his German mate back at the University of Manchester, in a miraculous string of events sold everything he owned, raised almost $150,000 and seed funded Jason’s movie streaming idea.

READ: Jason Njoku is creating the next Netflix in Nigeria

“I made that irrational move for 3 reasons,” Gotter explains. “Firstly, I was bored and wanted to take risks and win big and I could only do that at this time of my life, not when I’m on pension. Secondly, Jason was poor. Thirdly, he was hungry for success.”

Clearly, he still is.

Comments (5)

  1. Great write up…don’t think he’s an asshole though, just opinionated, and so far it has worked for him…so why change now?

  2. Again, good twisty plotty story. Good work.

    1. “I made that irrational move for 3 reasons,” Gotter explains. “Firstly, I was bored and wanted to take risks and win big and I could only do that at this time of my life, not when I’m on pension. Secondly, Jason was poor. Thirdly, he was hungry for success.” I love this!

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