Jason Njoku writes: iROKO is dead. Long live iROKOtv

by Jason Njoku

Jason Njoku
Jason Njoku

The most obvious and globally acceptable way of monetizing premium content on ANY platform is via subscriptions. Asking viewers to pay a small amount for access to content they value and love sounds easy.

I write about Spark on my blog so much one would forget I actually spend <5% of my time there. The 95% is spent on iROKO, where the Nigerian tech space has been recently a flutter of its impending demise. Apparently with the opening up of YouTube’s partnership programme for all in Nigeria (and other parts of Africa) all us Multi Channel Networks (MCN) are dead. iROKO, iROKING, Ibakatv, TVNolly et al. are all toast. So iROKO’s investors should be worried. The end is nigh; alas, RIP iROKO.

Well not really. As long as a little fledgling network called iROKOtv has anything to do with it.

I haven’t responded in my usual boisterous way because as a new father I was struggling with the expectations of new found maturity and responsibility. My wife always tells me to ignore the negative drumbeat and focus on building awesome. That it’s not pundits who control the destiny of anything, but those grinding away day-by-day in the trenches. Yes, yes yes, I know. There is a natural hype cycle to any business and if you choose to shine in the media, prepare for extra scrutiny by the media. Hype and media alone cannot hide business success and fundamentals. But, only being me, respond I must. *So as not to give away the keys to the kingdom I will focus on today backwards. Future plans remain internal and private.

It is almost 2 years to the day iROKO completed its due diligence and closed $3Mn Series A with Tiger Global. The money hit the account 30th August 2011. On that day 100% of our revenue was based on YouTube audience and monetization. The $3Mn-mission was to get off YouTube. Fast. Three months later we launched iROKOtv, incidentally the same week YouTube formally launched in Nigeria. I was at the celebration, it was wonderful. But I was unhappy. I had been unhappy with YouTube for the longest time, for a variety of reasons which all MCN’s will realise sooner or later. With zero competition and 100% market share in 2011, my ambitions far outweighed what I could achieve on YouTube and thus started the mass migration of a million dollar business away from YouTube. That was make or break. In 2011, 100% of iROKO’s revenue was YouTube. Since inception. iROKO’s MCN (we operate over 400+ channels on YouTube), the largest being NollywoodLove, have generated a combined 560,000,000 views. 560Mn in about 30 months is not bad form. We are still one of the largest MCNs in Africa. I can’t think of one who is larger than us. There is a lot of noise in the space, pretenders to the throne, but I have a team who track their views, daily, weekly and monthly and even today, they have nothing on iROKO MCN, today we still generate 25Mn+ views monthly on YouTube. We have 10k+ video assets on YouTube and still see it as a very strong and awesome platform, but not one to build a $500Mn media+technology company upon. For that, you need to build your own platform. For that you need to own your house. Own your relationships with viewers. Directly own the means to take payment from them.

Today, iROKO’s business is not there anymore. Internally, YouTube never comes up in high level conversations and unless I’m actually writing an article or something I never bother to even check our metrics there. But here is a little data to chew on. In H1 2013, iROKO saw a y-o-y increase in revenue of versus 2012 of ~270%. YouTube for the entire H1 2013 represented only 14.1% of that revenue. We made more money last month from our licensing team than iROKO’s MCN. And when I mean licensing, I mean distributing Nollywood movies to Airlines (United, Kenya Airways, Ethiopia, SAA etc), TV networks outside of Africa and other third party aggregators like iTunes, Dailymotion and Rancard Ghana. But most of the ~270% revenue growth came from iROKOtv. More importantly and especially thanks to iROKOtv PLUS.

There is a reason you rarely see comparisons between Netflix vs YouTube or Hulu vs YouTube, because they live in different universes in the content world. I have never lost a piece of content acquisition to anyone. DStv/YouTube included. Definitely not on price at least. Today there are 2-3k movies already on YouTube. There are at least 50 MCN. Mostly from Alaba producers who I refused to buy content from. 50% of the most successful YouTube MCN’s are former employees at iROKO. Ibakatv included. Alaba Nollywood economics almost destroyed Nollywood with the emergence of part 1-8 ‘movies’ and ‘oil’, where the price of a VCD movie dropped from N250 to N42 within 3 years, I see something similar happening on YouTube. The cancerous Alaba economics precipitated the emergence of New Nollywood. Royal Arts, Yvonne Nelson’s YN Production, Rukky Sanda, Moses Iwang’s Sneeze Films, Venus Productions, Elvis Chuks, Desmond Elliot Denziot, Uche Jombo’s UJ studios etc. where DVD, theatre, in-flight and internet rights are valued and paid for accordingly. AfricaMagic have an entirely separate channel for this content. They don’t mix the Alaba and New Nollywood for a reason; quality of production. For people who think it’s easy to simply bypass the organisation and monetization strength of iROKO, they simply don’t understand where our strength lies. It’s not on YouTube. It’s on our balance sheet and iROKOtv. With our 1Mn email address’ of Nollywood fanatics, our 1Mn+ monthly uniques of folk who choose to come to view movies there, our carefully curated ‘actors week’ content which even AfricaMagic have started to copy, our improved discovery and recommendation tools….. I could go on. Those who glance at the site without actually using it will never get it. But that’s cool. iROKOtv is just here to build a little awesome. If Kunle Afolayan’s awesome movie The Figurine was freely available on iROKOtv, as it is currently on YouTube, the ~80k views it has gotten in four months would have easily been delivered by iROKOtv in four days. Maximum. Just from iROKOtv. No marketing. The entire organisational DNA is there to deliver this and to connect Nollywood lovers globally to content we know they will love. That’s all we do. And we always make more money from our production partners. Kunle Afolayan cannot be making money from YouTube at this stage. At least not the kind of money this awesome movie deserves.

What is iROKOtv? At core, iROKOtv is a 1Mn+ uniques per month iROKO brand which curates the best Nollywood has to offer. We stream content free of charge and figure out how to monetize it. That’s all.

On YouTube, everything is lost. Amazing content like The Figurine is barely discoverable.

We solved today’s YouTube problem two years ago. YouTube’s partnership programme has had zero effect on us. We have seen a glut of Alaba style movies flood there for almost 18 months now and yet we still grow revenue in triple digits. If that’s death. I dream of a sweet, sweet life.

The Machines are eating Internet advertising…

Ezeani wrote an interesting blog post which mentioned iROKOtv having generic ads similar to other western brands and that we should go local with our advertising partners. I tweeted last week that I wanted to start buying stocks in Adtech companies, because they are eating the internet. When I started with iROKO I thought I knew a thing or two about Adnetworks and internet advertising. I don’t. I know nothing. Over the last 18 months, Charles who leads our global advertising team, has mastered the complicated world of monetizing impressions. We have 16+ ad partners across display and video globally. We go geo by geo trying to figure out how to super monetize the 2.49 BILLION ad impressions we have generated in H1 2013. Yes that’s right. Just on iROKOtv we have generated 2,499,000,000 ad impressions across video and display in the first six months of this year. We bleed every impression to generate as much money as possible. The only issue is online advertising is being overrun with machines. Display Side Platform (DSP), Real time bidding (RTB), automation, static bidding, agency trading desks, buy/sell side platforms, ad exchanges, re-targeting, programmatic ad buying platforms… Example? Rocket Fuel ‘the fastest growing adnetwork ever’ just filed for a $100Mn IPO last week. From their website.

Rocket Fuel in a nutshell:

Rocket Fuel delivers a leading programmatic media-buying platform at big data scale that harnesses the power of artificial intelligence to improve marketing ROI. Rocket Fuel’s powerful Advertising That Learns™ technology drives best-in-plan results for advertisers, and empowers media teams to focus on strategy, not spreadsheets. Its distributed computing engine currently screens over 28 billion ads per day, and selects the best for its customers via real-time bidding (RTB) relationships with major publishers and exchanges. This technique has proven itself across web, mobile, video, and social channels.

Awarded #4 on Forbes’ 2013 Most Promising Companies In America list, Rocket Fuel was founded by online advertising veterans and rocket scientists from NASA, Yahoo!, Salesforce.com, and DoubleClick. Rocket Fuel currently employs 512 people in 18 offices worldwide including New York, London, Paris, and Hamburg; and has a strategic alliance with cci to provide its services in Japan.

Only the initiated understand what the above actually means. With this 20 year mega trend of internet advertising being fed to the machines, I thought it was time, and more importantly Nollywood deserved a better way to capture the value in the global audience it has created. The most obvious and globally acceptable way of monetizing premium content on ANY platform is via subscriptions. Asking viewers to pay a small amount for access to content they value and love sounds easy. But is ridiculously difficult. The more I looked at this model, the more I fell in love with it. Subscription Economics are the most favourable economics online. But that requires its own post entirely.

 

Part 2 coming shortly. 

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Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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