Iroko Partners finds a You Tube business model selling Nollywood and is set to move into music video sales

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Nigeria’s Iroko Partners has hit upon a way of distributing Nollywood content legally, making money and giving some of that money back to the artists who made it. In under a year it has generated around US$1 million in advertising revenues from 2.2 million views and is now expanding into offering music video clips on the same basis. Russell Southwood spoke to its CEO and founder Jason Chukwuma Njoku at Mobile Entertainment World in Cape Town last week. (see the interview video clip link at the bottom of this article).

Jason Njoku is Nigerian-British and noticed how things were changing:” “Suddenly my mother stopped watching British TV and started watching Nollywood.” So Jason decided to go back to Lagos and set up a You Tube site to distribute Nollywood content legally, launching in November 2010. He now has 47 people working for him and has reached agreements for distributing over 800 movies:”We are buying more on a weekly basis.”

Previously there were around 30 illegal sites distributing pirated copies:”We are the only legal guys.” When Njoku first approached the producers and directors they were extremely suspicious, but Njoku persuaded them to give it a try and they became really convinced when the first cheques started arriving.

There were no digital copies and often the master copies of movies had to be re-mastered. Furthermore, there were no descriptions of the movies or cast lists. So Iroko Partners has 13 people employed watching movies to provide these things and to create a descriptions database.

It has attracted 2.2 million unique viewers and 16 million views from 231 countries and all without any marketing. 20% of traffic is from mobiles and 60% of search enquiries come from mobiles in Nigeria. The really telling statistic is that the 6th biggest market is Malaysia and 11th biggest is Nigeria (around 30,000 unique views). With better bandwidth, viewer numbers will inevitably increase in the home of Nollywood. 

94% of the advertising income comes from 5 countries with the big markets including USA, UK and Canada. Almost all of these views (even in Malaysia) are from the widely distributed Nigerian diaspora. The biggest movie is Blackberry Babes which is a 60 minute movie that has had 900,000 views: “Blackberry didn’t even know it had been made.”

Njoku noticed that there were a lot of e-mails asking for Genevieve Nnaji movies. She is now so famous that she is only makes a couple of films a year. So he put out a call to producers and directors for Nnaji movies. Within a week, he was running a season of movies with two new movies a day, which was very successful:”Only the Internet could have that kind of immediacy.”

His next project is expanding into Nigerian music video clips:”The music entertainment space in Nigeria is an absolute mess. One song can be uploaded as many as 20 times. Music sales cannot be verified. We can do that on You Tube (with views). We can tap into a global audience and give money back to the artists. He has signed 40 artists (so far including  El Dee, Kefee, P Square and Bez) and has plans to sign 100 more.

According to Ayite Gaba, Business Development, Google who is responsible for developing You Tube partners in Sub-Saharan Africa, the advertising income paid to African partners varies between US$10,000-US$1 million:”Views and revenues are largely coming from outside Africa at the moment and we have no sales offices (for You Tube) in Africa at the moment.”

This business model will only work if you can reach audiences in the low millions, with the majority of them coming from the diaspora. Nollywood is unique content and there is perhaps no other African content that has this kind of “pull” globally or that scale of diaspora.

However, those that want to prepare themselves for the future (let’s call that the next three years) need to start positioning themselves now. If we use Facebook as proxy for Internet users in Nigeria, only 30,000 of 2.9 million people currently view movies on Iroko but within the next 1-3 years bandwidth will improve to the point where the numbers will go up to at least a million. With better 3G and LTE not far off, many of those will view music clips on their mobile phones (feature and smart).

One of the early lessons from this platform are that you need to stop using the worst of African business methods (take the money and pay nobody) and start giving money back to those who make content. Another lesson is that it pays to have properly described content in depth that allows you to exploit the “long tail” by curating seasons or special presentations. These opportunities can spotted through feedback via e-mail and SMS.

At this point, the African business temptation is to see the launch of endless copy-cat sites like this. It won’t work unless you can persuade the content producers that you’re serious and have the means to connect to diaspora audiences. Iroko’s money comes from the large number of viewers it gets without marketing: other content will need to fight for its place with different kinds of marketing to achieve these numbers. But if you have access to archive catalogues, now is the moment to start thinking about whether there is a platform that could distribute your content successfully online.

New video clips on Balancing Act’s You Tube Channel:

Jason Njoku, CEO, Iroko Partners on distributing Nollywood and Nigerian Music using You Tube

Emma Kaye, CEO, Bozza on South African townships creating their own online content

Julian VanPlato, CEO, Trans Digital Media on a new live streaming mobile service for Africa

Sami Leino, COO, Spinlet on the launch of an "iTunes" for Africa

Ofer Ronen, Business Development Director - Broadcast, Gilat Satcom on its move into African broadcast services

South Africa: Styli Charalambous, Managing Director, The Daily Maverick on its new iPad subscription service

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