BrandArena: IROKOtv Targets One Million Subscribers, Plan to List on London Stock Exchange - Jason Njoku

Wednesday 24 July 2019

IROKOtv Targets One Million Subscribers, Plan to List on London Stock Exchange - Jason Njoku

Following the acquisition of ROK studios by French media giant Canal+, IROKOtv plans to focus on growing its subscriber base, according to Jason Njoku.

Jason Njoku, founder IROKOtv
In a recent blog post by the IROKOtv founder, he stated that the company “intend to continue to focus our efforts on subscriber growth as the only KPI which really matters. That will be at the expense of any cash flow or EBITDA profitability in the near future.”

Though he did not disclose the value of the ROK sale, he confirmed that the cash realised from the sale was now enough to pursue this goal of growing his subscriber base to over 1 million.

He also added that “once IROKOtv gets to 1m+ subscribers, the intention is to explore a listing on London Stock Exchange.”

He however admitted that he would have to invest in content, product, engineering and most importantly distribution to even remotely stand a chance of reaching this goal.

To solve the distribution issue, he said that this would require IROKOtv to successfully scale its outbound (telesales) efforts. The plan is to scale agents to 1,000 by 31 Dec 19, 2,000 total agents at 31-Dec-20 and 2,500 total agents at 31-Dec-21. IROKOtv would also need to invest in marketing and productivity (new hardware / CRM system) which should yield immediate results from August 2019 onwards.

IROKOtv is discontinuing the kiosks programme to focus on the telesales organisation and/or its dealer network. It intends to scale dealership programme from 112 currently to 500 before the end of the year. This will then be scaled to Accra and throughout Ghana in order to extend the content distribution reach. The objective is to remove the friction of content.

As per growth internationally and in Africa, IROKOtv says it would invest equally in both areas as it focuses on subscriber growth. It will introduce an international annual plan of $25/year compared to the current $60/year which is seen as relatively expensive. This new price point would be supported a consistent and performance-driven marketing budget equal to that in Africa.

Another key point is the new diversification strategy. IROKOtv wants to diversify from just 100% Nollywood into being a major African distributor of Bollywood, Telenovela, Korean and Kids content.

It hopes that this will ultimately help increase its annual ARPU from ~$8.3/year (Nollywood only) to a more meaningful $12–15.

For comparison’s sake MCA’s DStv & GOtv, The largest PayTV operator in RoA generated annual ARPU of $32.4/customer in their last FY. That is between DTH and DTT. $12–15 annual ARPU remains reasonable considering the content offerings.

As IROKOtv approaches its 10th anniversary in 29 months, it plans to focus on the business with an eye to liquidity event in the near future. It wants to list the business. Hence it is looking at a listing on the London Stock Exchange.

The target valuation would be anywhere north of $100m+. This will most likely be in 2022, where its revenue would be $20m+ with an operating margins of <$1m (or possibly negative).

It appears that Jason has all the plans to make the goal happen. All we have to do is bring out our popcorn packs and watch the unfolding of next great Nigerian success.

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