Ericsson’s ConsumerLab recently published its first-ever Television and Media Report for Nigeria, which indicated that Nigerians spent about N54bn on Video on Demand streaming in 2015.
The VoD is a system that allows consumers to select and watch abridged video content of their choice and on the spot on Personal Computers, tablets, smartphones and television, using Chrome.
The company stated that from a possible population of about 100 million people living in the country, findings from its study showed that only 27 per cent (27 million) of them stream videos.
Industry experts, therefore, estimated that if 27 million Nigerians yearly subscribed to iROKOtv, a leading video-streaming platform in the country, and other VoD platforms at N2,000 yearly Average Revenue Per User, they definitely spent about N54bn at the end of the year.
Ericsson said in the report that the figure should have been higher but for the poor data service from telecommunications companies in the country.
“Only 27 per cent of Nigerians stream videos for now because of the inflexible data plans and slow download speeds flagged as reason for low video streaming uptake,” it said in its report.
It predicted that the figure would rise in 2016 given that, “changing consumer needs were fast creating a new TV and video landscape in Nigeria.”
However, Netflix seems to have positioned itself to ensure the rise of the figure in 2016 with its video-streaming service, which went live in more than 130 countries, including Nigeria, last week.
Netflix’s video streaming covers almost the entire globe, except China, in a huge global push by the Chief Executive Officer, Reed Hastings,to counter slowing growth in the United States.
Shares of the company, whose popular shows include Unbreakable Kimmy Schmidt, Daredevil and Narcos, jumped 9.3 per cent to close at $117.68.
A source within the company, who said he was not authorised to speak, said Netflix had positioned itself to make over N100bn in Nigeria in 2016, more than 100 per cent of what was made in the country in 2015, going by the Ericsson report.
“On video streaming, we have a strategy to make at least twice the amount that was published in the Ericsson report. We have a target to awaken Nigeria’s curiosity to online streaming of videos, and we want to capture the payTV market in Nigeria which we consider exorbitant,” he said.
India, Nigeria, Russia and Saudi Arabia were among the major countries where the service was launched, Hastings said in a speech at the Consumer Electronics Show in Las Vegas.
Netflix, which had expanded into more than 60 countries before last week’s Wednesday’s launch, previously said it aimed to reach 200 countries by the end of 2016.
Nigerians shared both their excitement and frustration. They listed data, piracy and power as the possible challenges to Netflix thriving in the most populous black nation.
“Why is Netflix in Nigeria? But we don’t have high-speed Internet. We already have Alaba boys giving us movies for N100,” John Ibe wondered.
Similarly, another VoD subscriber, Ebuka Okafor, said, “They better return to where they are coming from. We know where we download free stuff from. They won’t last here.”
An unidentified social media user said, “Netflix should please come along with faster Internet and cheap data or else the next tag to trend in few months will be Netflix leaving Nigeria.”
As of October 2015, Netflix reported 69.17 million subscribers worldwide, including more than 43 million in the United States.
Nigeria’s movie industry known as Nollywood has struggled to deal with the activities of pirates in the country especially with those at Alaba in the Ojo area of Lagos State.
Similarly, Nigeria’s data speed has proved to be a problem over the years despite the leading telcos upping their services.
These two problems, including that of electricity, might prove to be a bottleneck for Netflix but Nigeria’s population will no doubt be an advantage to the movie streaming company.
Meanwhile, the projections of the Managing Director, Ericsson Nigeria, Johan Jemdahl, seem to suggest that with Netflix, the figure will rise because TV and video content consumption are no longer tied to the traditional TV screen.
“Though television screens remain the single most popular platform for TV and video consumption, it only accounts for one third of the total time spent watching videos. Sixty-four per cent of the time is spent watching videos on a mobile device (smartphone, tablet and laptop),” he said.
According to him, today’s viewers of TV and video content in Nigeria do not want to adhere to a specific device or schedule, and seek the freedom and flexibility to choose what they watch, when to watch it and on which device.
“Out of the regular TV viewers in Nigeria in the survey, only 37 per cent are satisfied with the choice and variety of available content. They prefer to choose and pay for the channels that they want. Current pay TV services offer limited customisation capabilities,” Jemdahl said.
He said, “The proliferation of mobile devices and availability of mobile broadband has significantly altered the consumption patterns of TV and video content in Nigeria. With the ownership of smartphones significantly higher than that of television and PCs (which include desktops and laptops) and more Nigerians demanding flexibility in their viewing schedules, the opportunities for mobile television cannot be overstated.
“Thirty-six per cent of the time spent watching TV and video content is done on television screens making it the single most popular platform for TV and video consumption in Nigeria.
“Fifty-one per cent of consumers want to choose when they watch TV and video content rather than follow a set schedule.”
The Ericsson Nigeria MD added that findings from the study also showed that only 27 per cent of Nigerian consumers streamed videos more than weekly, compared with the global average of 76 per cent.
“Respondents identified connectivity issues and restrictive data charges on mobile data as factors affecting their online streaming experience,” he said.
He added, “Furthermore, the study shows that the same factors have an impact on piracy. Though global research has shown a decline in file sharing and illegal streaming services when easy-to-use and reasonably priced legal VoD services are available, limitations in connectivity and restrictive data charges drive the purchase of pirated content on DVDs.
“With TV and media services accounts for 43 per cent of Nigerian consumers’ entertainment expenses, as much as 16 per cent is spent on pirated material and the remaining 27 per cent on pay TV.”
When asked if the entry of Netflix was a threat to his business, as was being speculated in the industry, the Chief Executive Officer of iROKOtv, Jason Njoku, said the company’s vision was to have one million subscribers in the country by 2020, adding, “If we can reach that number, then iROKO will be a billion dollar company. We simply target $1bn. That is what I believe Nollywood, Nigeria and West Africa deserve.
“As a billion-dollar media and technology company, we curate and export Nigerian culture globally. The industry now needs us as much as we need it.”
He said that in 2015, across iROKOtv’s YouTube channels, it saw 313 million streaming video views, saying that one and eighty-five million of that was largely from second-tier Nollywood content. “What percentage was Nigeria? Six per cent; and it’s free,” Njoku said.
“Nigeria has consistently seen around 50 per cent less engagement in Africa than comparable markets in Western Europe. Today, streaming is just difficult. I have no doubt it will get better. But it’s not today.
“The Internet Service Providers have improved immensely, but of the tens of millions of Internet users, 99 per cent are mobile. Remember Nigeria is the most mobilised country in the world and the average person buys 105megabytes. The ISPs cater to the 0.5 per cent.”
He added, “Around seven months ago, we actually started adjusting our product, pricing and content around these cold hard realities. As things would have it, on Monday we actually put our new Android app into the playstore.
“It is still better and in testing mode, but it definitely put into perspective the new focused direction we are headed. We are currently testing our new web platform (Western markets) too.”
He said Netflix being in Nigeria had zero impact on iROKOtv and its vision for the future. “If it’s Nollywood fanatics, you know those guys can watch three to five hours per day, so iROKOtv is still the only place they can find most of what they are looking for.
“Considering we are one of the biggest actual producers of Nollywood, I don’t see that changing anytime soon. In time, we will be able to produce 200 movies a year ourselves, no shaking. And with the evident collapse of the DVD market, this only makes us stronger.”
Perhaps because of the enormous opportunities in the market, telecommunications company, MTN acquired AfriNolly and DoBox. Both are said to pose stiff competition to iROKOtv.
The Public Relations and Protocol Manager, MTN Nigeria, Mr. Funso Aina, said, “The MTN DoBox andAfriNolly came as a game changer to the movie industry in Nigeria. Those who place premium value on watching movies on-the-go through the use of cutting-edge technology have been adopting it significantly since it was launched.”
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