Nigeria-based Nollywood streaming company Iroko TV plans to go public by listing on the London Stock Exchange Alternative Investment Market (AIM) in the next 12 months to raise between US$20m and US$30m.
According to the company, the move will put Iroko TV on the select list of African companies that have listed outside their primary market. It would also help Iroko get diaspora subscribers as well as give the company a valuation of up to US$100m.
The AIM listing will also draw attention to Iroko TV products and services, increase its brand recognition and improve its business overall, the company said. The move comes after Iroko dropped a plan to float on AIM back in 2019 and instead sold its production studio, ROK, to Canal+ for an undisclosed sum.
Iroko TV’s CEO, Jason Njoku, told TechCrunch: “I believe the time is right to take the company public and shore up its finances. US$10m to US$15m would be for corporate development, the rest will be secondaries for shareholders. As a private company, Iroko’s valuation was never priced above US$70m.
“We exited ROK for close to the total amount of capital we raised for Iroko; we have returned US$11m to early investors and shareholders already. We still have material capital left from the ROK-Canal+ acquisition coming in every six months until 2023.”
The company increased its annual subscription from US$25 to US$60 for its diaspora subscribers in 2020 and saw no negative impact on the number of international subscribers. Customers gained from the diaspora suggests demand for African content is high among West Africans abroad, which has led the company to direct its focus towards gaining more customers internationally.
“This is more profitable for the company because the revenue is less impacted by the instability and constant devaluation suffered by the Naira. An international subscriber base is much more sustainable,” Njoku added.
Nigerian video-on-demand company iRoko is planning to target markets in North America and Europe rather than focusing on African growth.
The move is part of efforts to reduce ‘cash burn’ and curb losses caused by, among other things, Covid-19, which have led to the axing of around 150 jobs.
Jason Njoku, iRoko’s CEO, said that even though international subscriptions grew by 200% in April, consumer confidence ebbed and collapsed as a result of the economic impact of Covid-19.
The pandemic came at a time when the company’s revenues were being further squeezed by the latest rounds of naira devaluations and an amendment to the Nigerian Broadcasting Commission code regarding payments to artists.
“All of the macro and individual issues plaguing West Africa were essentially not major issues in the West. Yes, jobs were being lost. Yes, economies were contracting, but with all the stimuli leaders were injecting, it made the impact on the average person marginal,” said Njoku.
“Our annual ARPU [average revenue per user] internationally is US$25 to US$30. When people talk to me about Netflix and its impact globally, and then in Africa, I always smile. My response is the same. Globally, streaming media is booming. In Africa, it is regressing.
“iRoko is now ‘pausing the burn’ and plans to hunker down and see what the next 18 months brings. Even after pushing incredibly hard in Africa for the last five years, our international business represents 80% of our revenue today. So by taking out Africa growth-related costs, we cut our US$300,000-per-month burn to less than US$50,000 a month. Still high, but once things normalise we should have a clear path to free cash flow and profits in 2021.
“We still believe in Nigeria, we still believe in Ghana, we still believe in Africa. It’s a strange thing to realise that even after almost nine years with iRokoTV, five exclusively focused in Africa, we still may be too early for Africa.”
Last year, iRoko sold its African film studio and international TV network ROK to French audiovisual firm Canal+ Group, which bought the company to strengthen its content production reach across Africa.
ROK founder Mary Njoku and Canal+ International CEO Jacques du Puy tell Content Nigeria about this week’s deal bringing ROK under the wing of the French group.
The recent acquisition of major African film studio and international TV network ROK by French audiovisual firm Canal+ Group is a move that is geared towards strengthening the latter’s content production reach across Africa.
The deal sees Nollywood broadcaster and production studio ROK change hands for an undisclosed sum while ROK’s former owner, SVoD company Iroko Partners, takes full ownership of Francophone African SVoD platform Iroko+, which was previously a joint venture with Canal+.
Content Nigeria caught up with ROK founder Mary Njoku and Jacques du Puy, CEO of Canal+ International, to learned about the motives behind this new partnership.
Elated about the acquisition, du Puy says: “We are happy to welcome Mary Remy Njoku in the Canal+ family. We are glad to expand our activities in Africa to content production. We are proud to strengthen our channel portfolio with the popular and successful ROK channels, that will sit alongside their French sisters, Nollywood TV and Nollywood Epic.”
“I am delighted and proud,” adds Njoku, who is married to Iroko founder and CEO Jason Njoku. “The acquisition of ROK by Canal+ is a great milestone for our business and Nollywood as a whole. We are taking Nollywood to new audiences and that has always been the goal, to take our authentic African stories and share them with the world.”
Du Puy notes that the creation of Nollywood TV began some time ago. “We created Nollywood TV in 2013 after the acquisition of a Nollywood movie package from Africa Magic, part of the MultiChoice Group.
“This content immediately proved to be one of the most relevant in French-speaking Africa, and we had to partner with Iroko to ensure a regular and high-quality supply to Nollywood TV. We also sporadically bought Nollywood series from other producers in Nigeria and recently acquired a small package of premium movies to offer Canal+ subscribers in Africa a Nollywood festival on our premium channel this August.
“We have been acquiring content from Iroko ever since 2013 to feed Nollywood TV. Mary and Jason are not only partners but they are also friends now. We then invested in Iroko in 2015, becoming one of the main shareholders. There is already a long history between Canal+ and Iroko. And ROK Studios is just the largest and more successful producer and aggregator in Nigeria and Ghana,” he adds.
With this week’s deal a landmark accomplishment for the four-year-old start-up, Mary Njoku elaborates on what has propelled the success of the studio so far.
“The fans and lovers of Nollywood across the world motivate us to constantly create quality content. Nollywood fans have a voracious appetite for new content; this is why so many Nollywood films are produced each year.
“However, it is a difficult balance to maintain and develop quality at scale. I had always felt that there was a need for a studio that empowered young people to put their skills to work and create the content that we now see on our ROK, ROK2 and ROK3 channels in Africa and the UK. Now, with the fact we are working even closer with Canal+, we can take this content into French-speaking Africa and eventually the rest of the world.
“Our teams across Accra, Lagos and London cannot be left out of our success story as we all work hand in hand to make ROK story a success,” she adds.
According to both du Puy and Njoku, the deal includes the production studio as well as the four ROK-branded, English-language channels that currently air on African pay TV platforms DStv and GOtv and in the UK on Sky. Canal+ channel distribution subsidiary Thema will oversee the distribution of these channels, adding to its own Nollywood TV and Nollywood Epic channels.
Continuing her leadership role as the director general of ROK Productions, Njoku believes the content that will now be produced will be of higher quality. “With this partnership, we now have the resources to create higher-budget movies,” she says. “Our budgets are typically fairly modest, so get ready to see different types of content across all ROK platforms, including animated content – content that will cut across English- and French-speaking Africa.
“ROK will receive more resources to create content without the loss of our creative freedom. It was very important for us to retain creative rights as this is the main reason for ROK’s success today. We will develop Nollywood in French-speaking Africa and globally through Canal+’s Africa and global channels. Surely this will open more doors to other untapped parts of Africa that need to be reached. However, essentially, it will be more of the same, just at an even faster pace.”
Du Puy thinks the quality of Nollywood movies out there can be enhanced. “Talent is there and Nollywood movies are already very popular,” he says. “But it is true that the audience is more and more demanding, so the quality will progressively enhance because ROK has the unique capacity to detect, select and grow the best and newest talents in Nigeria or Ghana. In addition, we are planning to invest in technical equipment that could be lent to our associated producers.”
Both executives are preparing head-on for any challenges that may arise from this partnership. According to Njoku: “With every partnership comes challenges. However, we hope to resolve all issues amicably and as quickly as possible. We’ve been working alongside Canal+ for nearly five years now so we know how the other works, where our strengths lie, and how to get the best out of one another.”
“We first need to consolidate the leadership position of ROK Studios and go on growing the audience of the ROK channels. Then we would love to explore African kids content, which is very rare at the moment in Africa, and try to bring the Nollywood expertise to French-speaking Africa and to grow the production of daily series there,” du Puy adds.
Strengthening its position as content provider and giving it access to the entire Nollywood value chain, the deal will see Thema working with ROK as well as engage in the distribution of third-party Nollywood content to digital operators across the world; produce and distribute four channels under the ROK brand broadcasted in English-speaking Africa and the UK.
Looking forward to serving fans with more content across all platforms, Njoku says: “ROK will produce thousands of more hours of Nollywood content to deliver movies and original TV series for Canal+ Group’s audiences in French-speaking Africa. As part of the acquisition, Canal+ Group will continue to collaborate with Iroko, with non-exclusive content distribution of ROK content via the Iroko SVoD app.”
The deal, as well as moves by SVoD giants like Netflix to commission more African content for its platform, shows it’s not just African countries that are enjoying Nollywood films and TV series.
France-based Canal+ Group has acquired Nollywood broadcaster and production studio ROK for an undisclosed sum as part of a move to boost its local production in Africa.
The deal was struck with ROK’s Nigeria-based parent company Iroko, which has exited the production and broadcast subsidiary while retaining full ownership of Francophone African SVoD platform Iroko+, which was previously a joint venture with Canal+.
ROK claims to reach some 15 million pay TV subscribers across the DSTV and GOTV platforms in Africa with its ROK channels and has so far produced over 540 movies and 25 original TV series, making it one of the most prolific production houses in Nollywood.
Under Canal+’s ownership, ROK will produce “thousands more hours of Nollywood content to deliver movies and original TV series” for Canal+’s audiences in French-speaking Africa, according to the French firm. The acquisition also includes ROK’s linear pay channels.
Iroko, which also owns and operates the Iroko SVoD app across Anglophone Africa and around the world, launched ROK in 2013 to produce content for its various platforms. Canal+ Group will continue to collaborate with Iroko, with non-exclusive content distribution of ROK content via Iroko’s SVoD app.
As part of the deal with Canal+, ROK founder Mary Njoku – who is married to Iroko founder and CEO Jason Njoku – will continue as director general of ROK Productions SAS, and retain a shareholding in the company.
“ROK has captured the imagination of millions of movie fans and they have truly supported us as we’ve grown the company to celebrate and enjoy our African culture,” she said.
“I’m excited to be taking our platform on the next stage of its journey with Canal+ Group, which shares our passion for creating original content and supporting new talent, and together we have ambitious plans for the future.”
Jacques du Puy, CEO of Canal+ International, added: “Through this acquisition, Canal+ Group is very happy to develop and enhance the catalogue of Nollywood content and expand the ROK brand inside and outside the African continent.”