iROKOtv blames move on naira devaluation, tough regulation, COVID-19
Africa’s pioneer Video on Demand platform iROKOtv will cut no fewer than 150 jobs in Nigeria on the back of COVID-19 impact, Naira devaluation and hostile regulatory environment.
In a post on Friday titled: “Resizing Iroko“, the founder Jason Njoku lamented the negative impact of coronavirus which drowned consumer confidence and forced subscribers to prioritise other essentials over entertainment thereby hurting productions and ultimately subscription revenue.
But beyond the hit from coronavirus, Mr. Njoku blamed a greater impact on the recent round of currency devaluation in Nigeria which posed a new dilemma – to either increase prices and make their services less affordable or keep prices where they are but unprofitable and unsustainable.
He wrote: “Then the new round of devaluations started. In 2015, we introduced the N3,000 annual plan. It was affordable and an instant hit. It supported our invest in Africa growth ambitions and was priced close to perfection for our user base. It was readily taken up by hundreds of thousands of people across West Africa.
“Back then N3,000 = $18 (166/$). We went through the brutal 2016-17 devaluations and ended up N3,000 = $8.33 (360/$). A nightmare by all means, as we just lost real value. Like, tangible pay some bills costs. Today N3,000 = $6.3 (477/$).
“All indications are that the Naira devaluation hasn’t really finished. Some are saying it’s just starting and will end up at 550-600/$ before year’s end. What we are seeing now is distorted as the access to FX has been cut off for almost 6 months. A lot of our costs are in dollars – AWS, tech tools etc.”
Another reason for the resizing move, according to the tech entrepreneur, was the new policy by the Nigeria Broadcasting Commission, which outlawed content exclusivity.
He said: “When the entire industry is buckling under the destruction of non-stimuli COVID-19, the rhetoric out of Abuja was not only ill-informed but just wrong and shows why the NBC DG needs to resign. He (and his entire team) don’t seem to even understand the industry they are regulating, let alone the nuances of how to grow it.”
Iroko, he said, will be focusing on international business which represents 80 per cent of its revenue.
“We still believe in Nigeria, We still believe Ghana, We still believe in Africa. It’s a strange thing to realise that even after almost 9 years with IROKOtv, 5 exclusively focused in Africa, we still may be too early for Africa,” he lamented.