iROKO Announces $19m Content & Capital Deals

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iROKO today announced multiple deals totaling $19 million both in content development and in capital funding. French media giant CANAL+, together with existing investor Kinnevik AB, are investing in addition to iROKO’s own cash flow to give the leading African tech & entertainment company the platform to scale its operations and expand aggressively across the continent.

iROKO will channel the investment into local content financing and production, as well as its product and engineering teams in Lagos and New York. The ambition is to produce at least 300 hours of original content in 2016, with the expectation of doubling that by 2018. This will enable the company to build on its already extensive catalogue, making it arguably one of the largest libraries of local African content. The announcement also sees Jacques du Puy, President of Canal+ Overseas, join the iROKO board.

Jason Njoku, CEO and Co-founder of iROKO says: “With millions more Africans poised to come online via mobile in the coming years, our mission is to lead viewers to content they’ll love.This is something the vast majority of the continent struggles with today. We hope to bridge that divide, and this additional investment supports such a plan. For us, there is no version of reality where the marriage between Africa’s most powerful communication tool [mobile]and the most prolific and loved entertainment provider [Nollywood] won’t be a joyous union.”

Mobile phone subscriptions in Africa are almost at 1 billion and by 2019, it is predicted that smartphone handsets, with which viewers can watch content, will make up 73% of the continent’s devices.

Njoku adds: “The challenges surrounding mobile TV in Africa are mighty, but not insurmountable. It’s human to be entertained and connect over community and we are obsessed with creating Africa’s largest community around local content. We have always been crazily bold in our ambitions to bring the content closer to viewers and build a truly frictionless and inclusive entertainment experience. Today’s news improves those odds.”

Fabrice Faux, CFO of Canal+ Overseas says: “We congratulate Jason and all the iROKO team and investors for their outstanding achievement so far and we are proud to partner for the scale-up in French-Speaking Africa, with clear ambitions and the means to reach them.”

Nollywood [Nigerian Hollywood] is the world’s second largest film industry in terms of output, employs ~one million people and constitutes 1.04% of the Nigeria’s GDP. iROKO, the home of Nollywood, has previously raised $25m from international investors, including Tiger Global, Kinnevik and RISE Capital. The technology and entertainment company is a leading Nollywood film, TV, content producer and platform provider and currently has a mobile app for Africa, holds distribution deals with Canal+, BA, Emirates, Nollywood TV and Lebara and has two Linear TV channels on Africa’s Star Times.

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Today na Africans in Diaspora, Tommorrow na “Africa is the future” then next tommorrow “Africans no dey use Internet” then fire all the Africans to go back to Africans in Diaspora then Next Week na “Internet is about to explode in Africa”. Abeg leave trash for LAWMA…

Reading in between the lines - Canal+ just bought itself a very cheap production house for African content with a free seat on the board to safe guard it’s investments. I am sure Tunde Kelani and Kinglsey Ogoro would not have accepted the peanuts at the cost of their creative freedom. Nothing new and exciting here, same old story…

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People that see, will see, they are investing. $19M… That’s a whole lot to do a lot.

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THey are on fire right now! KUDOS

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*its
*Kingsley

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I rather respect the fact that he is surviving, that trash u won leave for LAWMA is business and its not beans.

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You call $19m peanuts? It’s like Trump saying he burrowed a small loan of $1m. And how will the funding affect anyone’s creative freedom?

But I digress.

I hope with this Iroko can concentrate more on content delivery through mobile. The way they’ve talked about mobile in that article, you’d think they are as strong on mobile. But I still cant access Iroko via the AppStore. I still watch more Nollywood movies on YouTube than I do via the Iroko platforms just because it’s easier for me to access YouTube on my mobile.

And for the 300 hours of original content production. I think that’s too much content for that budget. Maybe they have more, I wouldn’t know, I’m not sure they do. But with the real quality content movies costing about $1m and more, I don’t know how they can come up with 300 hours of those.

But Goodluck to Jason and co, it’s a nice way to start the year.

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I’m curious about the share structure at this point, and how much has been cashed out by the founders

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I guess you answered your own original question yourself. It’s definitely peanuts if you want to rival the likes of House of Cards, Top Gear and Beast of No Nation especially if you are now IPO deluded.

We are no longer a startup. We are defining the future of Nollywood. We hope for the better. Looking forward to 2020, I know the world will change. I am aware that the elephants have entered the field. In this case, we are retreating to our core. Focusing on the things only iROKO can do in Nigeria, in Nollywood, at scale, then extending that and bringing content our viewers globally love closer to them.

I will let another person decipher the delusion before una think say I get bad belle…

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This is basically an unwritten way of saying that iroko has been sold to a media conglomerate. It buys canal plus not only a back catalog of content to distribute to its market but also fresh funds for another 300 latest movies. It gives them the opportunity to understand the industry for licensing of Nigerian movie content.

The media tie up was the smart thing for iroko to do especially given the capital intensive nature of the business. It has bought them time to experiment with their mobile strategy and leverage to partner with the big telcos.

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I repeat, $19m is not peanuts. Never said it’s a lot, but Peanuts? C’mon. Tunde Kelani et al have been making good movies before Ms of Dollars, it’s not impossible to create quality contents with the cash.

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Which part did you not understand? . They are now part of vivendi a media conglomerate. They have got themselves breathing space and a nice fat exit payout.

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Most people don’t watch this “real quality content” like Fifty or GidiUp. Most people watch " Mr Ibu the lecturer " which cannot possibly cost $1 million to produce

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That’s valid. I just feel it’s possible to enjoy the best of both worlds. Especially now that we are delivering these content beyond the shores of our Nation. Movies like Phone Swap and 30 Days in ATL show it’s possible.

Fifty is one nice movie btw.

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Oga, Na you talk say teacher’s pant is White. I no sabi how you take see am. From what I read, there was nothing about an acquisition, merger or an exit…

What I read was another forceful change in direction dictated by $19m bailout package which makes me wonder which of the many “cores” that they retreating back to…

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Nothing was said about an acquisition but here is the deal. Canal Plus wants to grow PayTV in Africa where it has around 1.5 million subscribers which contributes a significant part of its earnings. PayTV is all about content. Iroko offered easy and cheap access to Nollywood content. Its investment prices the 4000 videos in iroko’s libraries at less than $40 million or roughly around $10,000 each. It prices the $7 million meant to produce 300 hours of film at $25,000 each (assuming a video runs roughly one hour. That is about as cheap as it gets to get engaging content like Nollywood to distribute to its subscribers.

Meanwhile, for Iroko it means a tie up with a major media player. Now they can compete with the likes of Multichoice and have backing to partner with the telcos on distribution of content.

For the industry,for too long it was a one-sided show with DSTV monopolizing formal Nigerian movie content distribution often paying as low as $1,000 per nollywood film on its famous Africa Magic channel. With Canal Plus, Star Times I expect producers will be far more smarter about licensing deals to content distributors and will also be able to tap finance far more easily to make quality films or TV shows.

For Iroko this is the exit they and their investors wanted.

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According to the TechCrunch publication, only $7M is earmarked for content development deals.

Even Canal+ would agree that $7m wont buy them a lifetime of content. Besides they already have a lively interest in acquiring the whole company, according to Jason, of which he is quite excited about. So I really don’t know what the nitpicking is all about.

Tola, you really don’t have to live up to your reputation on every post.

It’s getting personal!

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Dude, don’t worry, you won’t be the first nor the last to get personal. We live in a democratic society - you talk your own and I will talk my own and let the passerbys come to thier own conclusions. No hard feelings…

Unfortunately in this particular scenario, you can spin the numbers which way you wish but we all know Canal+ bagged a bargain for next to nothing…

Canal = A board seat + $12M equity + $7M exclusive content

You have to remember that Canal is not a Nigerian Goverment Contract, so $7M worth of exclusive content must really worth $7M in sweat and blood!

As at the time of raising the “new” deal of $12M equity was Iroko valued at $120M ? Abeg lets do the maths…

So you can see that I was not nitpicking but just following normal common sense as I am too stupid to follow complex magical mathematics?

So my guy, I am not living up to any reputation just stating the obvious fact. As its a free world, you don’t have to agree with me…

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Like I said its getting personal

I was actually talking about you.

Your spare no-BS stance on nearly every post, is beginning to lose Objectivity.

This is a great deal for both companies. Yes, there maybe, very FAT maybe, that some details may not be as rosy as painted but all in all these is good news for Iroko, the local start up scene and Nollywood.

This is honestly not one of those cases where you cry foul and doom, Check am!

You are simply replaying figures we are all aware of so except you have a copy of the deal made btw both companies then all na speculation!

Worst case is, Iroko maybe headed towards an ‘early’ exit. My brother leave talk, we need more headliners like Iroko.

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That kind of makes it not personal per se. I was interestingly thinking along the same line when I read the original post but then, I would rather not speak to what isn’t in my domain as such. Considering iROKO’s past rounds and the recent restructuring, this doesn’t seem much like progress. However, when you look at it in light of what everyone sees as the new challenger in the market, it becomes interesting to know they are still getting investor airtime and as such, not weird that popular opinion thinks this is good news.

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