Online movie streaming platform IrokoTV is set to layoff 150 of its staff.
The company’s chief executive officer Jason Njoku disclosed this in an article published on his website that the move was necessitated by the devaluation of the naira; the effects of which the company has been suffering since 2016.
According to Njoku, the devaluation dropped the platform’s subscription costs from N3,000 ($18) in 2015 to N3,000 ($8.33) by 2017.
Currently, subscription to the platform costs $6.3 with a dollar equivalent to N477.
Njoku said amid the gloom in its African market, the company is experiencing growth internationally with the average revenue per user in the west between $25 and $30.
“Our annual ARPU internationally is $25-30. When people talk to me about Netflix and their impact globally, and then in Africa, I always smile. My response is the same. Globally, streaming media is booming. In Africa, it is regressing. It’s impacting everyone,” he said.
Njoku further said the amended broadcasting code by the National Broadcasting Commission (NBC) has “had a massive impact on the decision to discontinue investing” in Nigeria.
Part of the newly amended code mandates sub-licensing of hitherto exclusive content.
“Between the COVID-19 fallout, rapidly devaluing the currency and hostile regulatory environment, it’s time to pause the burn. It’s time to hunker down and see what the next 18 months bring,” he said.
“Over the next week, IROKO will be defocusing our Africa growth efforts and we will revert to focusing on higher ARPU customers in North America and Western Europe.
“Even after pushing incredibly hard in Africa for the last 5 years, our international business represents 80% of our revenue today, so by taking out Africa growth-related costs, we cut our $300k/month burn to <$50k/month.
“This will, unfortunately, lead to a pretty dramatic change in the size of our Africa teams. There will be around 150 job losses.
“We are still working on the numbers, and in order to soften the blow, we are speaking with a number of companies who have taken an interest in our highly trained telesales agents.”