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Story highlights
- Local streaming services scale up as Netflix moves into Africa
- iROKO boss Jason Njoku believes Nollywood and mobile will protect his business
(CNN)When Netflix announced its launch in Africa earlier this year, many assumed the $30 billion streaming juggernaut would steamroller local competitors on its path to global domination.
To the doomsayers, prospects appeared particularly bleak for the "Netflix of Africa" -- iROKO, the Nigerian streaming platform which is currently the largest on the continent.
"Netflix is here to eat the food from the bowls of my children," lamented iROKO founder Jason Njoku in a blogpost shortly after the announcement.
But his sentiment was firmly tongue-in-cheek. The company was about to make its own ambitious statement.
On January 25, iROKO announced $19 million of new funding from heavyweight international investors, including French TV network Canal+, to "scale its operations and expand aggressively across the continent."
Home advantage
Njoku was born and educated in the UK, but his understanding of Nigerian conditions and culture has been key to building one of the nation's most successful start-ups.
The entrepreneur recognized that despite the enormous popularity of Nigeria's "Nollywood" film industry -- the world's second largest by volume -- no major distribution network existed.
From 2010, Njoku began pursuing small-time producers across the country, securing the rights to thousands of titles. He cataloged them first on YouTube channels, and then iROKO platforms.
The entrepreneur recalls facing constant crises; from battles with pirates, to angry producers, to having his Google services suspended.
But the audience has grown rapidly -- iRoko racked up over 300 million video views in 2015. The company has also expanded, employing over 100 staff between offices in Lagos, London and New York.
Njoku believes in constant renewal, and the latest funding round will support tailoring the service to local needs.
"We have effectively discontinued desktop streaming," says the 35-year-old. "Holding a 3G signal for long periods in Sub-Saharan Africa is almost impossible."
iROKO are transitioning to a mobile-first strategy
Instead, the company will focus on the fast-growing mobile market -- Nigeria has the highest proportion of mobile Internet users in the world -- with packages to suit user budgets.
"The connected devices are overwhelmingly Android," says Njoku. "People typically use less than 500 megabytes a month, so we have to build a product that makes sense in that world."
Njoku is confident Netflix will be unable to match his company's subscription rates of $1.50 a month, and that the challenger will struggle to deliver quality streams with Nigerian connection speeds.
Patriotic pride
Beyond prices and devices, Njoku feels his greatest advantage is the exclusive library of "Nollywood" content, which has a fiercely loyal following.
"If you look at Nigerian TV there is Hollywood stuff available but people prefer Nollywood," he says. "It's similar to India where Bollywood is the over-index. Nigeria has Nollywood. Africa has Nollywood. That's the content of preference and I don't see that changing anytime soon."
The entrepreneur intends to maintain this edge by scaling up production of original content, with a target of 300 hours in 2016, including the glossy series "Husbands of Lagos."
Content will also be localized through the introduction of a translation feature for dubbing shows into new languages such as Swahili, Zulu and French -- all of which are spoken by huge populations on the continent.
Such advances have impressed international media giants, leading to new opportunities.
"Integrating popular content production and mobile SVOD (subscription video on demand) perfectly matches our group's entertainment vision in French-speaking Africa," said Jacques du Puy, president of Canal Plus Overseas, in announcing a partnership deal with iROKO.
Stream becomes flood
The arrival of Netflix is unlikely to harm iROKO, according to Sarah Lacy, technology journalist and editor of Pando.com, who has reported on the company since its early days.
"In general it's always better for the big global companies -- see Facebook vs. a million local social networks," says Lacy. "But new companies that are extremely differentiated will always do well. I'd put iROKO in this camp because they have a unique body of content."
Lacy suggests iROKO may also benefit from Netflix's arrival, as it could lead to improved digital infrastructure and faster connection speeds.
Such development could encourage an even more crowded marketplace. Streaming services such as Kenya's BuniTV and South Africa's Showmax are already planning to expand their reach.
As smartphone penetration continues to soar in the region, there will be growth opportunities for entertainment providers. But new arrivals will have to earn their share.
