HAPPY FRIDAY AND HAPPY TWO YEAR ANNIVERSARY TO AML! WE MADE IT THIS FAR AND I AM STOKED. It’s worth all the sleepless nights, really. When I began this journey with you all, there was no music law blog focused on Africa’s music industry. Now we have two that have sprouted. I pray to see even more. I think it is great and healthy and that is the whole point of AML. Push the “law message” if you will across Africa, one country at a time, starting with Nigeria. Second, when we began this journey together, artists were really uneducated about the business of music and music law. That has really changed, especially among the influencers in the industry who are regular readers of AML. Many have written to tell me how AML has made a difference in their deal making and helping them to avoid legal drama.
On the USA end, AML has attracted prominent names in the industry who have sought out (my) help to try to resolve their issues. I am grateful. What’s next? You all are next. I am inviting you to be guest authors as I believe this is and should be a community effort in educating the industry at large. The caliber of AML readers and the experience and knowledge they have is simply stunning. I want you all to not be selfish and share. Do not sit on the sidelines and receive or complain. Share knowledge and make a difference. For attorneys, especially, please just be sure to fact check and provide your legal citations/sources when quoting Nigerian/Ghanaian/Kenyan etc. law. It just makes sure I can (easily edit/fact check so we can) provide the most accurate information to our community. (Email me at (africamusiclaw@gmail.com))
Happy Anniversary to you all. May your businesses and music career pursuits flourish and may you always lift the young ones, even as you climb higher on that ladder.
Okeedokee. Let’s talk about the case today on this post. Should IROKO’s Investors be worried as Google has just launched a You Tube Partnership program in Nigeria, Ghana and other markets? I think they should.
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Over the weekend, in a closed group I belong to where brilliant minds love to rub (or have mind rubbing contact sports), often, the founder of DECODED, Julius E Sea, Jr. shared the news of his new blog and his first post. His first post was to paraphrase it, ‘If I was the CEO of IROKO.’ Julius said he saw Jason Njoku’s news that Jason was “following his users” and was following them offline to physical distribution of DVDs on the continent. He thought that was not a good move and that Jason should instead focus on expanding his reach among the African diaspora. His article was brilliant and raised some excellent points. I agreed with the points raised but disagreed that Jason should be spending his money trying to expand his reach among the African diaspora at this point. My reasons are listed below but be sure to read Julius’ article here to get the nitty gritty details of the points he raises. In any event, Jason read the piece (Jason is also part of this closed group) and he agreed with what Julius said and even mentioned that he had considered and was considering some of the tips Julius gave.
I said, okay. No wahala. Wished them well. LOL! Jason even if he agreed with me will not share publicly but hey no problem. In any event, I got vindicated my people o. A fellow group member shared a few days later that Google had announced a launch of its You Tube Partnership program in Nigeria, Ghana and other African markets.
I will try to keep this very short as possible. THIS IS MAJOR NEWS AND SHOULD HAVE ANY CONTENT DISTRIBUTOR OF NOLLYWOOD FILMS OR MUSIC WORRIED.
Who should be worried? The likes of IROKO, IBAKA, IROKOING, PANA TV, BATTA BOX AND SO MANY MORE.
Why?
Let me illustrate with an example.
First, You Tube Partnership program means you the artist or filmmaker can create your own content, bypass Alaba market, bypass IROKO, IROKING, DOBOX and all distributors and directly upload your content to your customers. You Tube will literally calculate your check, give you 50% and keep 50% of it. (I discussed this in the past and Jason responded here on AML that you in Nigeria and across Africa could not do it because of technology infrastructure. Well Google just made it easy. They will pay you money for you to distribute your own content by yourself with them. IROKO houses primarily music videos now on You Tube.) Now illustration.
EXAMPLE
Stephanie Okereke-Linus (disclaimer I have worked with her in the past and she is a friend) has over 600,000 Facebook fans and thousand more followers on Twitter. Omotola has over a million facebook fans. If Stephanie creates her films, ‘Through the Glass,’ ‘Dry’ etc. why would she go to IROKO or any other online distributor? Why would she sign an EXCLUSIVE distribution deal which IROKO is known for having many sign in the music and film industry? Why would she also split her money 40-60 or 70-30 in favor of iROKO?
The IROKO platform, no disrespect to Jason, sucks. The user experience is uncomfortable because the ads are constantly on and you just don’t enjoy it. Stephanie likes to spoil her fans, she has the numbers and power and she can easily put up her own movie on You Tube in Nigeria, Ghana etc. and get paid directly from You Tube. Given her star power, she can make a cool million just like IROKO has done, directly from You Tube. She doesn’t have to be as stressed out about pirates because she can regulate distribution of her content online. She doesn’t have to undertake the major costs of cinematic distribution. She can distribute through You Tube in many African markets that IROKO is yet to reach and make her money. The same analysis goes for Ini Edo, Rita Dominic, even folks like Lancelot Imasuen, Shirley Frimpong Manso (Ghana) and many more. We just easily eliminate IROKO because IROKO can no longer make the case for why we should give them our content, unless IROKO comes with its physical distribution game plan. I think Jason saw this writing on the wall.
The above example can be applied in the music scene too, whether you are P-Square, The actual marketers in Alaba or just ThatIgboChick uploading a makeup video. You Tube will give free training and educate many including marketers on how to do this and other content providers.
So, it is a new day and season. I don’t want this post to be long but it is. YOU CAN STOP READING HERE or read below why I said it made sense for IROKO to look at physical distribution of DVDs in Nigeria (and across Africa) as an option.
Check out the official google announcement here. Check out how you can be a You Tube Partner in Nigeria, Ghana etc. here.
Have a great weekend, stay blessed and rub minds in the comment section. I like to learn, be intellectually challenged and grow. So abegi, rub minds.
Cheers,
Uduak
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Read Julius’ article here.
See my response below:
“Julius E. Sea Jr, I agree with your statements, overall, but believe, the route Jason is taking makes both logical and economic sense and trumps the route you suggest, unless you are suggesting both can co-exist. Here is why (lengthy but I just had to break it down)
MARKETING
We both agree that there is still a large untapped market in the diaspora who know nothing about IROKO. I think a big part of that untapped market are persons our parents age and above. I would venture to say 55 and above. I would also say the other group is 2nd-3rd generation Africans 18-25. Now, how will Jason capture the attention of our parents here in the diaspora who have no interest in sitting in front of the computer to watch their movies? I think it would be through those back home. The diaspora already sends aid to Africa that far exceeds the aid the US offers. The diaspora is also making Jason successful primarily through a first generation demographic that feel the need to connect to our homeland with our families, childhood friends etc. If those at home in Nigeria are not talking about IROKO, guess what, our parents will not be talking about IROKO.
Our parents still want stockfish, egusi sent to them when their friends travel home etc. We instead want music and films when our friends travel.
For the second and third generation Africans, I find many are the least interested, in my experience, to sit and watch our films. They’d rather kick it and worse claim not to even be ‘African.’ If Jason wants to reach them, then he needs to spend even more money and also find a way to get the first generation to increase the word of mouth. The only problem is kids at that age do not necessarily want to hang out with their moms or dads watching African films. This means he has to reach their non-African friends to get to them. Are the non-African friends of second generation Africans going to want to watch African films when their African friends are not? Maybe but I doubt it. So, from a marketing standpoint, it makes no sense for Jason to continue to concede the Nigerian market to his competitors when he can easily capture all Africans, across demographics, on the continent.
I really would love to see the numbers in terms of operational costs for IROKO and I am pretty convinced and sure that if IROKO kept up with the way it was going, it would have become extinct faster than it started. Why? Operational costs. 1) Jason is operating primarily from Nigeria and he has made it clear the exorbitant amount it costs to do so. He need not tell us this. His cost if he operated from the UK or US would be half what he spends, according to his many statements on this issue; 2) Jason boasts of numerous employees hired in UK, US, Nigeria and I don’t know what other offices he has employees. What he does not say is that it costs a lot of money. IROKO was growing too fast and to me needed to cut spending and not spend so much on operational costs; 3) the travels both for top IROKO executives and Jason adds up as well; 4) the third party marketing experts all added up as well; and 5) the cost of building and maintaining the technology infrastructure is exorbitant as well.
Jason now has numerous competitors both on the continent and in the diaspora. They include PANA TV, IBAKA, AFRINOLLY etc. He, in my view, needed to come up with a different game plan for the brand.
LEGAL LIABILITY & PERSONAL COSTS
I have been approached on numerous occasions to sue IROKO for alleged copyright infringement. What’s prevented such move has been jurisdictional issues i.e. the alleged injury occurs in Nigeria and I am not a licensed attorney in Nigeria. However, make no mistake about it, where it occurs on my turf and a client approached, it’s a no brainer. I am sure I am not the only US trial lawyer that would sue IROKO for Millions if a client of ours walked into our offices and gave us a great case evidencing infringement. Suing includes an aggressive move to shut down operations, at least for a few days, where the infringed material was on IROKO’s website, social media pages et al. because my/our clients would be having irreparable damage by virtue of a court permitting the infringing material to continue to stay on. Litigation costs money, stress and damage to reputation, at leats for a little while.
Jason operates on three continents and all three have regulations that hinder the smooth operations of business and also require tax payments. The easiest, however, of such a jurisdiction to operate from is Nigeria. Jason can focus on his business operations there but need not worry too much, although arguably he should, about the legal war fare that would or could be filed against IROKO.
The more exposed his business is in the USA/UK/Europe and the more he builds a global brand that makes him a deep pocket target, the higher the probability of fighting a legal battle. The lawsuits are inevitable when you operate and become that large on Western soil. It just is what it is.
On the personal cost, Jason is now a father. I know what it is like to live in hotels and airplanes and have family and close friends who have and continue to. It takes a toil on health and affects the psyche after a while. That stuff gets old and is just no way to be the best CEO you can be and even more importantly, the best father/spouse. So, as a way of jara, going the DVD physical distribution route should keep him closer to the home front which should be good for his health and psyche.
AFRICA AS THE NEXT FRONTIER
I’ll wrap it up by saying this: a) from all accounts, the next frontier when it comes to business, wealth etc. is Africa. The buzz is so much you have investors falling all over themselves to get a piece of that African pie. Goldman Sachs, McKinsey, and even the western fashion industry has acknowledged and are repositioning themselves to take advantage of this wealth “reawakening.” The likes of Jason and many of our closest friends and acquaintances have relocated back to Nigeria and other parts of Africa, precisely to capitalize on these opportunities. There is so much money to be made on the continent. We have seen an increase in African films, award shows, reality tv and the whole entertainment industry. However, distribution is yet to be sorted out. If Jason can take what already exist and enhance it, I think it will not only be significant from an economic standpoint, but also from a psychological and global standpoint for Africans. I also agree with you that it would also make it easier to move that huge customer base offline, online as Africa’s technology infrastructure improves. . .”
Great article. I have been saying this all along that Iroko is flawed. Once Youtube breaks into the African market, He's doomed.
@Benny, I don't know that IROKO is "doomed" if YouTube breaks into the African market. If IROKO goes in the direction Jason announced some months ago, which serves as the underlying premise of my article, then I think he could remain relevant. Also, unless something changes, IROKO still has an existing relationship with YouTube via their music videos and Nollywood film trailers. If they can build the physical distribution of DVDs, continue the existing digital distribution of movie, and continue to liason with strategic partnership on the music end of things i.e. deal with South African mobile technology companies et al. they signed with, they may be able to stay competitive. Julius had argued for a focus on the diasporan market. I disagreed. For IROKO's competitors, now they may have a harder time staying afloat once Google unleashes its marketing machine on the continent. Time will tell with all of these moves. So far, no lawsuits stemming out of all of these unfeterred deal making by content providers on the continent. I am looking forward to awon boyz crossing paths with inevitable legal drama. Let's wait and see.
Well said. I just feel records labels are going to start waking and looking are some of their agreements with IROKO and reconsider doing things themselves with regards to the music video content. You are starting to see a few already go down that road.
Did Youtube break netflix?
@Bunmi, Netflix and Youtube are two different things.
@Bunmi – Thanks for your comment. I don't see the relevance to my overall premise and discussion. Nevertheless, I'll indulge:
a) What has Netflix (beyond IROKO being hyped by the media as "Africa's Netflix") got to do with Google which just raked in $50billion in revenue last year, entering Africa through its YouTube Partnership program; and as a result being a potential/strong threat to IROKO and other Nollywood content providers? The core premise and point of my article?
b) Also, could you share the last time Netflix signed licensing agreements with artists and filmmakers and uses and continues to use YouTube as the platform exclusively for the music videos of it artists?
c) By the way, do you know or can you explain IROKO's licensing scheme as to performing rights organizations for many of the content provided on its platforms of which some of these content providers do not have song copyright clearances?
d) What percentage of income does Netflix generate from You Tube?
e) what is IROKO's percentage?
f) Finally, I have a question for the actual content being licensed but I'll save that for if it becomes necessary to even pose the question. For now, can you explain why you think You Tube launching its Partnership program to content providers that directly also provide content to IROKO, who also houses some of this content on YouTube, is not a threat to IROKO?
I'd like to see your reasoning on the above questions. Please indulge.
Thanks,
Uduak