When Ericsson ConsumerLab carried out a research on TV and Media in Nigeria, it found out very interesting statistics: TV remains the single most popular platform for TV and video consumption in Nigeria, but 51 percent of consumers would rather choose when they watch TV and video content rather than follow a set schedule. It was also discovered that only 37 percent are satisfied with the choice and variety of available content. Consumers prefer to choose and pay for the channels they want, not having to choose among bouquets of channels as offered by current pay TV service providers.
The statistics showed a business opportunity which is still sparsely exploited. What if consumers can choose what they want to watch and pay a ridiculously low fee for such freedom? The early exploiters of the space such as Iroko TV earned over N1 billion from about 500,000 subscribers in Nigeria at N2,000 yearly Average Revenue Per User in 2014. But the market seems too small as only 27 percent of Nigerian consumers stream videos more than weekly, compared with the global average of 76 percent. Ericsson sees this as no problem, as it estimates that by the end of 2015, Nigerians would have spent about N54 billion ($271 million) on video-on-demand streaming. Only N2 billion ($10 million)was estimated to have been spent in 2014.
To tap into this massive growth, Ericsson has acted on the firsthand information it research afforded it by setting up its first end-to-end subscription video-on-demand content service, NuVu. The service will allow subscribers access to around 3,000 local and international TV and film titles for a small monthly fee (The current vod providers charge between N150-N200 per month ($0.8 – $1 per month)).
There also remains a challenge which Ericsson discovered in its research: connectivity issues and restrictive data charges on mobile data are factors affecting the online streaming experience of consumers. To solve this, NuVu subscribers will be able to download content directly to their smartphones or tablets at no additional data cost during off-peak network times, and access the content offline for up to 30 days after downloading. Ericsson is marketing NuVu in close collaboration with Airtel, a telecommunications company whose focus on providing quality data access has improved in recent years, with data revenue growth the result of better access. Airtel’s over 30 million subscribers in Nigeria will have access to NuVu in the first quarter of next year.
As Ericsson spreads its new service throughout Africa, it plans to market it in collaboration with service providers. Its target partners will be mobile telephony/data service providers due to the rate of growth of mobile adoption on the continent.
“As one of the largest operators across Africa and the third-largest mobile operator in the world, Airtel is the perfect partner to help us launch NuVu. We are very proud to launch NuVu in Africa and we look forward to rolling out this service to other markets over the coming year,” Thorsten Sauer, Head of Broadcast and Media Services, Ericsson, said as the vod service launched in November.
The growth of VoD services is expected to continue in 2016 as data offerings improve and more content gets online. Although TV is still the most popular platform for TV and video consumption in Nigeria, it is just a matter of time before it starts having to play catch up to VoD.