Media organisations in Nigeria make efforts to adapt to a shift towards online consumption

In late August 2016 Mark Zuckerberg, founder and CEO of Facebook, spent two days in Nigeria, where he met with key participants from the nation’s burgeoning ICT industry. Zuckerberg’s visit, the details of which were not made public until midway through his two-day stay, was widely taken to be a clear indication of Nigeria’s rapidly rising importance as a centre for technology development and investment in Africa. Indeed, over the past five years, the nation’s ICT industry has expanded quickly, driven largely by an increase in the uptake of technology across the 184m-strong population. This has in turn contributed to rising demand for indigenous digital products, services and content. Nigeria’s media industry, which kept a close eye on Zuckerberg’s visit, has been a key player in this shift, albeit not always voluntarily.

Digital Influence 

As in many other markets, in recent years Nigeria’s news outlets, broadcast entities, print publications, and film and music industries have faced the rising tide of digital media distribution in different ways, and with varying degrees of accommodation. As of mid-2016, however, digital technology had gained a strong and rapidly expanding foothold in Nigeria, to the point that many media consumers have begun to take it for granted. “It is clear that consumers see no significant divide between digital and traditional media,” Vicki Myburgh, entertainment and media leader at PwC South Africa, told local media in September 2015. “What they want is more flexibility, freedom and convenience in when, where and how they interact with their preferred content.”

Setting The Scene 

The steady shift from traditional to digital media has taken place against a backdrop of rapid technological change over the past 15 years, and it is hard to overstate the impact of ICT on the economy and population. Perhaps the most important shift has been the rapid increase in mobile telecoms subscribers. Of the roughly 151m internet users recorded the end of 2015 – representing 82% of the population, according to data collected by the Nigerian telecoms regulator, the National Communications Commission (NCC), and the World Bank – the bulk of these, or more than 99% according to NCC data, subscribed to mobile (as opposed to fixed-line) services. These offerings have expanded rapidly since the mid-2000s. From 2007 to 2010 alone, the number of active GSM mobile subscriptions more than doubled. Four operators dominate the mobile telecoms segment, namely MTN, a South African firm and Nigeria’s largest telecoms operator by subscribers; local player Globacom; India’s Bharti Airtel; and the UAE-headquartered Etisalat.

Mobile Data 

Along with the sheer pace of growth of overall telecoms usage, in recent years Nigeria has seen a steady increase in the use of mobile data. As of early 2016 each of the four mobile operators offered 3G data services across a broad swathe of the country, and had either recently or were in the process of rolling out 4G LTE networks, which are expected to be standard across Nigeria within the next few years. The government has worked to assist the effort to boost mobile data penetration, carrying out a series of wireless spectrum auctions in recent years and working alongside TV broadcasters to complete a shift from analogue to digital standards, with the objective of clearing more spectrum for use by the telecoms industry. At the same time, fixed broadband services have also become an important growth area, with internet service providers, mobile telecoms operators and the government alike investing heavily in fibre-optic network expansion and upgrade projects (see Telecoms & IT chapter).

However, the bulk of Nigeria’s internet users access the web via mobile devices. Data from the NCC reveals that as of early 2016 nearly 94m Nigerians regularly accessed the internet on mobile devices. Similarly, according to We Are Social, a UK-headquartered digital media agency, upwards of 80% of all web pages in 2015 were opened by browsers operating on mobile handsets. Furthermore, the number of active mobile data subscribers in Nigeria more than tripled between 2012 and 2015, with this rapid pace of development expected to continue.

Towards A Digital Model

The rise of digital technology in general across Nigeria over the past decade has mirrored a closely related expansion in media consumption in the nation. Indeed, according to a report published in late 2015 by PwC, over the course of 2014 the nation’s entertainment and media market reported year-on-year (y-o-y) media spending growth of more than 19%, down slightly from 23.1% y-o-y growth in 2013, but up on expansion of 17.1% and 14.1% in 2012 and 2011, respectively. These double-digit figures correspond neatly with the rapid expansion of internet availability and usage in recent years. Indeed, according to PwC’s report, “internet access will be the main contributor to [media] market expansion” until at least 2019.

Media organisations of all kinds have had to work to keep up with this rapidly changing environment, moving their operations and content online themselves, or partnering with local or international ICT firms to facilitate digital distribution. These efforts have resulted in major shifts, both in the way local media is consumed and in terms of the economics of the media business in Nigeria. Traditionally, Nigerian media of all kinds has been distributed via hard copy formats. However, the country’s large population, the biggest in Africa at 184m, has always been a hurdle to reaching out to a national audience. The move to digital allows access to much larger markets, with a newspaper now able to reach out to many more people at a much lower cost by posting articles on its website, for example. Similarly, the rise of digital streaming has the potential to revolutionise broadcast media in the country in the coming years.

Impediments 

The shift towards digital consumption has also brought with it a handful of key challenges. For example, media firms have struggled to effectively monetise their digital media products, and while ICT usage has expanded rapidly, this has not taken place uniformly across Nigeria. Many populations in remote rural areas continue to lack access to high-quality connectivity, both in terms of mobile 3G data and fixed services. To date, 4G LTE has only been introduced on a relatively small scale, primarily in Lagos, the largest city, and the capital, Abuja. Lastly, digital media piracy is a major problem, and one the industry is currently working to address.

Pushing Ahead 

While Nigeria’s network capacity and speed continues to lag behind many other more developed markets around the world, a number of local players have moved forward with digital media distribution plans. For instance, Iroko Partners, a Lagos-based digital media firm that was established in 2010, has spent the past six years acquiring the rights to a large library of African – primarily Nigerian – music and films. The company sells online subscriptions to customers, who gain streaming access to the entire library, in a model that is nearly identical to US and European digital media content streaming sites like Netflix, Spotify and the now defunct Rdio. In January 2016 Iroko announced that it had secured around $19m in funding from multiple sources, including the French media conglomerate Canal+ and Kinnevik, a Swedish investment company that already held shares in Iroko. The new round of financing is expected to go towards Iroko’s burgeoning production activities, which the firm expects will be a major part of its business in the coming years. “Iroko will channel the investment into local content financing and production, as well as its product and engineering teams in Lagos and New York,” Jason Njoku, Iroko’s CEO, said in a statement announcing the funding. “The ambition is to produce at least 300 hours of original content in 2016, with the expectation of doubling that by 2018.”

Most of the major newspapers have made a concerted effort to build up their digital presence as well. Vanguard, a daily paper with national reach, is the most visited news media website in Nigeria, according to data from the web analytics firm Alexa, followed by Punch, This Day, and Sun News. Similarly, while terrestrial radio has long been a popular format, many of the nation’s largest radio stations have begun broadcasting some or all of their content online, with the objective of expanding their domestic audience and also reaching the Nigerian diaspora.

As connectivity continues to improve, a growing percentage of media output from all segments of the industry will likely find its way online. “Mobile phone subscriptions in Africa are almost at 1bn, 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 said in his early 2016 statement. “The challenges surrounding mobile TV in Africa are mighty, but not insurmountable.”