Every business is affected by the pandemic and all entrepreneurs are finding ways to pivot and stay profitable even during this quarantine period. Tech RoundUp had a Zoom interview session with the brilliant tech entrepreneur, Ademola Ogundele, Founder and CEO of notjustokay.com. Below is the entertaining conversation. Enjoy!
TR: Tell us a little bit about how you started this journey and what you were hoping to achieve at the start of the platform that has now become a major aggregator for Nigerian and African music?
DO: I had always wanted to be an entrepreneur and I had done a few things of which I failed woefully at. I started the business as more of a hobby, it was initially more of a lifestyle blog, I was keeping records of the things I enjoy like music, books I read and things of that nature. But as time went on, it became a music site because out of everything I was posting, music seemed to be like what everybody was gravitating towards. Then one time I put a particular video up, one by 9ice which was recorded in the UK, the numbers just went like 10X. From then on, I just changed the whole thing to a music platform. That’s pretty much how we started, but even at that time, it was more of a passion project as I still had a 9 to 5. After work, I’d pretty much stay all night feeding people some good music. Obviously, to source the music, I had to reach out to a bunch of artists on social media at the time. We can equally get into that as time goes on.
TR: How did you craft the business model around what you were doing and how were you thinking about making money?
DO: In the beginning, it was just me posting everything. I installed accent on the system and was probably making two dollars a day but I didn’t pay attention to the money, to be honest, because I knew that at the end of day, I needed to grow the platform. If I grew it to a point where there was a significant amount of users, then I believe money will come in, so that stayed my main focus- growing the platform. My focus centred on how do I get more people on here, how do I get more users. How to get more artists to give content was also part of my plan.
TR: Educate us and our viewers what the revenue cost model was like at that time and how did you get artists to give you content and what other kind of value did you give them?
DO: For the artists at that time, the value we gave came at the point where we had a big diaspora audience, mostly in the US but even a lot of residential Nigerians were also on there, college students and more. NotJustOkay became a platform where anyone could come in to get music faster than they could get it on radio or anywhere else. With that, we started getting 800,000 to 1 million unique visitors a month. We didn’t even chase people or anything like that. Then we started getting calls from brands, folks would call us from South Africa, Kenya and so on because that’s where most of the multinational head offices were at that time and some of them used agencies in those countries. They would set up campaigns that they paid us ultimately. I think the first big cheque I got for a campaign was five thousand dollars. I was like, What! Five grand? That was that. It was huge for us at the time and then, I knew there is a business here. I partnered with an agency in Nigeria of which we split a very small percentage with, to pretty much source our ads for us, even as I was based here in Atlanta, I knew a majority of our direct advertisers will come from the Nigerian market. That ultimately started the editorial side of NotJustOk.
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TR: How long did it take to grow such numbers as high as 1million a month as you mentioned earlier?
DO: We started in 2006 but only started heavy on music in 2007 and we were on the TypePad platform like I said, I didn’t want to make this thing big. Honestly, I thought it was going to be one small project that I would do and I’ll have a small following but then I met a developer, Temi Kolawole who used to live in Atlanta, he even built Bella Naija’s new website at the time. Took the platform from a blog spot to a nice design. He reached out to me, after much hassle, I caved and we did it. It cost some money but didn’t break the bank; I still had my full-time job. Also, the fact that we started doing exclusives on the site helped us grow. We grew a lot of relationships with the industry, Dbanj, 9ice etc. We made friends with them through social media – Facebook and MySpace. This was the MySpace, Facebook era? They would send us a song and we’ll put it up with the tag (EXCLUSIVE FROM NOTJUSTOKAY.COM) on there. From then on we went viral, the numbers just went crazy and basically became a household name in the music industry. However, we didn’t do it to go viral, we just wanted to protect the exclusives but people still took it anyway.
TR: How have you changed your business model to shaping up with big techs like Google and Apple who have gone into music in recent times?
DO: Four, five years ago, there began a shift in behaviour in the users; people had less patience to go on websites to consume. The big tech companies did come in and provide additional value, which is not just the popularity of music or the accessibility of music like we did back in the day, but also monetization. The value they provide for the users is an easy way to just consume music with all sorts of different technological assistance to help them just consume music. So we started figuring out how to not just provide music content on notjustok.com, but also provide editorial and help people follow the culture and lifestyle of Afrobeats. That’s how we’ve been pivoting and we realize that people come to discover first on our platform and then go to these digital platforms to save. So what we’ve done is we’ve also found a way to integrate some of these platforms like Apple Music, YouTube embeds on our platform to make it easier for users. We’ve also seen an opportunity to help artists monetize their music on these platforms. So we partner with some of these platforms.
TR: How do you do that?
DO: We have a music distribution arm similar to label situation but we’re not quite a label. We just help distribute. We also help pitch music artist’s music to the DSP like Spotify, Deezer, and essentially help them get more visibility on these platforms. So, we have relationships with all these platforms, but we are still focused on providing that same value – Get your music heard.
TR: This service you’re providing building a relationship with these DSPs, is it better than if they dealt with the artist directly?
DO: Most of these platforms don’t deal with artists directly except you’re signed to a major label. Even then they don’t, typically, especially when it comes to delivery. So, we help them with technology to deliver the content to the DSP. It’s not user-generated content. There’s a technology process that it takes to get the music from artist and delivered to the actual DSPs. Artists are creatives that just want to create music and can get it on those platforms. So, we’ve become the middlemen that help distribute the content to these platforms and then, we collect the revenue for them and distribute back to the artists. Right now, streaming is all, especially in these times. For Nigerian or African artists, the popularity is there but the way money was usually made back in the day was through shows and that has dried up because Jonathan is no longer in power. Now for an independent artist, there’s an opportunity to make a lot of money even if you’re not as big as a Wizkid or a Davido. There are a lot of guys that are making a decent amount of revenue every month and it is predictable, so we are providing that for the artists and the industry in Africa at large. Spotify and the rest can raise a significant amount of dollars to be able to acquire significant amounts of users who are paying subscription fees every month to support the industry at large, we have to give them their kudos.
TR: What have you done to solve the issues of piracy in the industry?
DO: Back in the day, piracy was mostly just Alaba (marketers) but that has kind of died down now because even these guys are having problems as everything has gone digital. Right now you have different types of blogs who basically grew off, kind of like what we started doing. A lot of them are providing a lot of different download links and we also did download links for a while, but recently stopped that. We did that on the request of the artist, those who ultimately just want global popularity, but now, they have platforms that monetize, especially outside the country. Don’t get me wrong, there is still a problem on the continent, 90 percent of the consumers are on the continent and 10% of the monetizers or people that monetize are outside the continent. What we are doing to address this piracy situation is help artist by educating them not to give their songs out for free. We monetize it and stop providing free download links, recently.
TR: Would you ever think of videos, Nollywood as an extension of the platform or is that not in the picture?
DO: Well, I just don’t see the value we can add to that industry right now as there are a lot of formidable players in that sector. On the production end and the technology end, you have the big guys like Iroko, they have been in the game for a while and are still trying to figure things out. Music is a short form of entertainment, most songs are three or four minutes long, whereas movies are a massive file, so right now zero thoughts towards movies.
TR: Is there a backstory behind the name notjustokay?
DO: It’s a silly story really. Before I started the site, I was reading a book by Seth Godin called Purple Cow which was about remarkability. That made me want a name that kind of stood for remarkability. Then I thought to myself, if I go on a date right now and had to relay the experience to a friend but it was just okay. How do I make “just okay” remarkable? It’s a negative, but I can spin this, so I went for “more than okay” which is much better than “just okay”. Hence, “NOTJUSTOKAY”. It’s simple right?
You can watch the full interview on the Tech RoundUp YouTube Channel.
Between Amazon, TikTok and Netflix; a battle for souls of streaming patrons
Intrigues and competition as streaming services continue to tussle for subscribers.
More than a few eyebrows were raised when Netflix revealed during the week, that competitors could be responsible for the relatively flat curve in profit in its Q2 results.
In its letter to shareholders, Netflix admitted that competitors such as Apple, Amazon, Disney, NBCUniversal and WarnerMedia were not giving them easy access to the market share, but assured that the streaming service had its strategy, and could improve its content faster than its peers.
It also admitted that social media could pose a different kind of threat, particularly TikTok, which is growing at an unprecedented rate and showing how flexible internet entertainment could become.
Netflix’s paid membership numbers grew from 182.856 million at the end of March 2020, to 193 million at the end of June 2020 – a growth of about 10.1 million, much more than the 7.5 million that the company predicted in April.
This however did not reflect in the profit accordingly, as the company recorded $720 million profit on revenue of $6.1 billion in Q2 as against $709 million profit on $5.8 billion revenue in Q1, 2020.
There were assumptions that people would continue to turn to Netflix for entertainment as they remained locked down at home, but these brands are now proving to Netflix that they are also in the race for the numbers all the way.
Amazon’s Prime Video
Prime Video, is an American Internet video on demand service that is developed, owned, and operated by Amazon.
Similar to Netflix’s mode of operations, Prime Video secures rights to original content. Forbes reports that even though Netflix has more subscribers than Amazon’s Prime Video, Prime has three times as many movies in its archives.
Netflix has about 3,781 total movies while Amazon Prime has about 12,828 movies. The billions of dollars that Netflix has invested in purchasing original content appear to have been dwarfed by its rival.
Weighing the options
Reviewers adjudged both brands as going toe to toe on various fronts, releasing new exclusive videos every week.
However, Netflix offers its services at the most expensive rate. Amazon Prime Video offers its monthly premium subscription at $8.99, while Netflix offers its premium subscription at $12.99. Other brands in the space offer at even lower rates. For instance, Apple offers its subscription for $4.99, and Disney’s monthly subscription sells for $6.99.
Though Apple and Disney are not considered major threats to Netflix, it is clear that if the battle for market share comes down to prices, Netflix could lose out, especially in the African region where poverty is higher, and income per capita is lower.
Growth seems promising for the region, especially since Netflix now streams its local content. Netflix has so far streamed several Nigerian movies, unlike any of the other two.
However, apart from price, Netflix has set the pace for the others. According to a Forbes review, a close look at Prime Video’s thousands of movies would reveal a lot of “extremely low-budget shows, including some that look to be home-made” although there are also thousands of quality originals on the platform, much more than the entire videos on Netflix.
Their survey also shows that in giving value for every dollar paid, Prime Video is still ahead due to cheaper costs and more movies in its archives.
Every dollar of subscription gives you access to 247 shows and 1,427 movies on Prime Video, 149 shows and 291 movies on Netflix, 34 shows and 88 movies on Disney, 146 shows and 116 movies on the recently launched HBO Max, and 4 shows and 1 video on Apple TV.
For video quality, however, it’s a tussle between Netflix and Prime Video. Also, Netflix is the only one of the lot to have made an official entry into Nigeria and other African countries; experts predict that Europe, Middle East and Africa region will soon account for more than a third of Netflix’s total subscriber base.
However, the Q2 results have shown that growth in subscriber numbers may not necessarily translate into growth in profits. Due to the fact that Netflix hardly ever discusses subscriber figures in a specific country (aside from the US and Canada), there are a whole host of estimates available as regards the exact subscriber figures from country to country.
However, Europe, Middle East and Africa have seen a significant increase; from making up 25% of the 118.9 million subscribers in Q1 2018, the region now accounts for almost a third of the 193 million paid subscriptions.
What is with TikTok?
TikTok is a Chinese video-sharing social networking service owned by ByteDance. Though launched in the Chinese market since 2016, the network gained unrivaled popularity in 2020 as it soon became a quick remedy to boredom. It is used to create short dance, lip-sync, comedy and talent videos, making its audience into “prosumers”, that is producers and consumers of its content.
Unlike Netflix and Amazon Prime, TikTok does not spend millions of dollars in purchasing originals and exclusives, but allows users to become creators. Experts argue that it is this added level of engagement – where the user becomes producer and director – that has given TikTok an edge in the race for internet entertainment.
A cut in the Nigerian market
From over 200 million Nigerians, none of these streaming platforms have staked a clear 10 percent, and over 90% of the Nigerian populace is still unclaimed.
Beyond marketing strategies and promotions, the battle will come down to content as it is said that “content is king.” That platform that succeeds in giving Nigerians what they want might just have the day.
In quantity, TikTok is bound to be ahead since it is a community publishing platform where the users can create multiple content daily.
When it comes to the kind of local quality that will win the heart of Nigerians, I daresay that Netflix is ahead of the game.
Lasisi Elenu’s “Mama and Papa Godspower” comedy will soon be launched as a Netflix series, and if Lasisi’s views on Youtube and Instagram will be a determining factor, hundreds of thousands of loyal fans might just join the Netflix family.
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There is also the recently signed deal with Mo Abudu’s EbonyLife to bring a series-adaptation of Lola Shoneyin’s “The Secret Lives of Baba Segi’s Wives” and a film-adaptation of Prof. Wole Soyinka’s “Death And The King’s Horseman” to screen.
Both shows, exclusive to Netflix, can well be described as the ‘mother of all local content’, not only set in Nigeria, but portraying depths of the Nigerian culture and history that the other platforms lack.
Eventually, it may or may not be a game of numbers, but this league promises to be an interesting one to watch.
Mr Eazi raises $20 million fund to invest in African artists
The fund is to create a new platform to fund the music entertainment ecosystem in Africa.
Nigerian Afrobeats star, Oliwatosin Ajibade, popularly knows as Mr Eazi , has raised $20 million for his Africa Music Fund (AMF) to invest in the careers of African music talents.
This was disclosed by Mr Eazi in a statement issued to CNN. According to him, the fund was led by 88mph, a firm that invests in African Businesses.
He explained that his intention was to create a new platform to fund the music entertainment ecosystem in Africa adding that the entertainment ecosystem is not understood by intuitional investors in Africa and leads to limits in funding the industry.
There has been no investment of this type or magnitude in the Nigerian music space before.
“Artists cannot go to banks to get money for their music because financial institutions don’t understand how to secure intellectual property. They get it for physical properties but not for music. So, because not a lot of people understand the music business, there is no finance product for musicians,” he told CNN.
How it works: Artists, who already have a foothold in the continent, are expected to join the platform, and their data would be gathered to see how much they are fully earning from music streams. Upfront payments would be made on the revenue for the artists, which gives them more capital to expand their creativity.
The upfront payments would be paid back in installments by the artists as the investments on their earnings rise.
“Let’s say we have a two-year contract with someone. In those two years, we will be their representative, helping them manage their music, and as they grow we will be deducting the initial investment from their earnings,” he said.
Why it matters: AMF would enable African creatives have access to a larger audience through streaming platforms and technology, which will enable them have access to festivals and shows for their music. Mr. Eazi himself has gathered more than 5 million streams on music streaming platforms like Spotify.
He announced that the AMF will partner with Vydia, music technology company, and both will launch a music distribution platform called Cinch Distro. The platform would help upcoming creative upload their songs for 500 naira.
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“The way it works is that they register on the platform and make their music. It has an AI-based tech that will filter their possible revenue based on the number of streams they get on the platform alongside a couple of other metrics,” he added.
He added that the platform would help artists have their music distributed and their progress gets tracked through AI, enabling Cinch Distro make data-backed decisions on further investments.
Netflix adds 10.1 million paid users in Q2 2020, yet stock plunges more than 9%
Netflix’s revenue grew by 25% over the same quarter in 2019.
The world’s largest streaming company, Netflix, recorded an impressive result recently, showing that it added 10.1 million users. However, stock traders became worried as the company couldn’t guarantee the performance recorded in Q2 2020, for the next quarter, making the stock to plunge by more than 9% after the results were released.
“Netflix added 10.1 million paid memberships versus 2.7 million in last year’s Q2. It’s a pace that cannot be kept,” Netflix CEO Reed Hastings pointed out in his shareholders’ letter. “The positive variance relative to our 7.5m forecast was due to better-than-forecast acquisition and retention.”
“In the first half of this year, we’ve added 26 [million] paid memberships, nearly on par with the 28 [million] we achieved in all of 2019. However, as we expected … growth is slowing as consumers get through the initial shock of COVID-19 and social restrictions.
“Our paid net additions for the month of June also included the subscriptions we canceled for the small percentage of members who had not used the service recently,” Hastings added.
Netflix’s revenue grew by 25% over the same quarter in 2019, while quarterly operating income exceeded $1 billion.
Quick fact: Netflix is an American streaming company that allows subscribers to watch movies, documentaries, different popular TV shows, and many more through internet-connected hardwires.
Operating margin expanded by an unheard-of 770 basis points year over year to 22.1 percent. Content and marketing expenses dropped lower than expected, with the COVID-19 pandemic delaying some production expenses.
“Everyone is wrestling with implications both on health, on hunger, poverty, and we too are really unsure of what the future brings,” said Hastings on the company’s earnings call Thursday.
Hastings says the platform is making its contribution to make home confinement a little more bearable in these difficult times and it is focused on getting its content out to the subscribers.