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Nigeria’s streaming industry booms but data cost slows growth

A 34-year-old member of one of the biggest evangelical churches in Nigeria, Zoe Odunayo, faced a challenge one Saturday as she planned to participate in a healing service the church was streaming. It was going to be a three-hour service, which meant she would need to stream the service with her limited data bundle. The most she had bought from MTN on data was N2000 for 4.5GB.

“My only option was to go and participate from one of the viewing centres the church set up around my location,” Odunlaye said.

The church estimated that over 3.4 billion people would stream the three-day service from around the world, with Nigeria contributing over 10 million of the total viewers.

As the COVID-19 pandemic continues to change the way people live, it is a boom time for the video-streaming market as major events, entertainment (cinemas are still partially open), conferences, etc, move online. However, streaming services have to contend with the cost of internet access in Africa’s most populated nation.

‘Twice as Tall,’ the album by Nigerian artiste, Burna Boy, which won the Best Global Music Album at the 2021 Grammy Awards, had several streamed its way to success on the way to winning the honour last night.

Less than four months after it was released on August 14, 2020, Twice as Tall was ranked the most-streamed album in Africa with 64 million streams. It outstripped Wizkid’s ‘Made in Lagos,’ which came in second with 31 million streams. Tiwa Savage’s ‘Celia’ was third in Nigeria with a total of 15.1 million streams, while Davido’s ‘A Better Time’ was ranked seventh at 9.15 million streams.

Read Also: Burna Boy stands twice as tall with first Grammy Award win

PricewaterhouseCoopers (PwC) had projected in a report that Nigeria would be the world’s fastest-growing entertainment and media market (E&M) with a 12.1 percent Compound Annual Growth Rate (CAGR) over a five-year period (2017-2021).

The Nigerian streaming market packs a lot of exciting content in Nollywood, music, comedy skits, religion, among others. The market has recently received a lot of attention from investors, including Spotify, which is projected to overtake Apple as the most popular streaming service in the world. There are already incumbents like Netflix, Showmax, Red TV, BoomPlay, etc, that continue to expand their content portfolios.

Valued at $50 billion, Spotify has over 345 million monthly active listeners. The streaming service says launching in new markets like Nigeria is the next step to fulfilling its ongoing commitment to building a truly borderless audio ecosystem.

But a user will need about 2MB+ of data per every three-minute song on Spotify, amounting to around 40MB per hour.

ArisePlay, a Nigerian streaming platform that launched in 2020, also said last week it was concluding a $100-million seed funding deal from venture capitalists to push its streaming services around the world.

The interest, nonetheless, Nigeria remains on the list of countries where citizens work the most to pay about N2000 for 1GB of data. Nigerians have to work 33 hours 42 minutes to afford the cheapest broadband internet in a month, according to data from Surfshark. The global average people have to work to afford the cheapest broadband is three hours 48 minutes a month.

A new report by the Alliance for Affordable Internet (A4AI) also found that while the cost of data has dropped significantly in countries like Nigeria, the internet is still hard to access. Growing financial inequality continues to be a factor keeping millions from being connected.

“Over this time we’ve seen particularly strong improvements in Africa and the LDCs (Least Developed Countries), with costs dropping by an average of 65 percent in both groups. In the least developed countries we’ve studied since 2015, people who previously paid an average 14.1 percent of their income for 1GB today pay 4.8 percent,” the A4AI researchers said.

However, the Nigerian Communications Commission (NCC) says things are improving. In February 2021, the commission said Nigerians now consume 80,000 terabytes of data (80 million GB), making the country the second-largest data consumer in sub-Saharan Africa. South Africa, the largest, consumes about 269,000 terabyte of data every month.

Nigeria’s enviable consumption of data notwithstanding, it is unlikely that the 80m gigabytes of data are consumed by the 108.2 million unique subscribers in the country. The National Bureau of Statistics (NBS) report on poverty puts the number of Nigerians living in extreme poverty at over 80 million. With the average Nigerian working 40 hours per week, it means they commit a total of 160 hours per month to work.

In essence, 80 million Nigerians putting in about 160 hours to earn N30,000 per month means each person earns an hourly wage of about N187.5. This is still less than N200, the cheapest price for 1GB of data.

It is therefore easy to see why millions like Odunayo won’t be downloading the Netflix app any time soon or playing a video on YouTube.

“I don’t watch videos on YouTube from my phone because of the data cost. So, I prefer to download audio versions,” notes Isaac Moses, a Bolt driver in Lagos. He spends about N2000 on data every month.

YouTube uses approximately 562.5MB of data per hour when streaming at 480p resolution (SD), according to research by If a user opts to stream videos in HDs at 60 frames per second, the data usage increases to 1.86GB per hour for 720p, 3.04GB per hour at 1080p, and 15.98GB per hour for videos in 4K.

The A4AI report notes that the average affordability of a 2GB package currently stands at 5.7 percent and a 5GB package is priced at 9.9 percent of average monthly income. This puts them out of reach for the vast majority of people in countries like Nigeria and constitutes a major barrier to the growth of the streaming market.

“What is the point of downloading and subscribing to a streaming service if you don’t have the data to enjoy the content?” asks a user.

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