Amazon Prime, the global streaming giant, is laying off staff and scaling back its local content production in Africa and the Middle East, according to a new report by Variety. The streaming platform, the third largest in Africa, is restructuring its business model to focus on its European market. Barry Furlong, the vice president of Prime’s EMEA division, told staff in an email that the decision was made to focus “on the areas that drive the highest impact and long-term success.” It’s unclear how many employees will be affected.
Approved shows like “Ebuka Turns Up Africa” will still be rolled out as Amazon Prime will still be present in Africa, but the platform will stop approving local shows in sub-Saharan Africa, the Middle East and North Africa.
Africa’s streaming market is projected to have at least 18 million paying streaming customers by 2029, up from 8 million customers last year. With a combined 75% of the streaming market, Netflix and Showmax are the market leaders. Despite this growth, streaming penetration remains low, as most of these customers are in South Africa and Nigeria. By 2029, only 7.7% of African households would be paying for at least one of these platforms.
Amazon Prime was estimated to have 575,000 sub-Saharan customers in 2021, which was projected to reach 1.9 million in 2026.
Amazon Prime had lofty goals of being the biggest streaming platform in Africa, as it quickly hired lots of staff and signed at least four partnerships with local production studios when it landed in Africa in December 2021. Prime has two dedicated teams for Nigeria and South Africa, its two largest markets. While the Nigerian team operates out of London, the South African team works in Cape Town and Johannesburg.
“We now have a dedicated local content strategy for the continent across the board, from originals to be developed and produced by Amazon Studios to an exciting licensing slate with top-tier producers,” Ned Mitchell, Prime’s head of originals for Africa, said in February.
By then, Prime had announced multi-year partnerships with Nigerian studios like Anthill, Inkblot, and Greoh. But it was its partnership with Jade Osiberu’s Greoh that stood out. The three-year deal would allow all of Osiberu’s movies and shows to be exclusively available on Amazon Prime and the first movie out of this partnership, ‘Gangs of Lagos’, broke multiple records. Within two months, it was the 9th most watched non-English title on Prime. Its success also inspired the creation of a new film-financing firm, Capital Films.
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Prime scaling back its presence on the African continent also offers a new challenge to a new business model where tech-focused professionals are increasingly financing Nollywood movies or even creating them to sell to international streaming platforms. This business model has seen successes like Netflix’s ‘The Black Book,’ which was watched more than 70 million times in less than three weeks on Netflix.
African streaming platforms have also struggled in recent years, as Video Play, Telkom One and Kwese TV have all shut down. In November, TechCabal reported that IrokoTV, Africa’s oldest streaming service, had only 46,000 active users in December 2022, a 76% decline from the beginning of the year. IrokoTV’s CEO, Jason Njoku, shared that the service had invested $30 million in Nigeria but had yet to profit from the country.
Article courtesy TechCabal.
