News Update

Amazon Prime to layoff staff and stop producing African content

Amazon Prime, the global streaming giant, is undergoing significant restructuring, resulting in staff layoffs and a reduction in local content production in Africa and the Middle East, as reported by Variety. The streaming platform, ranking as the third largest in Africa, is realigning its business strategy to prioritize the European market. In an email to staff, Barry Furlong, Vice President of Prime’s EMEA division, emphasized the decision’s rationale to focus on “areas that drive the highest impact and long-term success.” The precise number of affected employees remains unclear.

While approved shows such as “Ebuka Turns Up Africa” will continue to be released, Amazon Prime will cease approving local shows in sub-Saharan Africa, the Middle East, and North Africa. This strategic shift raises questions about the platform’s trajectory in the African streaming market, which is anticipated to reach at least 18 million paying streaming customers by 2029, a substantial increase from the 8 million customers recorded in the previous year. Despite this growth, streaming penetration remains relatively low, with South Africa and Nigeria accounting for the majority of customers. Projections indicate that by 2029, only 7.7% of African households will subscribe to at least one streaming platform, with Netflix and Showmax currently dominating with a combined 75% market share.

In 2021, Amazon Prime was estimated to have 575,000 subscribers in sub-Saharan Africa, a figure expected to surge to 1.9 million by 2026. However, the streaming giant seems to be shifting from its initial ambitious goals for African expansion.

From grand aspirations to strategic retreat, Amazon Prime initially set its sights on becoming the premier streaming platform in Africa. The platform aggressively expanded its workforce and secured partnerships with at least four local production studios when it entered the African market in December 2021. With dedicated teams in Nigeria and South Africa, Prime aimed to establish a robust local content strategy. Ned Mitchell, Prime’s Head of Originals for Africa, expressed this commitment in February, highlighting collaborations with Nigerian studios such as Anthill, Inkblot, and Greoh.

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The three-year partnership with Jade Osiberu’s Greoh was particularly noteworthy, granting exclusive availability of Osiberu’s movies and shows on Amazon Prime. The first film from this collaboration, ‘Gangs of Lagos,’ achieved remarkable success, breaking multiple records and becoming the 9th most-watched non-English title on Prime within two months. Its popularity even catalyzed the establishment of a new film-financing firm, Capital Films.

However, Prime’s decision to scale back its presence on the African continent presents a challenge to the emerging business model where tech-focused professionals finance and create Nollywood movies for international streaming platforms. Notable successes in this space include Netflix’s ‘The Black Book,’ watched over 70 million times in less than three weeks. Meanwhile, African streaming platforms, such as Video Play, Telkom One, and Kwese TV, have faced challenges and shutdowns. In November, TechCabal reported a significant decline in IrokoTV, Africa’s oldest streaming service, with only 46,000 active users in December 2022—a 76% drop from the beginning of the year. Jason Njoku, CEO of IrokoTV, revealed that despite a $30 million investment in Nigeria, the service had yet to turn a profit in the country.

Prime’s strategic shift in Africa not only impacts its own trajectory but also influences the broader landscape of tech-driven investments in Nollywood. The challenges faced by regional streaming platforms underscore the complexities of establishing a sustainable and profitable streaming ecosystem in the African market. As the streaming industry in Africa continues to evolve, navigating these challenges will be crucial for both global giants like Amazon Prime and local players seeking to capitalize on the growing demand for digital content.

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Ibrahim Ismail

A passionate and highly skilled individual who has seamlessly blended the worlds of statistics, technology, and finance.

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