Amazon Prime, the global streaming giant, is laying off staff and scaling back local content production in Africa and the Middle East, according to a new report Variety. The streaming platform, the third largest in Africa, is restructuring its business model to focus on its European market. Barry Furlong, vice president of Prime’s EMEA division, told staff via email that the decision was made to focus “on the areas of highest impact and long-term success.” It is unclear how many employees will be affected.
Approved shows such as “Ebuka Turns Up Africa” will continue to air as Amazon will still have a presence 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, 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 located in South Africa and Nigeria. By 2029, only 7.7% of African households would pay 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.
From lofty goals to retreat
Amazon Prime had lofty goals to be the biggest streaming platform in Africa as it quickly hired a lot of staff and signed at least four partnerships with local production studios when it landed in Africa in December 2021. Prime has two exclusive 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 an exclusive 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 leading producers,” said Ned Mitchell, Prime’s head of originals for Africa. February.
By then, Prime had announced multi-year partnerships with Nigerian studios such as Anthill, Inkblot and Greoh. But it was her collaboration 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 from this partnership, “Gangs of Lagos,” broke several records. Within two months, it was 9th most viewed non-English title on Prime. Its success also inspired the creation of a new film financing company, Capital Films.
The reduction of Prime’s presence on the African continent also offers a new challenge to a new business model where tech-centric professionals are increasingly financing Nollywood films or even creating them to sell on international streaming platforms. This business model has seen hits 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, with Video Play, Telkom One and Kwese TV shutting down. In November, TechCabal reported that IrokoTV, Africa’s oldest streaming service, had only 46,000 active users as of December 2022, down 76% since the start of the year. IrokoTV CEO Jason Njoku shared that the service had invested $30 million in Nigeria but was yet to make a profit from the country.