1. Executive Summary EbonyLife Network is going public on the Nigerian Stock Exchange. EbonyLife has been a private company since 2013, but has quickly risen to the top of the Nigerian entertainment market by offering top-notch entertainment, stellar streaming services, critically- and internationally-acclaimed, in-house produced films, and a variety of shows in a range of genres for all demographics. Now EbonyLife Network is giving investors the opportunity to stake a claim in the company’s success and in its future with an initial public offering (IPO). The company seeks to raise $500 million in capital to fund its expansion, as it seeks to grow into commercial centers, develop state-of-the-art luxury cinemas, and bring the latest in technology to its fans—including the Amazon Box with WiFi stick and EbonyLife ON. This information memo provides data on EbonyLife, its products and services, its target market, its revenue and employee profile, and how it plans to use the capital gained from this IPO.

2. Investment Thesis

The goal for EbonyLife Network is to have the answers and solutions to all viewers’ entertainment needs—whether that is in the house or on the go. EbonyLife wants to be there with Nigerians all around the world, sharing in those moments that make life special and showing the rest of the world what Nigeria has to offer.

To fulfill that goal, EbonyLife Network is turning to the public for the first time ever and offering it a chance to be part of the awesome growth story that is EbonyLife. The aim of this company is and has always been to give back to Nigeria and reflect that amazing treasures and talents that the Nigerian people possess.

The money that is collected from this IPO will go to fund several of EbonyLife Network’s initiatives that are currently in the works:

First, is the Amazon Box. This set-top box is a hybrid of Live Streaming Apps and Channels along with On-demand Videos running simultaneously on a single platform. The Amazon Box will use satellite push technology that meets the needs of our subscribers in Africa.

What makes the Amazon Box unique for EbonyLife Network is the fact that it is a female set top box that focuses exclusively on female programming: it provides female channels, powered by Women. The Box provides the target audience with direct access to Fashion Weddings, Female Empowerment shows, Romantic Films, Crime and Investigation dramas, cooking channels, Beauty shows, exercise and weight loss series, Travel shows, Reality shows, Telenovela shows, Shopping Channels, Dating Channel, Monthly Female Magazines, and Blogs to name just a few of the great options that can be obtained through the Box.

Accompanying the Amazon Box is the Wifi Stick, which allows the viewer to take this amazing machine with her wherever she goes. Likewise, the viewer never has to be far from social media, where so many of life’s great stories and adventures are shared with family and friends. Social media pages will be included so there’s a community on the box: it’s like having your very own Facebook or Twitter right on your home screen.

Funding will also be used to promote EbonyLife ON: A fresh, on-demand viewing experience that can be enjoyed on ebonylifeon.com or via the mobile app. Subscribers can watch gripping series, riveting Nollywood movies, unique documentaries, and more.

EbonyLife Network’s infrastructure requires this investment capital to cover design, production, technical (server, streaming) maintenance, staffing, protection against hacking, system failure, blackouts and other information technology issues, and operation costs, including managing uploads, files, data storage, etc.

EbonyLife ON will enable users to:

• Stream content from any device—whether it is an Android app or an iOS app

• Access unlimited content, such as TV shows and movies

• Enjoy fresh episodes all the time

• See content in high definition

• And stream TV live anytime, night or day

The cost to set up the Amazon Box is bundled in with the IPO target of $500 million, which will also go to cover EbonyLife’s expansion in other areas as well. The cost of the set top boxes is estimated to range between $15-20 million. But there are other costs associated with the streaming service as well. EbonyLife Networks relies on satellite bandwidth to get its programming out. Satellite Internet access can couple with cable Internet to deliver programming via communications satellites that orbit the earth and via towers and cables that transmit data. The signals sent out by these satellites...

Satellite providers offer viewers quality content and programming, but are subject to weather-related disruptions. Users require dish and box equipment. These expenses are estimated to range from another $25-50 million.
EbonyLife ON will use VOD technology—which is Internet streaming video-on-demand technology currently leading the way in the marketplace. However, satellites may also be used to heighten the experiences of the users via satellite bandwidth. Since EbonyLife is not currently in ownership of its own satellites, it relies on other companies to transmit its data. This IPO will allow EbonyLife to really invest in satellite technology so that it can control its revenue streams and become a true top-down business. Besides, satellites important to the overall strategy of EbonyLife Networks as it rolls out its Amazon Box an EbonyLife ON, as the Network seeks to cater to those individuals who seek a lot of choices for programming but cannot be reached by local cable distributors. Satellites allow users to attach a dish where they want to watch and thus can meet the needs of a much wider population. It can also provide more content at a cheaper price than cable users.

Ebony will not be able to launch its own satellite into orbit at this time unless it accomplishes its goal of raising the funds through IPO so that it can send its own satellite into orbit. For now, Ebony will join platforms such as DSTv, GoTV and Startimes. The key expenses for this bandwidth are estimated at: $20 million per year. Other costs include:

· Programming to produce = $150 million

· Channels to license = $25 million

· Marketing and Promotion = $50 million

· Programming licensed = $50 million

· Office expenses, overheads and salaries = $75 million

The projected growth rate of EbonyLife ON is 3x per annum with the expected market penetration being 38%, which is in line with analysts’ expectations. The breakeven for the company is 3.9 million subscribers, which the firm anticipates collecting within the first month of operation.

EbonyLife Network also anticipates the Amazon Box being a hit with its female audience, which is estimated to be roughly 45 million. The company expects to land the Amazon Box within 10% of this market within the first 3 months of operation.

3. Overview of the Market

The market is ripe for EbonyLife ON, as many viewers of content have switched to mobile platforms and Internet streaming services. The cable television approach to entertainment is losing ground as the younger generation is growing up without ever having been attached by the cord to the entertainment industry. Its content is all available on the go. Thus, EbonyLife ON is perfect for this market.

Likewise, the market for Amazon Box is now coming into its own. Women are being celebrated around the world and, in fact, were recently named Time’s Person of the Year. Women have voices that need to be heard and they want entertainment and services that are tailored just to them.

EbonyLife Network aims to reach target audiences in Nigeria and beyond with both EbonyLife ON and Amazon Box. This is possible because of the African Diaspora, which has spread Nigerians all over the world. Thanks to the Diaspora, the target audience is actually quite large for EbonyLife ON. Indeed, just in Africa alone it is not unthinkable to estimate a target audience of 75+ million subscribers. Adding to the African audience is the Diaspora audience. The numbers for African Diaspora can be assessed by region. In North America, the number is 39 million; in Latin America, the number is 112 million; in the Caribbean, the number is 13.56 million, and in Europe the number is 3.5 million. Thus, there is quite a market for this initiative.

4. Overview of the Target Company

The Company is situated nicely to deliver the products that Nigerians want and that the international community is clamoring to see. Annually, EbonyLife TV produces 1000 hours of premium content with the express purpose of promoting the idea that Africa is changing—and changing for the better. Its content includes: The Spot, Moments, Life of a Nigerian Couple, Paradise Way; Hush, Shuga, Tinsel, DHA, and Before 30. EbonyLife offers comedies like Jenifa’s Diary; talk shows such as Moments, Highlights with Ik, and The Spot; reality programming Big Brother Africa and much more.

EbonyLife is…