Netflix in Nollywood

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NETFLIX IN NOLLYWOOD

The early 2000’s witnessed the emergence of the Nigerian Film Industry, popularly known as, Nollywood. Captivating Nigerian stories were brought to life on television screens and most of the world has grown to love them. The stories resonated with the many Nigerian homes as common household themes were tackled including love and romance, comedies, village life, urban modernity as well as marriage. This entertainment from Nollywood films blossomed beyond the Nigerian borders to reach other African countries that got to appreciate the common traditions and cultures portrayed. An increased demand locally and across the globe propelled Nigeria’s film industry to incredible success. 

Today, Nollywood is the second largest producer of films in the world, second only to India’s film industry Bollywood. However, in terms of annual revenue realized from sales of these films, Nollywood lags behind several other global filming industries, for instance, Hollywood, which leads the pack. As of 2019, revenues generated from films from the United States of America (USA) hit a record USD $42.5 billion compared to Nollywood’s average annual revenue between USD $500 million and USD $1 billion.

According to a World Economic Forum Report, Nollywood employs more than one million Nigerians,  and overtime has contributed to 1.4% of the country’s Gross Domestic Product (GDP). The film industry is one of the largest employers in the country, second only to the agriculture sector. On average, fifty films are produced each week in Nollywood (2,500 films annually) compared to fourteen films a week in the USA. IROKOtv Nigeria’s dominant video streaming platform, reports that Nigerian films attract a global audience of roughly 6 million viewers in 178 countries. Two of the major factors that have contributed to this mass production are the low budgets required for most Nigerian films and the shorter time period taken to produce each film – on average, one Nigerian film is produced within 7 – 10 days at an average budget of USD $10,000 contrasted to Hollywood, where the average budget for a film produced is USD $7 million.

Nollywood’s success can be attributed to several factors including the low production costs since most films are produced using small-scale digital cameras and relatively low-quality desktop editing software, which in part contribute to the lower revenues compared to other film industries. However, the main ingredient that has grounded the film industry in Nigeria is the distinctive telling of stories for Africans, by Africans – stories that are relatable to most African cultures and which dissect the integral aspects of normal daily living. These stories tell the type of leadership we have in Africa, the unique love stories that exhibit African traditions and the family routines shared by most African families.

Researcher Lincoln Wilcox highlighted this important factor, he comments, that despite the fact that Hollywood and India’s Bollywood made plenty of movies in the late 1990’s, most African audiences could not fully connect with their characters and storylines. This propelled Nollywood to meet this demand in African countries, earning the loyalty of African audiences and effectively gaining a comparative advantage in Africa. Further to supplying African films, Nollywood fueled the creation of original films in many African countries that has helped to recognize African creators. Even though, Nollywood, has not arguably matched other global film industries in terms of revenue, African film industries continue to tell authentic stories, which promotes the African culture.

However, notwithstanding the notable successes, Nollywood’s popularity has also shared a significant set of challenges, the most profound being the issue of piracy. The Economic Times defines piracy as the unauthorized duplication of copyrighted content which is often sold at discounted prices. Piracy reduces the profit margins of filmmakers through replication and illegal distribution. In fact, an article by the International Monetary Fund on “Runaway Success: Nigeria’s film industry is taking off”, indicates that for every legitimate copy of a Nigerian film sold, nine others are pirated. In 2014, the Nigerian Copyright Commission (NCC) stated that Nigeria was losing over USD $1 billion annually due to piracy. The effects of piracy affect the film industry’s value chain significantly – distribution revenues that would otherwise be earned by licensed distributors. This makes it difficult to attract funding. However, the NCC has since implemented stringent policies to curb illegal production of film materials including prosecuting infringers and public education on the damage that piracy causes.

Another major challenge that Nollywood has faced is the narrative of quantity over quality. Despite being the second largest film producer in the world, Nollywood film production has often been done at the expense of great film quality. Lack of proper screen development, bad lighting and sound and amateur editing are just some of the factors that compound the problem. This leads to lower revenues. The Telegraph notes that the Nigerian government has done little to support the industry. The industry has been majorly supported by veteran actors and entertainers. For instance, Nollywood star, Omotola Jalade-Ekeinde, came up with the first entertainment business fair known as TEFFEST, aimed at bringing together actors, singers, producers, insurers, lawyers and managers to better organise the sector.

Source: twitter (Netflix Naija)

Netflix in Nollywood

Despite its unique challenges, Nollywood has continued to attract the attention of foreign investors. In February this year, Netflix announced its presence in Nigeria sparking excitement across the country. This was the second most significant film transaction after last year’s acquisition of Lagos-based production studio, ROK film studios by French media giant Canal+. Netflix is currently the most popular subscription-based streaming service in the world with roughly 167 million subscribers globally and an annual revenue of approximately USD $15.8 billion. However, Netflix’s interest in Nigerian films began in early 2018 when it made an acquisition of Nigerian film, Lionheart. Netflix has highlighted its ambition of growing its subscriber base to 5 million by 2025 given that there are fewer than 1.5 million Netflix subscribers in Sub-Saharan Africa.

This Netflix investment will benefit the Nigerian film industry as well as the Nigerian economy on several fronts. First, Nollywood films will gain from increased visibility and viewership. As mentioned, the strong presence of Netflix across the world means that many viewers will be able to access Nollywood content. In addition, improved quality will be demanded for the films which will help attract significant viewership and generate higher returns for all who are involved in the production chain. Third, given that Netflix not only plans to acquire more Nigerian films but is also planning to be involved in the production of Nollywood films, more actors will gain exposure to global talent which will boost their recognition. In terms of financing, Netflix can help finance homegrown films that demand significant capital. Given this support which will boost quality and revenues, Nollywood has the potential to compete globally with other film industries.

However, all investments have the element of risk. Some of the challenges that can be expected before ‘Netflix Naija’ thrives in the production of Nollywood films include steep internet costs and connectivity problems in Nigeria that could hamper maximizing on the industry’s potential – it is estimated that only 40% of households own a television. Further there is competition from established streaming platforms in Africa, for instance, iROKOtv and South Africa’s Showmax.  The outdated copyright laws and the lack of enforcement of similar intellectual property rights is equally a great concern. In fact, Samuel Andrews, a Professor of Intellectual Property Law, argues that despite Netflix’s presence and investments, the proposed Nigerian Copyright Law (which was drafted in 2012) needs to become law so as to help protect Nollywood in the digital market place.

Nollywood has dominated Africa’s film industry for many years. The current injection of foreign investments reveals the industry’s latent resource and the potential to compete globally in terms of revenues and profits. As the challenges continue to be addressed, the industry’s success is closer than ever before.

Written by Frank Muhoho
@naima_frank