Netflix Naija: The end of Africa’s largest movie industry?

Netflix has announced that they are increasing their investment in Nigeria, the home of Nollywood, Africa’s most prolific film industry. There are already reports of African original scripted series in development, and opportunities are opening up everywhere. “Netlfix Naija” is the newly branded title of this investment by the tech giant looking to expand their presence in Africa.

A lot of excitement is in the air, but for those paying attention, it will spell the downfall of an industry that has yet to get on its feet.

In a lot of countries, like India, or even the US, Netflix’s entry into the film and television market offered innovative competition that forced its other players to rise to the challenge and improve their business offerings. The US, most especially, has shown us what happens when tech enters the realm of film and television. The pivot to on-demand entertainment via streaming platforms by Disney, NBC, Apple, HBO Go, Facebook Watch, and Youtube has ushered in some of the biggest deals, and acquisitions the entertainment industry has ever seen.

The long term impact of these deals will manifest with the passage of time. For now, the appetite for better, nuanced localized shows continues to grow, showing how powerful viewers’ opinions are in this social media era. Governments all around the world are also working hard to create laws to regulate and support the growing demand for digital content.

The sad reality is that in Nigeria, I see an outcome where there will be a boom in content creation, followed by a serious contraction of the industry when inefficiencies associated with high cost of data, crippling piracy, and weak intellectual property laws come to pour sand in our garri.

Here are my reasons why Netflix’s entry into the market could spell doom and gloom for Nollywood:

Nollywood lacks infrastructure to efficiently provide returns on investment

When people talk about Nollywood, the moniker appears to reference an industry where talented people unite to produce a film. The movie experiences a standard distribution window, and, if all goes well, returns some kind of profit that investors can recoup. Yes, I know even in the US there is no guarantee of ROI. The creative industry, is by its very nature uncertain. No one can accurately predict what stories will resonate with audiences. Those are luxurious problems to have, if you are a Nigerian filmmaker. Nollywood has very specific demons.

We begin with writing and production. Training opportunities for creatives tend to be ad hoc, on the job learning. No standard of excellence exists across the spectrum, including directors, writers and actors. The references at hand include, older content that is out of date and out of touch with current trends, or foreign content that holds little or no cultural relevance. Now couple that with the challenge of training cameramen, directors, and post-production technicians. The education and training gaps are significant and without reliable sources of training, creators can only rely on recommendations and word of mouth to find quality artisans.

Beyond production, distribution is problematic. Nigeria, with a population of nearly 200 million people, has — as of May 2019–45 cinemas.

Compare that to their Asian counterparts. China boasts 60,000 screens, or approximately 10,000 movie theaters. Over in South Korea, the city of Seoul has approximately 600 screens. Nollywood’s lack of screens automatically excludes the majority of the population. There simply are not enough screens for a meaningful fraction of the population to watch movies. To solve that, we have rampant and unchecked piracy. For everyone without a movie screen to service them, a secondary black market exists for bootleg DVDs which people watch in the comfort of their own home. The illegal route offers more convenience for lesser pricing.

Nigeria has a culture that lacks respect for, or understanding of, the value of intellectual property. Everyday, investors lose millions of dollars through a leaky distribution system. Without an efficient distribution model, returns are almost impossible. Except for those who can play politics, and strike business deals that ensure their films get distributed at peak times at the 45 movie theaters around the country. Not everyone has that level of connections.

There are also tribal sentiments and divisions within Nollywood. The industry is a combination of film industries primarily comprised of Nigeria’s majority ethnic groups. There are regional markets for movies in Yoruba, Igbo and Hausa (Kannywood) films. Those markets possess different distribution networks, and varying levels of access to key stakeholders. This results in skewed opportunities for viewing. Looking from the outside, you wouldn’t know understand the dynamics at play in a box office hits or that it should be strongly scrutinized.

2. Nigeria lacks the infrastructure to support long term gains of intellectual property assets, and the exploitation of the asset.

Let’s say you have a great film. It is beautifully scripted, produced by experts, finds a way into the country’s 45 theaters, and becomes a box office hit. Remember the black market? It is prolific. The cost of dubbing and packing a dozen copies of your average Nigerian film is about N150 ($0.50). Then let’s say those 12 DVDs are sold at N50, the pirate will make N600, easily coasting to a profit from his illegal enterprise.

This booming secondary market has history. During the early days of Nollywood, the black market was the film industry’s legal distribution. In the absence of government support, the burgeoning industry turned to informal markets to help them reach more people. Haphazard deals were struck, and no one really cared as long as the movie was moving. Unfortunately, this ended up being a deal with the devil. After a few years, the marketers discovered that they could make more as pirates. They illegally access the film, make copies, sell them and keep the profits instead of returning the appropriate percentage of profits to the original producers.

Over time, this system took on a life of its own, defying every effort to halt it. In a country where the average Nigerian purportedly lives on the equivalent of $2 or N720 a day, N150 is an affordable price to pay for a bootleg copy of the most recent film in theaters. The economics of piracy is really logical. When your average movie ticket, on a discount day is N1000, and at peak movie times, like Friday evenings tickets can range from N1500–2500, a N150 pirated copy becomes too attractive.

What do you do when the inefficiencies of a potentially vital industry are in trouble? You enlist the help of the government. In countries — including the US, Canada, UK, China, South Korea, and Japan — where Box Office numbers are significant, government policies are created to provide incentive structures, and bolster agencies actively involved and deeply invested in the film and television industry. These agencies serve to help the industry in a number of ways. Some provide subsidies or grants to production companies to reduce the cost of producing films. They might also become active in building theaters, or create strong legislation to protect intellectual property and enforce laws to curb theft. The government is crucial for protection and infrastructure.

I know first hand that many people in government still struggle with the idea that intellectual property assets are valuable. Nigeria has traditionally relied on oil and agriculture for decades. The idea of intangible unseen assets as a way to bolster the economy is hard to grasp for many people in positions of power and influence. This means that the laws that currently exist, and the people who make them, are insufficient in protecting the incredible amount of content pouring out of the country. In fact, it’s common sight to see serious filmmakers filing copyrights in foreign jurisdiction. That is how bad the legal landscape is at the moment. Sadly, there is no indication it will get better anytime soon.

3. The music industry is foreshadowing the challenges associated with a marriage between international corporations and local unstructured talent industries.

You might be thinking, why does this mean the industry will fail? After all, there is a lot to be said of private markets creating innovative responses to government inefficiencies.

Look closely at the music industry in Nigeria. Currently the industry has some major stars, both mainstream and indie. There are of course Wizkid, Davido, and most recently Burna Boy who are engineering a breakthrough into new markets. Major music labels; Universal Music, Warner Music, and Sony are all in Nigeria for business. But there is little improvement in distribution systems. While Apple Music exists on the continent, data is still incredibly expensive. Thanks the middle and upper class have the luxury of streaming music, let alone paying for a monthly music subscription.

These companies see a large youth population that could make for a lucrative market if it can be monetized through strong infrastructure, and an incredibly talented pool of artists who could be polished into world class performers.

Then you have the concert circuit. Given that Nigeria will have the youngest population in the world by 2050, creating experiences like concerts or outdoor festivals would seem to be the right way to go. However, infrastructural and security challenges are rife. Few cities outside of Lagos, Abuja, and maybe Owerri have venues or locations large enough to host the number of people necessary to make a concert turn a profit. The best concert experiences require organizers to fly in technicians from other countries due to the lack of technical training of sound engineers, and set technicians to ensure a quality experience. The recent challenges NATIVE LAND had during their December 2019 concert are enough to demonstrate that running a concert series in Nigeria is a risky path for show business in Nigeria.

So without an optimized distribution system, and localized technical resources, is any money being made? Labels take their best talent to foreign markets for primarily a strong diaspora audience. Having a viable international market for Afrobeats has resulted in packed concerts held in London, San Francisco, Houston, Atlanta, New York and more cities. They keep the lights on during the summer, while the locals get a taste during the December holidays.

This is not a long term strategy. These companies see a large youth population that could make for a lucrative market if it can be monetized through strong infrastructure, and an incredibly talented pool of artists who could be polished into world class performers. You need both to realize returns. That isn’t happening right now.

For the same reasons I have listed above, the music industry is contracting. Fewer artists are getting real deals. In fact, distribution is typically focused on foreign markets. The artists labels are looking for are those whose sound can translate abroad and are not necessarily great for the local market.

Netflix will come in to invest in the market because they have a strong appetite for experimentation. The company will do its best to work with a variety of talent. At some point they will realize (or maybe they already have) that the only market that will make them any money is the Diaspora audience. Because of that, the content being produced will eventually be skewed to satisfy that audience. The moment their Nigerian venture fails to make business sense, they will pull out. Since Netflix would have developed relationships with key stakeholders, they will sign deals with those individuals they trust, inadvertently creating an international monopoly for a few members of the inner circle. The film industry will contract, and the skills developed in the original commissioned content creators will not permeate throughout the industry. Some filmmakers will make a transition to the US, or the UK, others will stay home to dominate the market. Then the cycle inefficiencies will begin again.

Cancel culture crusaders will assert that the US tech giant is here to exploit local stories. They won’t be wrong. Netflix is in the business of distributing quality stories, they beleive there are stories to be told in Nigeria, so they are here to get in on the action. It is not their fault that Nigeria might not be able to fully take advantage of this capitalistic opportunity to strengthen Nollywood.

Am I thrilled about Netflix coming to Nigeria? Yes, I’m am here for our stories receiving international treatment. At the end of the day, this is the way of the world, what is local is global. At the recent Oscars, the Best Picture went to Parasite, a Korean flick. We have more and more examples that what is international is what is universal and Nigeria has universal stories to tell.

That being said, burying our heads in the sand about the maturity of our industry is will change nothing. Until Nigeria is ready to play ball, we should prepare for an era of cultural exploitation. The very best of Nigerian storytelling is about to be swiped by multinational corporations, packaged beautifully and sold back to us all at a premium. We will happily consume it, with smiles on our faces and hearts full of gratitude.

If we want to curate our stories, and decide what it means to be Nigerian, to be a member of the African continent, then we need to do more than just play ball with Netflix. We have to work to change the game.

Nollywood deserves better domestic laws. Key practitioners need to collaborate and strike partnerships that prioritizes the general health of the industry. We all need to tackle distribution, data costs, and piracy head on. In many ways, that means holding the government to account and demanding better support. There is something to be said for an industry that rallies together to petition the government with their combined might. Lastly, the diaspora has to become more than just an outpost audience, they need to become partners, co-producers, co-financiers and contributors to telling the Nigerian story.

Let’s stop raging on social media about the way things ought to be, and instead work towards a better reality. At the end of the day, that reality is what will determine who gets empowered and paid in this new global economy and nothing else.

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