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The Economics of Nollywood

On Tuesday, September 13, 2016, thousands of people descended upon the Rock Cathedral in Lekki, Lagos, honoring an open invitation to witness the premiere of a Nollywood movie. It was the first public screening of 93 Days, a Steve Gukas film that tells the story of Nigeria’s battle in 2014 to contain and stave off the national threat that was Ebola. Movie celebrities posed for red carpet camera shots, public officials strutted about the church complex, and the regular people watched them all, thinking many different thoughts about what they were seeing and anticipating. A distinctively secular festive mood enveloped the house of worship, as the high and mighty came within touching distance of the average-guy spectator. It was more than just a movie premiere; it was the celebration of a film industry that was finally finding its voice. Nollywood was coming alive, and Nigerians had reverently come to pay homage to a representative of its finer precincts.

The premiere at House on the Rock would have been explained away as a one-off if 93 Days had been just an unusually good product from an otherwise poor quality industry. But in 2016, there were many others. Movies like ’76, The Wedding Party and A Trip To Jamaica fared rather well with the reviewers and were absolute hits at local cinemas. The Wedding Party went on to smash the Nollywood movie earnings record, grossing over ₦450 million (in doing so, it left even big-budget Hollywood movies dead in its wake, with Captain America and London Has Fallen struggling far behind in the fight for Nigerian cinema-goers’ attention). Eight Nigerian films premiered at the Toronto International Film Festival in Canada; many of them got sold out.

Nollywood isn’t stopping at being the world’s third-largest film industry; it’s defining entertainment on the African continent and making a claim for greater significance on a global front. Many culture pundits- including some in the traditional bastions of filmmaking in the United States -are beginning to take notice.

To think that this multi-billion dollar industry was once spiraling down the abyss of chaos, assailed as it was by multiple foes.

Nothing paints the picture of Nollywood’s unseverable links to the general Nigerian economy than the industry’s thriving during the oil boom of the mid-1970s and its nosediving fortunes following the economic collapse of the 1980s. At the height of the petrodollar-driven prosperity forty years ago, cinemas were packed with financially comfortable Nigerians seeking the pleasure and thrill that movies local and foreign could give. The Government’s indigenization policy opened up a new world of opportunities for directors, screenwriters and actors to explore and profit from. Things were looking up. But the oil glut came, the flow of cash dried up, and people stopped going to the movies. By 1999, the cinemas were all dead.

Although Nollywood has emerged from its darkest days, it’s still being haunted by many of the demons that strangled it in the past. Piracy, an unfortunate byproduct of the home video “salvation” that helped the industry stay afloat while the cinemas were shut, remains a big stifler of growth in the sector. Pirated DVDs are sold in stores across the country at a fraction of the original product’s price, making it almost impossible for movie producers to profit from their work. Not everyone has the resources or connections needed to create or feature in bigger movies like ’76 or The Wedding Party; the vast majority of filmmakers and actors (actresses) have to struggle in the lower, much wider, and far more perilous end of the market, where funding is thin and pirates reign supreme. For many in this uncelebrated backwater of the Nigerian film industry, making ends meet is a real battle. This is the reality you’ll find lurking in the shadows of the proclaimed renaissance of Nollywood, beyond all the hype about expressive Nigerian art going global.

One problem that hasn’t gone away with the passing of time is the absence of a proper movie distribution channel. It’s extremely difficult to track movie sales because the film vendors aren’t captured in any official system. This makes it hard to speak meaningfully of a movie “industry” beyond the confines of stakeholder guilds and cinemas. Outside this safe zone, the pirates roam freely, undeterred by the efforts of law enforcement agencies to cull their nefarious activities. The internet has added a new, threatening dimension to things: you no longer need to take a trip to the cinema to see that new movie; it’ll pop up online somewhere, and you’ll watch it- for free.

In spite of its faults, Nollywood continues to defy the odds. As of 2014, it was worth $5.1 billion- an indication of increased patronage resulting from a general improvement in the quality of films being produced. The industry also employs a large number of people (the exact number is uncertain, although claims of over a million direct and indirect players in the film business have been made). A revival in the cinema culture was sparked in the 2000s; the Silverbird Group, seizing an opportunity brought about by a growing middle class and a population increasingly adopting western lifestyles, opened several modern cinemas in major cities, and soon began showing Nigerian movies. They were followed by others. Higher quality requirements from these cinema houses meant that local producers had to make better films to stand a chance of having their movies screened in them. Because the market created by the cinemas was obviously lucrative, filmmakers complied by churning out better movies. The benefits have shown in the capture of market segments which previously snubbed local films in favor of Hollywood blockbusters. Consumers have spent to get tickets, and revenue thresholds have been exceeded.

Nollywood’s leading voices incessantly call upon the Government to “come to their aid” by “creating an enabling environment” for the industry to thrive. Their calls haven’t gone unheeded. In 2010, the Goodluck Jonathan administration launched a ₦30 billion intervention fund for the creative and entertainment industry, aimed at helping Nigerian filmmakers with training, funding, and infrastructure. Another program- “NollyFund” -was launched by the Bank of Industry in 2015 to make loans available to film producers. More recently, a ₦100 billion free TV distribution network for Nollywood (courtesy the Federal Government) is said to be in the works. But the chorus from the industry seems to be that these moves, though laudable, are not enough.

Perhaps Nollywood need not depend on taxpayers money for a break. Collaborations with private sector businesses (as seen in movies such as 93 Days) could help solve the funding problem. Afterall, as Reno Omokri points out in an article for The Vanguard, Nigeria’s films are its major cultural export, loved and appreciated across the African continent. Surely, businesses can do with leveraging the potential selling power of a resurgent Nollywood!

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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