GEM SUPPORT TO THE ENTERTAINMENT INDUSTRY
Nigeria’s entertainment and media market grew by 19.3% in 2014 to reach US$4 billion. It is estimated that by 2019, the market will be more than twice as big, with estimated total revenue of US$8.1 billion. The Entertainment industry in Nigeria comprises of home video/film/television and radio, performing arts, music, visual art, other allied businesses and supporting non-art sectors that provide various services.to support the businesses. However, GEM project’s support is focus on Nigerian film and music industry.
The history of the Nigerian film industry dated way back to 1903 when the first set of screened films was released. In its earliest days the industry produced films on celluloid for theatrical release in cinemas. Upon independence, the cinema business expanded rapidly. At the end of the cinema run, and with the advent of cartridges, movies were distributed on VHS for homes viewing. In 1992, the release of the straight-to-video movie ‘Living in Bondage’ launched the home video market in Nigeria and the present-day Nigerian film industry referred to as ‘Nollywood’. Nollywood grew quickly from straight-to-video model of the 1990s and 2000s to become the second largest film industry in the world (gauged by output). “Nollywood” at its beginning mostly featured Igbo language features, but gradually made a transition to a largely English language industry in order to satisfy market demand from all around Nigeria.
Within same era (early 1990s), the Kano movie industry began to emerge giving birth to what is called ‘Kannywood’ to compete and rival the Nollywood products, especially for Hausa speaking Nigerian audience that do not speak English. The original roots of the Hausa film industry however lies in the 1960’s with the productions of the then popular RTV television broadcaster. The film production talent developed Kannywood by adapting the successful Nollywood model for the Northern market. Popular actors and producers began to emerge from the Northern Nigerian decent. Presently, Kannywood produces about 30% of total number of movies produced in Nigeria yearly. On the western coast a large market is also served by Yoruba movies which tend to be based on Yoruba culture and upon times spoken in English and pidgin. Most recently, there seem to be a merger of these industries with their actors all melting in Nollywood. In the early 2000s the distribution of film underwent a transition with the development of new film technology: VCD and DVD players and discs which replaced the VHS tapes. The Alaba International market became the hub for film distribution in Nigeria, mainly with the financial backing of Igbo traders who were the major investors in the film production business. It is common knowledge that piracy is rife in the distribution of VCD and DVDs in Nigeria, and bootleg copies of movies are available and sold in full display in Alaba market and all around Nigeria. It is estimated that the industry loses about 3 billion dollars every year to piracy which is encouraged by the present lax distribution system in Alaba. As presently structured, movie producers and copyright owners work with partners in the market to contract dubbing companies who produce official DVDs. Unfortunately, this system of distribution has not been very successful in generating returns to the copyright owners, because pirated copies (reprinted illegally by unscrupulous partners) can flood the market on the same day the copyrighted films are released into the market or the day after.
Since the resurgence of the cinema business in Nigeria, pioneered in the early 2000s by a major entertainment business in Lagos, a number of Nigerian movies have chosen to premiere cinematic releases before subsequently exploiting other forms of distribution (after the cinematic run). Video CDs, TV runs, festival screenings, satellite TV On-Demand subscriptions, and internet downloads are the primary and secondary forms of distribution available to movie industry producers and owners of movie Intellectual Property.
With the popularity of cinema multiplexes as the major form of introducing movies to the public, the audience is demanding more quality from Nollywood movie productions. Some have referred to the slew of better produced glitzy Nollywood movies that now compete for screen time with the foreign productions in Nigerian cinemas as the “New Nollywood”. In “Old Nollywood” a movie made on a $40,000 budget could rake in $300,000 from VCD sales — which could quickly be plowed into more productions. It is now normal for major Nollywood cinematic movies to have budgets ranging from upwards of $750,000 to $2,000,000 dollars. With the increase in moviemaking costs arises the need to boost investor confidence and assurance in the profitability of the Nigerian movie industry through verifiable, structured and secure means of distribution.
Due to poor enforcement of copyright laws, poor distribution system, and an inefficient value chain, the revenue stream of Nigerian movies is undersized compared to other major movie producing nations. Nigeria currently has about 130 movie screens compared with about 13,900 screens for India and almost 40,000 screens in the USA. An average blockbuster movie production in India recovers its production costs during its initial theatrical release in the country’s cinemas- before going on to derive revenues from secondary revenue streams. Also South Africa, which produces fewer movies (25-30 movies a year) than Nigeria (more than 1000 movies a year) generates $2.5 billion in income compared to $3.3 billion for Nigeria each year.
In view of recent advancement in technology as well as heightened consumer’s expectations for easy access to quality movie content, a viable film industry in Nigeria requires a re-valuation of marketing strategies and channels. Low capacity, poor law enforcement, as well as a failure of the film distribution system in Nigeria has been responsible for huge losses to filmmakers and the Nigerian economy. While the increase in the number of cinema multiplexes has resulted in increased revenue for film makers, Nigeria has not achieved its true potential (130 movie screens for a country of 180 million people is poor compared to other major movie producing nations). With regards other means of distribution, by some estimates, 90 percent of the video CDs sold in Nigeria are pirated copies. Also, there now is a growing importance of online VOD platforms.
On the other hand, it is estimated that Nigeria’s music industry was worth $47 million (14 billion Naira) in 2015 and should rise to $86 million (26 billion Naira) by 2020 (According to PWC Media Outlook Report). The Nigerian music industry and allied businesses generates the most revenue in the Nigerian entertainment industry. Nigeria’s total music revenue is largely dependent on music concerts, artist product endorsements, internet downloads and ring back tones. The direct CD sales and distribution sector generates very little income for the industry with music labels and artistes largely giving out their music for free while depending on generating income from the earlier mentioned revenue streams . Ringtone download is the biggest source of revenue for the industry, and that segment alone has earned the top grossing Nigerian music artistes up to $350,000 a year.
Nigerian music and musicians have however generated a huge following in Nigeria, Africa and the world at large. Nigerian musicians are selling out music venues around Africa and the world and dominating major international award ceremonies. Some the biggest stars have also scored chart-topping collaborations with international super stars. using selection criteria that included popularity, sales, awards, YouTube views, show rates and social media numbers, .Recently, Forbes Africa rated Nigerian musicians top of the list of Africa’s biggest artists. .
The music industry encounters multiple issues including , low quality of the content, non-application of the legislation related to intellectual property rights, highly unsophisticated and under-developed value chain and distribution systems and piracy. As a result, revenues from music content are not equally and fairly distributed across the value chain (creators, producers, content aggregators, distributors, vendors), which discourage creators and producers to invest more in the music industry.
There is significant scope for innovative revenue models and technologies that would be of help improve the overall revenues for the industry.
The objectives of the GEMS intervention are to: (i) improve the protection of intellectual property rights (IPR); (ii) strengthen formal marketing and distribution channels; (iii) increase access to equity and loan finance; (iv) improve management and skill training; (v) develop leasing and equipment hire services; and (vi) develop the national film institute to serve as a center of excellence.