Increased foreign investment in the wake of the purchase of a Nollywood studio by Canal+ could be a game-changer for Nigeria’s already thriving film industry. Will McBain looks at the prospects for a sector targeted to make $1bn in export revenue by 2020.
Nollywood has begun the biggest financial makeover in its history with this summer’s acquisition of Lagos-based production house ROK film studios by French media giant Canal+.
The studio was bought from Africa’s largest subscription-based video-on-demand company IROKOtv, whose founder Jason Njoku called the sale the “largest media deal in West African history”. Actress and producer Mary Njoku – Jason Njoku’s wife – founded ROK studios and will stay on as director general under the Canal+ acquisition.
Canal+ says it will now be “present across the entire Nollywood value chain,” while retaining its substantial stake in IROKOtv, as the company looks to cement its position as the largest foreign investor in African cinema.
Speaking to African Business, Njoku said that the acquisition of ROK by a global player “was really a validation of our strategy, which was to obsess over content. We built and exited a content production studio in five years. This is unheard of in Nollywood.”
Nigeria’s film industry has enjoyed rapid growth since 1992, when an unemployed film graduate working as a street hawker joined forces with an electronic goods trader with a large stock of blank video cassettes. The two entrepreneurs produced the home movie Living in Bondage in just two weeks, returning a $140,000 profit from a $1,000 filming budget within a month.
The film sparked the revival of the domestic film industry, as production teams sprang up throughout Africa’s most populous nation. A symbiotic relationship between producers and marketers soon emerged, building the world’s second largest movie industry by output, and third largest when measured by revenue.
According to PricewaterhouseCoopers, the industry makes up a significant part of the arts, entertainment and recreation sector, which contributed 2.3% to Nigeria’s GDP in 2016. It was one of the priority sectors identified by the Nigerian government for economic recovery during the 2016 recession, with the sector targeted to make $1bn in export revenue by 2020.
The rapid expansion and nature of distribution – most of Nigeria’s cinemas closed during the economic downturn of the 1980s – encouraged piracy, hitting production quality. Until recently the industry kept foreign investors at arm’s length, despite Nollywood attracting huge numbers of loyal fans throughout the continent.
While the paucity of funds negatively impacted the production quality of the films, the emergence of streaming services, an improvement in technical skills and a new generation of talented Nigerian filmmakers have resulted in more capital being pumped into Nollywood, piquing the interest of major global firms. Chinese pay-TV operator StarTimes exports Nollywood films within the Chinese domestic market with its ST Nollywood Plus channel.
An increase in foreign investment could be a game-changer for the African media industry, and good news for creative talent and distributors. Greater returns for actors, directors, and financiers are expected to follow, while Nollywood fans anticipate bigger budgets and increased animation and special effects.
Competing on a global scale
“Our main target is to produce pleasing content for African subscribers, but I believe naturally and organically Nollywood will reach a level where some of their movies and productions will compete on a global scale, and if we can contribute to this evolution it will be amazing,” said Cédric Pierre-Louis, director of programmes at Thema, part of the Canal+ Group that oversees the distribution of pay TV services in Africa.
The IROKOtv and Canal+ tie-up also hints at the growing popularity of Nollywood in French speaking Africa. The French company owns Nollywood TV, a subscription service launched in 2012 that shows French-dubbed Nollywood films and TV shows throughout Francophone Africa.
“We were already producing some TV programmes and movies on the African continent,” said Clémentine Tugendhat, senior vice president for internal channels at Thema. “But this is the first time we’re going to do it on an industrial mode, meaning a few hundred movies per year, plus several TV series. So that’s a real opportunity for the Canal+ group”.
IROKOtv’s Jason Njoku has similarly ambitious plans. He’s set a target of over a million paying online subscribers, and may be eyeing a listing of the firm.
Njoku’s dramatic subscription growth has been made possible by an increase in broadband penetration in Africa alongside a fall in the prices of smartphone handsets and data plans.
The firm hopes to pump more funds into marketing and telesales to boost its 400 call-centre staff in Accra, Ghana, and Lagos, and plans to explore other markets in a bid for further subscribers.
“We know we have the content, and we have the platform, we are just waiting for a more enabling environment for people to subscribe,” said Njoku.
As the thriving industry expands, the need to re-skill is becoming paramount. Companies like Del-York Creative Academy have stepped up to fill the void, offering courses ranging from drone flying to acting and 3D animation at their film school in Nigeria. Instructors from Hollywood are flown in to provide training and workshops, while graduates gain experience and jobs in the US and British film industries.
“Re-skilling Africa is far more important to the future of the creative industry than foreign capital. If we re-skill Africa and build the proper institutions of education and networks for our talent then we will not only attract foreign investment, we will have the power to choose what is truly best for the continent. Talented people are Africa’s greatest resource, hands-down,” says Del-York International CEO Linus Idahosa.
Netflix shows an interest
Nollywood’s dynamism has not gone unnoticed by the leviathan of the video-on-demand industry, Netflix. Earlier this year, the American company joined the battle for subscribers on the continent by buying the rights to EbonyLife’s Nollywood production Chief Daddy – a feature-length drama about the madcap scramble among relatives for a dead billionaire’s estate. The film is one of an increasing portfolio of slicker productions from Nigeria which the firm is making available to some of its 150m global customers.
As Increased technological improvements counter frustrating buffering, and locally based servers quicken download speeds and reduce costs, the battle for the new media landscape is likely to heat up.