Nollywood is king but where are the princes?

Nollywood is king but where are the princes? A vibrant film industry can contribute significantly to a country’s national prosperity and create huge opportunities for employment. Yet in most African countries, with a few exceptions, there is limited state support available for filmmaking and few opportunities for training filmmakers. Alexa Dalby reports.

Film and video productions are shining examples of how cultural industries can open the door to dialogue and understanding between people, but also to economic growth and development, says UNESCO.

Indeed, part of Africa’s projected 5.2% GDP growth rate in 2013 was attributed just to the popularity of Nollywood, Nigeria’s prolific film industry. It’s the country’s second- or third-largest employer and the third-largest film industry by value in the world after Hollywood and Bollywood, generating an estimated $500-$800m annually. It creates over 1m jobs in a Nigerian population of 168.8m; at 6%, this is almost the same percentage as the industry does in the US.

Filmmaking can be a very lucrative activity. As well as direct income from the box office, co-productions and overseas sales, there is a multipler effect that increases income indirectly, estimated in South Africa as 2.89 times. It is also a good source of tax revenues: for example, in 2012 the South African government received $63m in tax revenue generated directly and indirectly by the South African film industry. The world’s leading film industry, Hollywood, is based in California, which has a GDP of nearly $41.3 trillion, more than all Africa’s 54 countries –$3.266 trillion in 2013. There is also potential for job creation at each stage of filmmaking and its value chain with its need for many kinds of technical and creative personnel; in development; production; creating local jobs at film locations; marketing; sales; distribution; and exhibition.

Globally, the film market generated nearly $100bn in 2012 and more than 75% of that was from movie theatres. Though the African film industry is growing fast, there are few cinemas in most of sub-Saharan Africa, so for the market to exploit its potential, it’s estimated Africa would need to develop 1,000 cinemas a year. In comparison, in US there are 40,000 cinemas – about 120 per 1m people; India has 20,000; China 13,000; but the whole of Africa has less than 1,000 – less than 1 cinema per million people.

New ways to reach global audiences
Apart from the lack of opportunities for exhibiting films, there are two main obstacles to the growth of the film industry in Africa.

A basic lack of funding, either public or private, results in few, or low-budget productions. There few intra-Africa co-productions. Most filmmakers seek their funding from grants or co-production funding from the rest of the world.

The nonexistent or poor distribution system in Africa for those films that do get made restricts their earning potential.

Without meaningful cinema distribution, directors are dependent on secondary income from pay TV and DVDs. An increasing number of upcoming producers are partnering with cinemas to ensure that they make more money from their movies.

With new technology, the growth of alternative distribution channels, Pay-TV platforms like DSTV have become popular avenues to get paid through royalties. A huge library of African films past and present is available online through South African subscription TV channel M-Net’s African Film Library.

Another distribution channel has become available with the increased internet access, and the future holds a lot of promise for independent filmmakers. As digital video technologies become more affordable, anyone can shoot and edit a film and publish it on YouTube. Internet movie distribution enables independent filmmakers who cannot enter the traditional distribution networks to reach global audiences.

The opportunities are there for smart entrepreneurs who can find solutions to all the problems and challenges. Demand is increasing and the potential is lucrative.

Yet another huge generator of revenue that is vastly unexploited as yet is intellectual property. The lack of enforceable structures to protect filmmakers’ copyright allows potential revenue to be lost to corruption, piracy and counterfeiting. Piracy is believed to account for more than 80% of distributed movies and be worth nearly $200m a year. South Africa estimates that it loses 44% of DVD revenues and 15% online.

Online distribution holds the key to breaking the stranglehold of pirates and will replace DVD as internet penetration increases and bandwidth becomes cheaper.

Unsurprisingly, the two countries with the two biggest economies dominate film production in Africa. Nollywood is famous around the world for its prolific low-budget output, and has a fan base covering Africa and the worldwide diaspora. Since re-entering the international community, South Africa has taken off as a base for production and location for international filmmakers.