Nigeria’s domestic film industry, popularly known as Nollywood, is one of the greatest African success stories. Nollywood began in 1992 with the advent of videotapes and video home systems (VHS), most notably through the production of Living in Bondage. The movie was directed by Chris Obi Rapu and starred Kenneth Okonkwo and Nnenna Nwabueze.
Now, Nollywood is a movie-making machine that churns out over 600 movies a year. Many are soap operas which are watched on television channels mushrooming across the continent. According to Unesco, the UN cultural organization, Nollywood is the second-biggest film industry in the world in terms of output, after Bollywood in India.
It is now also the country’s second-largest employer, after the federal Government. There are close to 200 million people in Nigeria, and more than 800 million in sub-Saharan Africa as a whole, most of whom are spellbound by Nollywood’s outpourings.
However, while the industry is booming with content production, the question, how do Nigerian movies make money is one that has intrigued many.
Well, I got you, as a graduate of Theatre and Film Studies, I’ll explore the various revenue streams available to Nigerian filmmakers, breaking down how movies move from production to profit-making.
How Do Nigerian Movies Make Money?
1. Traditional Nollywood revenue model
In the early days of Nollywood, the revenue model was highly dependent on direct-to-DVD sales. Nigerian filmmakers would produce movies on a shoestring budget, mass-produce DVDs, and distribute them through street vendors and markets. The industry’s low production cost and mass distribution through informal markets allowed filmmakers to generate quick profits.
However, the traditional model faced many challenges:
- Piracy: The informal nature of DVD sales meant piracy was rampant. Filmmakers often lost control of their intellectual property, leading to significant revenue losses.
- Limited audience reach: The audience was limited to people who could afford to buy DVDs or attend community movie viewings.
Today, the industry has evolved significantly, leveraging multiple platforms for distribution and monetization.
2. Cinematic releases and box office earnings
In recent years, more Nigerian movies are being released in cinemas, both locally and internationally. Nollywood’s improved production quality and compelling storytelling have attracted larger audiences to the cinema.
Some popular Nigerian movies that have broken box office records include:
- The Wedding Party (2016)
- King of Boys (2018)
- Sugar Rush (2019)
- Omo Ghetto: The Saga (2020)
- Lately, Tribe of Judah, grossing over 1 billion Naria
Cinematic releases provide a direct revenue stream through ticket sales, with box office earnings often being a substantial part of a movie’s revenue. The rise of multiplex cinemas across Nigeria and partnerships with international cinemas have increased the industry’s earning potential.
However, cinema releases have their limitations:
- High costs: Cinema screenings are expensive due to marketing, promotion, and the need for distribution deals with cinema chains.
- Short window: The lifespan of a movie in cinemas is short, usually around 6-8 weeks, after which other distribution channels must take over.
3. Distribution through VOD platforms
Video on Demand (VOD) platforms have revolutionized Nollywood’s revenue model. With the proliferation of digital streaming services, Nigerian filmmakers now have more control over their content and a broader audience reach. The rise of local and international streaming platforms has opened up new avenues for monetization.
Some popular platforms include:
- Netflix: Netflix’s entry into Nollywood has provided filmmakers with opportunities to reach a global audience. Nollywood originals like “Lionheart” and “Oloture” have been exclusively distributed on the platform, bringing in substantial revenue for producers.
- Amazon Prime Video: Another key player in Nollywood’s VOD scene is Amazon Prime Video, which also licenses Nigerian films for global streaming.
- iROKOtv: This Nigerian-based VOD platform is often referred to as the “Netflix of Africa.” It focuses on distributing Nollywood films and has built a loyal subscriber base, both locally and internationally.
- Lately, Nigerian filmmakers are exploring YouTube.
4. Licensing and international sales
Licensing deals with television networks and international distributors provide a significant revenue stream for Nollywood. Many Nigerian films are licensed to cable networks like Africa Magic and EbonyLife TV, ensuring that the films reach millions of homes across the continent.
International sales have also gained momentum, especially with the global interest in African content. Filmmakers can license their movies to foreign platforms and distributors, giving them an opportunity to tap into markets in the United States, Europe, and beyond.
5. Television rights
Television rights have long been a crucial revenue stream for Nollywood films. TV stations, both in Nigeria and across Africa, regularly purchase the rights to air Nigerian movies, helping filmmakers earn money even after a movie’s cinema run or DVD release.
Stations like Africa Magic, AIT, and NTA have been major players in broadcasting Nollywood films, paying for syndication and ensuring content reaches millions of viewers.
Read Also: How Much Does Netflix Pay for Nigerian Movies?
6. DVD sales and piracy issues
While DVDs are no longer the primary mode of distribution, they still play a role in reaching audiences without access to streaming services or cinemas. DVD sales continue to generate income, especially in semi-urban and rural areas.
However, piracy remains a significant issue in the industry. It’s estimated that Nollywood loses millions of dollars annually to illegal copies of movies being sold on the streets. The Nigerian Copyright Commission has taken steps to curb piracy, but it remains a persistent problem.
7. Brand sponsorships and product placements
Brand sponsorships and product placements have become an integral part of Nollywood’s revenue streams. Many Nigerian films incorporate product placements from brands looking to reach the vast Nollywood audience. By integrating products organically into their storylines, filmmakers can secure substantial funding from companies.
For example, brands like MTN, Glo, and Nigerian Breweries have invested in movies by paying for strategic product placements, which help reduce the production costs for filmmakers while also providing an additional revenue source.
8. Public funding and grants
Public funding for Nollywood has increased in recent years. The Nigerian government, recognizing the potential of the industry, has launched initiatives to support filmmakers financially.
- Bank of Industry (BOI): The BOI has set up a special fund to provide loans to filmmakers and other creative professionals, further enhancing the financial landscape for Nigerian movies.
These grants and loans help reduce the financial burden on filmmakers, allowing them to focus on creating quality content.
9. Crowdfunding
Crowdfunding has also emerged as a viable means of financing films in Nigeria. Filmmakers are turning to platforms like Kickstarter and GoFundMe to raise money for their projects. By leveraging their fan base and networks, filmmakers can gather the necessary capital to fund their movies, while offering exclusive perks to backers.
This model works particularly well for independent films or movies with niche audiences.
10. Merchandising
Merchandising is another growing revenue stream for Nollywood. Popular movies or franchises can capitalize on their fan base by selling branded merchandise such as:
- T-shirts
- Posters
- DVDs
- Soundtracks
This is still a relatively untapped market in Nollywood, but it has the potential to grow, especially with the rise of e-commerce in Nigeria.
11. Film festivals and awards
Film festivals offer Nollywood filmmakers an opportunity to showcase their work on an international stage. Festivals like the Toronto International Film Festival (TIFF), Cannes, and the African Movie Academy Awards (AMAA) provide platforms for Nigerian films to gain recognition and attract buyers.
Winning awards and gaining international attention at these festivals often leads to increased demand for a movie and opens doors to international sales and licensing opportunities.
Role of Government Policies and Regulations
The Nigerian government has recognized Nollywood as a critical industry for economic growth and cultural export. Over the years, the government has implemented policies and regulations to protect the intellectual property of filmmakers and create a more conducive environment for the industry to thrive.
- Tax incentives: The Nigerian Film Corporation (NFC) and other regulatory bodies offer tax breaks and incentives for filmmakers, helping reduce production costs.
- Anti-piracy laws: The government is also stepping up efforts to combat piracy through the Nigerian Copyright Commission (NCC), which has increased its crackdown on illegal DVD sellers and distributors.
Conclusion
Nigerian movies make money through a complex array of revenue streams, from box office sales to digital distribution and brand sponsorships. The industry’s evolution from a DVD-driven market to a global powerhouse is a testament to the resilience and creativity of Nigerian filmmakers.
While challenges such as piracy remain, Nollywood continues to grow, exploring new business models and international markets. As the industry becomes more sophisticated and technology-driven, the future looks promising for Nigerian filmmakers to earn even more from their craft.
Nollywood is not just a film industry—it’s a movement that reflects the dynamism, culture, and entrepreneurial spirit of Nigeria.
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