"Coming together is a beginning; keeping together is progress; working together is success." – Henry Ford.

There are many factors that may affect the success or otherwise of any industry, some of which include the ability to create best value at the lowest cost, good product features, the availability of resources, a market, and processes and systems that make it relatively easy for the different parts of the industry to function together. The Nigerian Film Industry (popularly called Nollywood), may not be able to boast of many of the above factors, but we have seen the industry continue to grow and develop, receiving global recognition as the second largest film industry in terms of films produced annually (only next to Bollywood and above Hollywood), valuation of over $6billion (although definite public data to support this is difficult to come by), and continuous popularity in local and foreign markets.

Over the last 12months alone, global streaming giant Netflix has added an average of five to six Nollywood films onto their platform monthly. This continues to increase the reach of Nigerian content to a global audience. In 2021, in the midst of a global pandemic, Funke Akindele-Bello's "Omo Ghetto" surprised the Nigerian entertainment scene by grossing over NGN630million in Nigerian cinemas, making it the highest grossing Nigerian film of all time. In 2020, Nigeria had its first successfully submitted entry to the Academy Awards (the Oscars), and though the country's submission, Desmond Obviagele's "The Milkmaid" didn't eventually get nominated, this and the previously highlighted points are indicative of an industry whose trajectory is looking upwards.

In a 2017 Article by Stears Business, the author proclaimed that there was no better time to invest in Nollywood. This is probably still the case. However, there may be a tendency for potential investors to focus on the sector of the industry with the most exposure - production of feature films for cinematic, video on demand or streaming exploitation, while ignoring the other parts of the industry that actually make the wheel run. This means that potential investors may simply be looking to fund feature film production budgets with the hope that these films make enough return on investment and boast a profit (which is not always the case).

A quick highlight of some other sub-sectors within Nollywood, which investors could consider include:

  • Writing: from script writing, story development, editing for tone / language, to even translation and subtitling. These are very important to the industry because without stories there is no Nollywood. Companies may be able to invest in the acquisition of the IP rights to well established stories (e.g. Play Network acquiring the rights to some old Nollywood classics and going a step ahead to remake them). Investors could also fund companies that represent/hire writers for story development / creation of film or TV treatments, and script writing.
  • Equipment leasing: Filmmaking requires equipment. Modern filmmaking may require some state-of-the-art equipment that cost significant amounts that would destroy the budget of a singular film. Based on the foregoing, many filmmakers seek out companies who can lease them such equipment for the duration of their production without incurring the heavy investment required to purchase the equipment.
  • Production and set design
  • Wardrobe and costuming
  • Music licensing and creation of original music, sound design and scoring
  • Casting services
  • Editing – including modern editing suites
  • Visual effects
  • Stunt coordination
  • Location recceing services and provision of sets
  • Entertainment legal services
  • Production accounting services
  • Talent management
  • Entertainment marketing, and public relations
  • Short film production
  • Music video production
  • Production of tailored films for advertising, public relations.
  • Documentary filmmaking
  • Distribution
  • Exhibition: either in terms of cinemas, TV, streaming platforms etc.

The above list is nowhere exhaustive. In fact, the standard feature film production will have many of the sectors above as part of its budget. Which means that, an investor in one of the businesses above is making money during the value chain of feature film production and can provide services to the multiple film productions being undertaken annually. In reality, some of the above sub-sectors have received attention from potential investors – the industry has seen investments in equipment leasing, exhibition, distribution, talent management. However, a good number of sectors still lack structure and are handled by individual practitioners who may not have a proper business structure in place (some individuals have built good businesses for themselves though).

Going back to my opening quote by Henry Ford; it is important that as Nollywood continues to develop and grow, the different subsectors come together with better business structures which will likely be bolstered by wealthy or institutional investors who can combine their funds and business acumen with the skill of industry practitioners. Thereafter, there is a need for these different sectors to keep together, by engaging in transparent business practices in a competitive environment. The government has a major role to play in this with adequate regulation, improvement of the ease of doing business, and improvement of the local incentives at the federal and state levels tailored towards the operations of the film industry (especially considering that many businesses within the sector are small businesses).

Lastly, all sub-sectors will need to work together to achieve the level of success that Nollywood desires and deserves. This will continue to improve as more transparent positive return on investment is recorded on products created / services rendered, as more investors continue to plug into the different sectors to ensure that the different parts are able to meet the developmental needs of the industry, and as more income streams are birthed for the industry e.g. increase in streaming/licensing revenue for content creators etc.

The future of the Nigerian film industry looks positive. More and more international practitioners are showing their interest. Apart from Netflix, that has amassed Nollywood content on its platform and is set to release its first Nigerian Original Limited Series in Kemi Adetiba's "King of Boys: The Return of the King", HBO recently released its first Nigerian based Original Documentary. Amazon is touted to be making its own moves, and other international agencies and companies are working towards harnessing the Nigerian market. It is therefore important that Nigerian investors carry out proper evaluations of how they can plug into the industry at different levels to get in on the ground floor, establish local businesses and own the industry, rather than allow foreign investors take all the risks and reap the chunk of the potential returns.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.