Nollywood may be the planet's third biggest film industry after Hollywood and Bollywood but it is feeling the squeeze. Despite the brio with which it churns out new films, times are hard and the returns are not good. By Russell Southwood
A sign of this pressure is that this week the Film, Video Producers and Marketers Association of Nigeria (FVPMAN) declared that it would try and stop DStv's Africa Magic channel from showing Nollywood films before they were released elsewhere. Russell Southwood look at Nollywood's success has been its own downfall in some ways.
Many Nollywood productions are actually shot as 13 episodes for a TV series. Production budgets are extremely flexible and productions are completed with within 4-6 weeks. Because the production cost is for a series, the overall production cost is lower than it might be for a one-off production (US$10,000-15,000). Marketing spend is left largely in the hands of the "marketer" (distributor) and not much is spent.
The majority of revenues come from selling VCDs or DVDs through a distributor who takes between 50-66% of the revenues from sales. The level of sales required is high and is particularly vulnerable to being undermined by the selling of pirated copies. Sales range from as low as 10,000 to around 2 million, although increasingly the big run sales have not happened.
Although there are a small number of cinemas in Nigeria, these have until recently played little or no role in generating revenues for producers. There are two large multiplexes in Lagos, mostly attended by the young middle-class. The majority of the films projected are Hollywood movies. There are only a dozen formal cinemas in the major Nigerian cities and 99 percent of screenings are therefore in informal settings therefore box office receipts remain marginal.
Most film viewings take place in informal video parlors throughout the country. Video parlors are usually small huts, barracks or community halls where local entrepreneurs buy a TV set and VCR or VCD player, and play the film for a small fee to each viewer. According to the NFVCB, there are 68,412 registered video parlors with a further 200,000 unofficial parlors. So it is not that there is not a market for publicly viewed cinema, it is just that it is not available at a price the population can afford.
This week the Nigerian movie marketers under the aegis of Film, Video Producers and Marketers Association of Nigeria (FVPMAN) announced unilaterally that from May 1, no movie that is capable of being released through their "conventional distribution channel" would be assigned to any broadcast station in the country.
FVPMAN said they will formally write to DSTV and other pay TV stations operating in the country about their decision, stressing that the activities of these broadcast stations have not only reduced the purchase of Nollywood movies but also, have affected the entire business of movie making. Since the number of Pay TV subscribers (even including those who pirate a signal) is relatively modest, this is tantamount to blaming the wrong person. The tail that should be put on the donkey is on the chaotic "conventional distribution channel" which outlined above. Also since a good number of Nollywood productions are made for Free To Air broadcast, it is hard to see how this release window proposal can really be enforced.
FVPMAN should really look to put their own house in order and craft a strategy that expanded the amount of revenues Nollywood producers got from cinemas (by encouraging their expansion) and found ways of recovering income from the informal video booths. Depressingly, neither is likely to happen any time soon.