Wednesday, September 15,
2021 / 11:21 AM / by FBNQuest Research / Header Image Credit: FBNQuest
Our chart below, drawn from data from the National Bureau of Statistics, shows the trend of film production in Nigeria. The Nigerian film industry (Nollywood) is a significant part of the arts, entertainment and recreation sector of the economy which, as shown in the chart also, contracted for four consecutive quarters (Q2 '20 through Q1 '21) before making a small recovery of 1.2% y/y in Q2'21 as restrictions on cinemas and filming locations eased. The number of films produced rose to 635 in Q2 '21 compared with 416 films in the previous quarter and 626 in the year-earlier period. Nollywood represents a potential growth driver for the economy - it was one of the priority sectors identified in the 2017-2020 Economic Recovery and Growth plan. Its success hinges on addressing the sector's challenges and exploring the possibilities presented by the "new normal".
The Nigerian film industry is the largest in Africa in terms of value, number of annual films, revenue and popularity. It is the second largest film producer globally, second only to India's Bollywood. On an average, Nollywood produces over 300 films per quarter.
At the peak of the pandemic where cinemas were shut and mobility restricted, the number of films produced recorded a significant increase. Our explanation for this is that film producers took advantage of the pandemic-fuelled video streaming trend on platforms like YouTube, Netflix and other indigenous digital platforms. Netflix recorded additional 37 million paid memberships last year.
Piracy tops the list of the film industry's many challenges. According to the World Bank, for every legitimate copy (of a Nigerian film) sold, nine others are pirated. In the digital era of today, piracy has morphed into illegal download and distribution of movies without paying for them. Weak enforcement of Nigeria's copyright laws has further empowered these acts.
Other challenges include lack of financing, poor infrastructure and inadequate capacity.
The key to unlocking Nollywood's full potential is in addressing the challenges (mentioned above). Given the recent popularity of video streaming, the industry must also take advantage of improving internet penetration to expand the reach of its offerings.
Collaborations and co-productions with global film producers is encouraged to increase the industry's exportable content and improve its visibility outside of Africa.
Sources: NBS; FBNQuest Capital Research