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Smart Monkey says: The product of Nigeria’s creative industries (particularly film and music) are seen and heard all over the African continent and indeed globally. They have wrestled their way into this position of prominence through ingenuity and breaking the rules. On this basis, they are bidding to be taken seriously by investors.

Last week key players came together for a conference in Lagos: it was the 2nd Nigerian Creative Industries Expo entitled Investing In Nigeria’s Creative Economy, sponsored by the British Council.

The two biggest bits of Nigeria’s creative industries are film and music. Nollywood is said to be worth US$250 million a year and produces over 2,000 films a year. According to a World Bank study, it is Nigeria’s third largest sector after agriculture, retail and crude petroleum and gas and its 3rd largest exporter, contributing just over 10% of export revenues.

Nigeria’s music industry, based on rough estimates of CD sales through 10,000 outlets across the country, is worth around US$100 million, to which can be added US$10-20 million in receipts from live music ticket sales. See Obi Asika describing the industry:

Both sets of figures are “order of magnitude” rather than highly accurate and industry lawyer Efere Ozako, Maxaro Consulting expressed some skepticism about the Nollywood figures.

So what’s changed for Nigeria’s creative industries? The Nollywood figures above come from a study done by the World Bank that laid the ground for it giving US200 million to an entertainment fund. This financial contribution is unprecedented for the World Bank that usually steers well clear of content-related investments.

The money has been given to two Nigerian state banks to administer: Bank of Industry (BoI) and NEXIM Bank. Three investments have been made so fat: a cinema chain (which opens shortly); a distribution company run by existing Alaba players (more of what Alaba means later); and money into a relatively big budget film based on Chimamande Ngozie Adichie’s Half of a Yellow Sun.

Both banks – along with representatives of various ministries and the Central Bank of Nigeria – were at the conference and clearly paying attention. At the end, the representative from NEXIM Bank acknowledged that there might need to be an element of grant funding to seed developments, a point made several times during the event.

Nki Asika, Storm 360 (also founder of Enterprise Creative) opened the conference and laid out an agenda for the creative industries to pick up. She noted the challenges of high rates of piracy and the lack of capacity for scaleability. It was interested, she noted, that the international IPR body WIPO had been in the country the previous month, discussing a rights collection agency with the film industry. She pointed out that the arts part of the creative industries is largely supported by public funds in the developed world.

She said that the industry needed to come together for two reasons: 1) to form an effective lobby over key issues like piracy, training and distribution; and 2) to consolidate so that economies of scale could be achieved. She said that there needed to be a change of mindset to achieve the latter as people were always more comfortable being what you might describe as being “big fishes in a small pond”. Several speakers made this same point.

She noted a number of different potential investment opportunities: the need for high-spec film and music production facilities (to avoid this element of the production budget going to Europe and South Africa); the need for investment in content, especially film; investment in digital and mobile content platforms; investment in physical distribution; and using investment funds to create cultural quarters that would help revitalize parts of the city. For example, the Lagos State Government has set aside land to build a Film City/Village, something that would help raise the profile of the industry and make it easier to do business. (Currently on a bad day when there’s trouble on one of the bridges, it can take over two hours to get from one side of the city to another.)

Four key issues seemed to be in focus throughout the event: what was the authentic and original nature of the culture product Nigeria was creating; issues affecting physical distribution; the impact of technology on distribution and other aspects of the creative industries; and new models for innovation and investment:

“For things to change, everything must remain the same”: Italians are the Nigerians of Europe so it seems appropriate to quote one of the characters in Sicilian author Giuseppe Tomasi di Lampedusa’s The Leopard. Nollywood veterans Charles and Amaka Igwe (Bob TV, Igwe Studios) made the case that Nollywood had to stay true to itself and the stories that it told. They remembered the long history that had taken place and how it had not always looked so promising.

Charles spoke like a skillful politician, carefully touching all the vulnerabilities of those present: in turn, they cheered him to the rafters. Amaka, in a later session, made the point that those who had originally been trained to run the state broadcaster became the people who in turn trained the next generation and so on: these were “people trained by people trained in 1960.”

Unless you listened carefully, you might have thought that Charles Igwe was arguing against change and that others might have things to teach Nollywood. He made the point that when a Nigerian women was angry, she shouted as she did both in real life and in Nollywood films: it was no good trying to take on the more low-key acting style of Europe or the USA.

When we spoke, he made the point that if Nollywood took on the style and stories of other places, they would become indistinct in a world already crowded by many film-makers. From this perspective, there is a kind of “ur” Nollywood which you tamper with at your peril that represents all that is best about both the Nigerian way of storytelling and its considerable powers of survival in a world of plentiful competition.Ian Macleod used to say of Enoch Powell’s views that he caught the same train as him but got off at least two stops before him: I feel a little like that about Charles Igwe’s account of Nollywood.

There are several competing ideas of Nollywood, of which this is only one. There is a long list of film directors as various as Mahmoud Ali Balogun, Kunle Afolayan and Tunde Kelani who are all trying to make something different from the same Nollywood tradition. This matters for two reasons: firstly, the budgets of the pared-back, eternally surviving Nollywood movies fall short of the stories its creative talents could tell and secondly, no-one is really making much money from the industry. (This is also a point that speakers from music and fashion industries also made.)

The issue of quality raises its ugly head. As we noted in an earlier blog, the reviews of Tango with Me on the UK’s Radio 4’s Saturday Review gave some idea of how Nigerian film might be received by a non-diaspora audience. Most of the programme’s reviewers disliked the declamatory style of Nigerian acting and the rather over-emphatic plotting. But critic and novelist Paul Morley defended it as a different cinema language. Many of the same sorts of arguments raged around Bollywood a few years back but despite a number of Bollywood influenced mainstream films, it failed to break out of its diaspora audience. Once you learn one film language and grammar, it’s hard to learn another one.

Nigerian music stands a much better chance of making it globally because stylistically it hugs more closely the contours of the globally dominant hip-hop genre. D’Banj’s hit single Oliver Twist could easily be from the USA but if you listen closely could only come from Nigeria. 

According to a recent NOI Survey in Nigeria, 98% of Nigerians watch Nollywood: few countries have that kind of mindshare from the home crowd so Charles Igwe is right that you ignore them at your peril. But the audiences themselves are not a fixed point: they may not always like the same thing forever and a day. The survey respondents were asked how Nollywood could improve: 48% said storylines, 19% wanted production quality improvements and 17% improvements in acting.

In 2007 Cameroonian film-maker Jean-Pierre Bekelo released Les Saignants (literally, the Bleeders), Africa’s first science-fiction, lesbian vampire film.

Nothing as original in conception has been attempted since. Nollywood is in danger of being caught between its own genre which has many of the formal rules of Bollywood and trying to step out into something else.

One questioner from the floor asked whether it was possible to pass legislation to protect Nollywood and Nigerian culture. The truth is that cultures survive through the energy they attract from their people and their ability to swallow and spit out other cultures. That’s the point I was making about Nigerian hip-hop above: it’s taken only a few years for the artists to get on top of the form and make it their own. As Obi Asika noted, Nigeria has gone from listening to the music of others to listening to its own.

From Alaba to some other form of distribution: Almost all distribution of film and music in Nigeria is done through a large physical market called Alaba, which has its parallel in the Ikeja Computer Village. There are around 10,000 outlets selling CDs and DVDs but they are mostly supplied by wholesalers who buy from Alaba merchants who are known as “marketeers”: in effect, it’s a “cash-and-carry” wholesale warehouse system.

There are a number of drawbacks to the system. The merchants pay a one-off sum to distribute particular titles, which is in effect, an advance. However, it is in practical terms impossible to get any reckoning for what has been sold to reconcile this sum against sales income.

However, the Alaba marketeers operate within the timescale of piracy: everyone says that within 48 hours to a week, a title will be pirated. The lack of an effective and fast physical distribution system means that this window favours the pirates rather than the legitimate distributor. As in India, there are also dark mutterings that some of the Alaba distributors are almost certainly pirate distributors themselves.

Rapper LD (who was one of the participants in British Council’s initiatives to create tech tools for the creative industries run through CC Hub – see below) was a performer of some note who became fed up with seeing his income disappear in this way and has launched a physical distribution company that is seeking to provide not only goods like CDs and videos but also virtual goods like pre-paid airtime vouchers.

One of the investments made from the Entertainment Fund has been to an Alaba distributor to set up a physical distribution network.

Segun Demuren, Empire Mates Entertainment, the record label for Wizkid, described how its first three albums went to Alaba. For the first they were given N400,000 (US$2,510), for the second it was N5 million (US$31,377) and thereafter the same for each successive album.

He was approached by the new mobile music distribution platform Spinlet. The artist in question was worried that his music wouldn’t reach the same number of people. So they agreed to give it to Spinlet for a two week exclusive period and in that two weeks:”We did revenues that were equivalent to Alaba for the last four albums…Nigeria is the only country where the music industry have no hold on distribution.”

The other stronger leg of making a living as a musician is live performance and again the Nigerian way of doing things makes it difficult. Demuren revealed that the Eko Hotel (in which the conference was taking place) was one of the main music concert venues for Lagos and charged US$150,000 hire fee for a 5,000 person event venue:”This is more expensive than other international venues that we know.” Fly Time, one of the concert promoters makes N50-70 million a year but concert revenues have to be made up by sponsorship to cover all costs.

See rapper LD on how performers make a living in Nigeria:

Technology and online platforms: The glimmer of light on the horizon for Nigerian distribution has been online platforms, most famously iROKO Partners (for Nollywood movies) and its musical brother, iROKING. The company has had investment from Tiger Global and Kinevik.

Michael Ugwue, CEO, iROKING spoke about how it was seeking to develop a two-tier distribution model: free supported by advertising and premium content paid for by the user. He described that they had spent a lot of money on apps for smartphones but now believed that featurephones were where the biggest of the market would be found. It had also spent a lot of time on legal actions to ensure it could hang on to its rights.

See interview:

He told a very telling anecdote about a musician who approached them and said that he was already being distributed by iTunes and could they help him get his money from it as he didn’t know how it had happened? As it transpired, someone completely unknown had simply put the tracks up on iTunes and was drawing down the income. iROKING was able to intervene effectively and make sure the income came to him.

Initially iROKO Partners was largely focused on diaspora Nigerian audiences but since it started a little over 12 months ago, it has seen its home country Nigeria go from 12th by share of views to sixth position. With fast mobile broadband on its way through LTE ( ) the 27% who are currently making mobile searches to it, will soon be using it.

Old-fashioned film-makers were disbelieving that anyone would watch movies on their phone but just wait and see. In a conversation with Afrinolly, a mobile online curated platform with 1.5 million users, it told me that 70% of what was viewed was movie trailers and 30% was music. It is hoping to pioneer short form films and is running a competition to encourage makers. When asked what content was most popular, he laughed and said:”Their taste is insatiable. There’s no particular genre. They just like new content.”

Michael Ugwu’s cautionary note really struck home: “The last thing we want is a digital Alaba.” But as Obi Asika said:”Technology is the key to the future.”

New forms of innovation and investment: The challenge is to get all the Nigerian energy that Lagos seems to generate and focus in ways that will make profitable creative businesses. Femi Lange, co-founder CC Hub (@femilange) remarked that:”It is often said that Nigeria is a graveyard of good ideas. There is a need to create an enabling environment. For every good idea, there’s a whole lot of crap ideas. The pipeline for talent in Nigeria is very thin because people are not investing in the early stage. It needs money that’s patient. Often as little as US$5,000”.

CC Hub has hand grant funding (from the Indigo Trust and the Tony Elemelu Foundation) to create a physical incubator space (in Yaba) and an innovation programme. It will fund 20 early start-ups (6 have been funded so far) and the Tony Elemelu Foundation has first right of refusal to invest in them.

See also another innovation hub in Lagos:

It worked with the British Council to run a process to create technology tools (called Culture Shift) for the creative sector, several of whom spoke at the event. It seemed a good way of getting businesses thinking online and having the means to quickly make sense of it. One of the platforms was an actors’ audition web site that would allow casting directors to see acting clips and search by different criteria.

He described CC Hub as “big on experimentation” and recounted how a rainstorm had taken the roof off the police barracks next to their building. It had offered to help raise funds online and within two weeks had done so.

Nki Asika, Storm 360 identified a range of financial instruments that could support the creative industries including: favourable tax regimes, concessions, rebates, exemptions, and risk reducing measures like completion guarantees. WIPO was in Nigeria last month discussing with the Nigerian film industry how to create a collection agency. The banks entrusted with the US$200 million Entertainment Fund made much the same offer.

A key issue is one of scale and valuation as most of the companies in the creative industries are small and lack the formal record-keeping required for investment. Also as Shegun Demuren observed, who would have invested in Wizkid when he was first starting out?

Efere Ozako, Maxaro Consulting, probably one of the few lawyers specializing in creative industries work told the conference:”Passion has driven the industry so far. Knowledge needs to drive it in the future”.

Obi Asika, Storm 360 proposed starting a Creative Industries Council to pick up the many challenges and opportunities covered by the conference. It now remains to be seen whether the considerable strengths of Nigerian culture – its overwhelming self-confidence, its ego-drive and its considerable charm – will turn out to be weaknesses when faced with persuading everyone to come together to professionalise and grow the industry.

1 year ago