Communiqué 32: Netflix is eating Nollywood's lunch. What happens next?

As Nigerian movies began to gain affinity with the local cinema audience, Netflix and other streaming companies stormed into the picture.

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Netflix is eating Nollywood's lunch. What happens next?

Netflix is claiming Nigeria’s film industry. The company’s marketing slogan says “Nollywood is Home”, and while it might seem like this is a brand trying to identify with the local market, the platform and others like it are swiftly changing how movies are distributed in Nigeria.

Before Netflix, Amazon, and other streaming platforms wound their way into the hearts of Nigerians, Nollywood films were just starting to get the buy-in of the cinema audience. For years, the Nigerian film industry relied on home video distribution and struggled to grasp even 5% of the cinema audience, but the tide began to turn in 2014.

‘Nollywood is Home’ campaign poster. Source: Netflix

Kunle Afolayan is one of the directors credited with re-introducing big screen-worthy movies to the Nollywood audience, starting with his 2014 crime thriller, October 1. This movie, alongside other hits like Ayo Makun’s 30 Days in Atlanta (2014), its loose sequel A Trip to Jamaica (2016), and Kemi Adetiba’s The Wedding Party (2016), ushered in a new genre of Nigerian blockbusters and paved the way for filmmakers to confidently release more films to the big screen.

Movies like Merry Men (2018), King of Boys (2018), Living in Bondage (2019), and Bling Lagosians (2019) all generated significant box office buzz, far more than the local film industry was used to. Then, in 2020, the momentum shifted again.

Enter Netflix and the streaming gang

In 2019, Nollywood was able to convince about 40% of the cinema market that its movies were worth paying for, and just as they began to gain traction, Netflix arrived in February 2020.

With this, more streaming platforms gained the confidence to launch in Nigeria and acquire more local content.

Reflecting on the entrant of the new player, I wrote at the time:

“While the world is thinking about how Netflix is hurting the revenues of cinemas, Nollywood has issues beyond this. Already, Nollywood had an average of 20,000 people visit the cinema weekly in 2019, losing the remaining 70% of the audience to Hollywood.

“The industry (a $4 billion sector) has been struggling to build its own identity and audience base. It is at this point where although it is clear what the Nigerian/Nollywood identity is, we are leaning on the outside world for confirmation. At this time, the industry needs to recognise its powers and use the same, leading Netflix through the market and not the other way around.”

From 2014 to 2019, the trajectory for filmmakers was simple: they make their movies, release them in the cinema, and market the hell out of them. The formula was working, and the cinema audience was growing more accustomed to stepping out to see local movies. Until lockdown happened.

Lockdown, the party pooper

Much like the global market, the Nigerian audience was forced to stay home, meaning cinema visits were out of the question. Streaming services began to gain more prominence with the audience and filmmakers.

With COVID came uncertainty. No one knew precisely when the world would return to “normal”, including filmmakers. Therefore, moving straight to streaming or having a run in cinema and moving to streaming afterward became more appealing.

Because Netflix entered the Nigerian market just as COVID hit, this created an avenue for the audience to settle into streaming as cinemas were closed and the most popular Nollywood titles were already migrating to the platform.

However, two years after the lockdown, data shows that cinema attendance has returned to pre-pandemic levels, but people aren’t going mainly for Nollywood movies.

After cinemas initially reopened in 2020, movies struggled, given the pandemic restrictions. However, Funke Akindele’s Omo Ghetto: The Saga (2021) turned things around. At that time, Hollywood releases had about a quarter of their vigour as US studios were still recuperating.

A scene from Omo Ghetto: The Saga. Source: eelive

Suffering from pandemic fatigue and yearning to return to their previous routines, the cinema audience came out in full force in 2021. Ticket sales averaged 1.4 million to 1.5 million in the first half of the year.

In 2021, 39.3% of the tickets sold were for Nollywood movies, 0.7 percentage points less than the regular 40% market share they had worked hard to claim. But the bubble burst in 2022.

In the first six months of the year, Nollywood’s market share dropped to 25.8% despite ticket sales remaining at their usual average for the same period. The little increase in admissions counted in favour of Hollywood titles, leaving Nollywood films scrambling for an even smaller percentage of the cinema audience. The 2022 drop is an all-time low despite the stable rise in cinema attendance in the last five years.

In the first half of 2021, Nollywood clinched 964,523 out of over 1,491,000 tickets sold. Meanwhile, in the first half of 2022, it managed only 520,656 out of over 1,498,000 tickets sold, a 46% decrease from the previous year.

In 2021, titles like Omo Ghetto, Prophetess, Day of Destiny, Breaded Life, and Ayinla danced with the audience in the cinemas before exiting to streaming platforms. They held their own against films like The Hitman’s Bodyguard’s Wife, Godzilla, and Fast and Furious 9, among other Hollywood box office hits.

In 2022, ten Nollywood films opened the year struggling for space with Spiderman: No Way Home, which was in its third week. The top Nollywood movies were Christmas in Miami, Superstar, and Aki & PawPaw. As usual, cinemas were showing spillover holiday films snatching the last bit of coins in the first eight weeks of the year, while new ones struggled to find a corner to cash in from. By February, Nollywood’s answer to Jennifer Lopez’s Marry Me was Before Valentine and Dinner at my Place, which performed slightly above average.

There are always about 10 Nollywood movies in the cinema per time. While some films, such as Omo Ghetto, have thousands of admissions, others get only about ten people weekly. Tickets range between N1,200 ($2.89) to N5,000 ($12.04) depending on the cinema location, the movie’s publicity, and its weekly performance. There have been unicorns of some sort in the last two years.

In 2021, Funke Akindele’s Omo Ghetto defied expectations and earned over N636 million ($1,531,607) in total gross before making its way to a streaming platform. In 2022, Femi Adebayo’s King of Thieves made over N300 million ($722,456) in total cinema gross and will be streaming on Amazon Prime very soon.

What does this all mean?

The decline in Nollywood’s market share calls for introspection, and stakeholders debate several possibilities. Still, the question is, what is streaming’s role in this?

The answer lies in how the audience prioritises the content it pays for and consumes.

Data analysed by Inside Nollywood, a publication covering the Nigerian film industry, shows that the audience will primarily opt for free content first. In cases where it can’t get the content for free, it will then go for a bundle paid-for service. In this case, cable TV is the first choice because it has been around for a long time and remains a huge status symbol for a particular generation of Nigerians. Streaming platforms like Netflix, which allow password sharing and are new pop culture reference points for the younger generation, come next on the ladder.

Of the 1,000 audience members polled, 83% say they prefer waiting for movies to get on streaming platforms since most would anyway. They also say they prefer buying tickets to Hollywood movies with better production value.

Final thoughts

If the audience is beginning to depend more on streaming services to see Nollywood films, the filmmakers and other stakeholders have a heavy hand in this. They’ve created a system where movies make their debut on the big screen and go on to streaming platforms three months later. The wait is not unbearably long for the audience, especially if expectations are low.

This model is not wrong, as filmmakers need to hedge for better returns. However, this is the path for about 72% of Nollywood films, regardless of their quality. It’s almost as if the distributors, most of whom double as streaming aggregators, enjoy betting against themselves in the cinemas.

Two of the top three production studios in Nigeria have released films that could have been cinema blockbusters straight to Netflix. More streaming platforms like Amazon are beginning to pitch in. Unless one or two major films make a cinema detour before the year runs out, the Nigerian film industry will continue to lose ownership of the small cinema market it fought so hard to build. The clock is ticking.

Anita Eboigbe is a communications expert, researcher and data journalist. She is actively committed to growing the Nigerian media industry through research for business development. Her work focuses on improving the industry by creating workable roadmaps.

Anita is the co-founder of Inside Nollywood, an analytical media company working to improve the quality of conversations around the film business in Africa.

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