5 ways Sony’s $10 million Africa investment could benefit Nollywood and Nigerian music

Sony Group has unveiled its latest initiative, the Sony Innovation Fund: Africa (SIF: AF), aimed at bolstering the growth of entertainment businesses across the African continent. This program, which focuses on gaming, music, film, and content distribution, is set to receive a significant boost with a $10 million investment courtesy of Sony Ventures Corporation (SVC).

Sony Ventures Corporation, known for its extensive investments in various sectors worldwide, is now turning its attention to Africa. This move comes at a crucial juncture for the African tech landscape, as the entertainment sector, often overlooked by investors, is gaining traction.

Gen Tsuchikawa, CEO of Sony Ventures, stated that the company’s mission is to infuse the world with sentiment through creativity and technology. Recognising the potential of Africa’s vibrant community of creators and entrepreneurs looking to revolutionise entertainment experiences, Sony established the fund.

“The entertainment field has been a key area of focus for Sony Innovation Fund since the beginning and will continue to be. Africa, in particular, has a vibrant community of creators and entrepreneurs looking to invent new ways to enhance entertainment experiences for audiences and that propelled Sony to establish SIF: AF,” he says.

Last year, SVC completed the first closing of Sony Innovation Fund 3 at $215 million to back all stages of emerging technology companies. The subsidiary manages all of Sony’s venture investment activities through SIF3, Sony Innovation Fund (SIF); Sony Innovation Growth Fund by IGV, a joint venture with Daiwa Capital Holdings; and Sony Innovation Fund: Environment.

Read also: 10 Nigerian startups among 25 selected for Google’s $4m Black Founders Funds in Africa

How this can benefit Nigeria’s movie and music industry

In the last couple of years, the world’s top record companies with a global market share have all entered the African music industry. Nollywood is also not left out, with partnerships with its counterparts around the world. But this is all due to the growing demand for African music and content.

With a much-needed investment in the African entertainment industry, the Sony Group’s investment represents a pivotal moment for the continent’s burgeoning entertainment tech sector. Among the numerous benefits, here are five things it can mean for the industry:

Increased Funding Opportunities: Africa’s prospects in creative industries like art, fashion, film and television, crafts, and architecture, among others, are well documented. An oft-quoted fact comes from the United Nations Educational, Scientific, and Cultural Organization’s (UNESCO) 2021 report; African Film: A Booming Industry. It illustrates the potential in the film and audio-visual industries, which could generate revenue of up to $20 billion per year.

According to a Nigerian movie director, producing a mid-tier cinema film would cost around ₦30 million. However, at the upper end, the cost goes from ₦50 million to ₦70 million — at the minimum. This was the cost in 2021. Compared to their foreign counterparts, especially Hollywood, the average cost to produce a major studio movie has been around $65 million.

The African entertainment industry remains one of the most underfunded industries in Africa with a meagre 0.9% of Africa’s total venture capital investments, as revealed by a Partech report. The Sony investment could provide the much-needed capital for Nigerian companies and entrepreneurs in the music and movie industries. With an additional source of funding, local talent can access resources to produce high-quality content and develop innovative projects.

Enhanced Content Production: A major problem that has surfaced in the production of many Nollywood movies is the lack of depth and a good storyline, which then causes them to lack the quality that viewers want to see. In Nigeria, the difference between high-budget and low-budget movies or videos is quite noticeable. First, there is the quality issue, then the storyline, and lastly, there is a cast mismatch problem.

A perfect reference point of this analogy is movies that have done well on streaming platforms like Netflix and Prime Video, and those that may never make it into these platforms. However, with the newly injected fund, Nigerian artists, musicians, and filmmakers will have the chance to create more and better-quality content. This infusion of capital can lead to the production of higher-budget movies, improved music production, and the creation of engaging internationally competitive content.

More Global Exposure: Afro-music, which is particularly of the African genre, is gaining wide recognition, which has ultimately led to international collaborations. On the other hand, Nollywood isn’t at that level yet. This noticeable gap between the Nigerian music scene and the movie industry can be worrisome. The movie industry is very much in need of these wider and more noticeable international collaborations.

Sony’s influence as a major entertainment player globally and its involvement may facilitate collaboration and partnerships between the Nigerian entertainment industry and the global entertainment industry. This collaboration can lead to international distribution deals, exposure on a global scale, and the potential for local talents to achieve international recognition.

Technological Advancements: Although Nigeria’s media and entertainment industry is one of the fastest-growing creative industries in the world, according to PwC Global Entertainment and Media Outlook for 2022-2026, there are also noticeable gaps in its technological sophistication compared to global standards.

Nigeria still lacks the necessary tools and machinery to compete with other countries in terms of video production. However, Sony is currently one of the leading investors in the entertainment industry worldwide, with advanced technology used in high-definition video production and distribution. The tech giant’s commitment to providing technology and intellectual property support means that Nigerian artists and production companies can access state-of-the-art tools and resources, leading to improvements in production quality and efficiency.

Improved Distribution and Access: In 2021, Sony Pictures Television’s (SPT) international production division announced an exclusive first-look deal with Nigeria’s premium media conglomerate, EbonyLife Media. The companies agreed to partner to develop scripted series centred on African culture.

Although a deal has been made between Sony and EbonyLife Media, it seems that the full potential of the partnership has not yet been realized. At the moment, it is unclear how many Nigerian movies or TV shows are currently available on Sony’s distribution channel in comparison to other streaming platforms like Netflix. Additionally, it is not yet known whether the new funds will be used to launch a Sony Africa movie channel.

Nonetheless, the injection of fresh funds into the local content industry could lead to better distribution and access to a wider audience through collaborations with Sony. This would make Nigerian music and films more accessible to global viewers.

Finally, with a $10 million infusion of capital and the company’s extensive support, African startups in gaming, music, film, and content distribution are poised to thrive, revolutionising the entertainment landscape and capturing the world’s attention.

More on the Sony Africa fund

This Africa-focused fund is expected to provide a much-needed financial injection into the continent’s entertainment tech startups. According to Partech Africa, these startups received a mere $42 million in 2022, a meagre 0.9% of Africa’s total venture capital investments. This is despite the enormous potential for growth in gaming, music, movies, and content distribution, which are integral sectors that Sony Ventures is eager to explore.

For example, the gaming market in Sub-Saharan Africa is projected to exceed $1 billion by 2024, as per data from games market data providers Newzoo and South African game publisher Carry1st. Similarly, video-on-demand subscriptions are expected to reach 13.7 million in 2027, with revenues tripling from $623 million in 2021 to $2 billion in 2027. The music industry is also thriving, with genres like Afrobeats gaining global attention and attracting record labels.

Tsuchikawa emphasised that the fund is not limited to financial support; it will provide technologies, collaborate with creators, offer intellectual property and content support, provide marketing assistance, and more to contribute to the growth of the entertainment business in Africa.

“…this fund will also try to support those creators and the growth of entertainment business in Africa in various ways such as providing technologies, collaborating with creators, intellectual property, and contents, marketing support, and others which Sony can contribute,”

The fund will support seed and early-stage entertainment startups, with investments ranging from $250,000 to $1 million. While specific startups have not been disclosed, Sony Innovation Fund: Africa plans to initially focus on South Africa, Kenya, Nigeria, and Ghana, with the potential for expansion.

Read also: Hollywood movies dominate Nigerian cinemas, what does this mean for Nollywood?