Netflix vs. Cinema: Analysing Nollywood’s best bet for distribution and profit

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Netflix vs. Cinema: Analysing Nollywood's best bet for distribution and profit

Nigeria’s film industry, Nollywood, has been a powerhouse of storytelling and entertainment for decades. The industry is valued at a staggering $6.4 billion (as of 2022) and boasts the title of the world’s second-largest film producer by volume. This growth has been driven by the sheer volume of productions and the widespread popularity of Nollywood films across Africa and the diaspora. 

With over 2,500 films produced annually, Nollywood has carved out a significant niche in the global entertainment landscape.

Nollywood is, however, at a crossroads. The continuous rise of streaming giants like Netflix presents a tantalising opportunity: global reach and potentially lucrative distribution deals.  Yet, the traditional cinema experience still holds a certain appeal (even with a 4% decrease in admissions in the past year), particularly for some audiences and genres. 

With the advent of digital technology and changing consumer preferences, Nigerian movie producers now face a critical choice: should they premiere their films on streaming platforms like Netflix or in traditional cinemas? 

In this article, we analyse the strengths and weaknesses of both options using 4 major indices:

1. Market, reach and accessibility
Netflix:
  • Global audience: Netflix has about 269.6 million paid subscribers worldwide as of the first quarter of 2024, according to Statista. This global reach offers Nigerian films a vast audience beyond the local market.
  • Local presence: Netflix has been expanding its footprint in Africa, particularly in Nigeria. It actively seeks Nollywood content, increasing opportunities for local producers. For instance, the “Black Book” produced and directed by Editi Effiong is the biggest movie from Nollywood on Netflix, having notched 11 million views as of November 2023. 

It was on Netflix’s Top Ten list for nine weeks as of January 2024 in Nigeria. It spent three weeks on Top Ten in countries like the Dominican Republic, Jamaica and Panama. It is also the most expensive movie ever made in Nollywood, given its $1 million budget. 

Another film, “Áfàméfùnà: An Nwa Boi Story”, stayed Top Ten on Netflix for seven weeks after its release in the cinemas. 

  • Accessibility: With increasing internet penetration and mobile device usage in Nigeria, more people have access to streaming services. According to Statista, internet penetration in Nigeria is projected to reach 117 million by 2027.

N.B: Netflix Nigeria has only 169,600 paid subscribers according to November 2023 data. 

Cinema:
  • Limited reach: The number of cinema screens in Nigeria is limited. In 2022, there were a total of 81 movie theatres and 300 screens in Nigeria. Most of them were situated in Lagos. This restricts the audience size compared to the global reach of Netflix.
  • Audience demographics: Cinemas primarily attract urban dwellers with higher disposable incomes, limiting access to a broader audience. There are no cinemas in the rural parts of Nigeria. 
2. Revenue potential
Netflix:
  • Upfront payment: Netflix often buys the distribution rights of movies for a lump sum, providing immediate revenue for producers. Reports indicate that Netflix pays between $10,000 to $100,000 for Nollywood films, depending on the production quality and potential appeal.
  • Residual earnings: Depending on the agreement, producers might earn additional revenue based on viewership metrics.
Cinema:
  • Box Office earnings: Successful cinema releases can generate substantial revenue. For instance, “A Tribe Called Judah”, distributed by FilmOne, recorded over ₦1.4 billion in February 2024, having spent 11 weeks at the cinemas.

For clarity, Nollywood experienced a 46% year-on-year increase in box office revenue for Q1 2024 according to a report by Filmone. This growth translates to ₦2.25 billion in total revenue, including spillovers. 

"A Tribe called Judah"

Nollywood movies continue to dominate the Nigerian box office. Local productions held 56% market share during Q1 2024, while Hollywood productions held 44%. According to a report, the total number of people admitted to the cinemas in the first quarter of this year was 596,609, while the same period in 2023 witnessed 620,477 attendance.

  • Long tail revenue: Beyond initial box office earnings, films can generate additional revenue through television rights, and secondary streaming rights.
3. Costs and risks
Netflix:
  • Lower marketing costs: Marketing for Netflix releases is often supported by the platform itself, reducing the burden on producers.
  • Production support: Netflix sometimes offers production support (as with the deal with Mo Abudu in 2020 and Kunle Afolayan in 2021), including funding, equipment, and expertise, which can help reduce overall production costs.
  • Lower risk: The upfront payment model mitigates financial risk, providing financial stability to producers.
Cinema:
  • High marketing costs: Successful cinema releases require substantial investment in marketing and promotion to attract audiences.
  • Distribution challenges: The logistics of distributing films to cinemas across Nigeria can be costly and complex.
  • Higher risk: Box office performance is uncertain, and producers bear the financial risk if the film does not perform well.
4. Impact on Brand and Career
Netflix:
  • Global exposure: A Netflix release can significantly boost a producer’s profile internationally, opening doors to further opportunities in the global film market.

For instance, actress Genevieve Nnaji was interviewed by CNN’s Richard Quest after her first movie, “Lionheart”, as a director was bought by Netflix, making it the very first original Nigerian movie to be acquired by the movie-sharing platform. 

"Lionheart" - Netflix vs. Cinema: The best platform for Nigerian movie producers

“Lionheart” was also nominated for an Oscar – even though it was later disqualified

  • Quality perception: Films on Netflix are often perceived as high-quality, which can enhance the reputation of producers and actors.
Cinema:
  • Local fame: Successful cinema releases can lead to strong brand recognition and loyalty within Nigeria.
  • Cultural impact: Cinemas offer a unique and communal viewing experience that can significantly enhance the cultural impact of movies.

    This communal dimension is deeply rooted in the tradition of storytelling and social gatherings, which are integral to the Nigerian culture. When audiences gather in a cinema to watch a film, the shared experience creates a collective memory and a sense of community that streaming platforms struggle to replicate.
Putting it all together

Imagine a film like “King of Boys: The Return of the King,” a high-octane political thriller, finding a global audience on Netflix. Millions globally are captivated by the story of a powerful businesswoman navigating the treacherous waters of Nigerian politics. 

Streaming platforms offer this unparalleled reach, allowing Nollywood films to transcend geographical and linguistic barriers.

"King of Boys: The Return of the King"

Data-driven insights from these platforms can also inform future productions, ensuring content resonates with a wider audience. Also, streaming services might offer higher upfront payments, particularly for films with broad appeal.

However, Nollywood’s magic isn’t just about the films themselves. It’s about the communal experience. Picture a packed Lagos cinema erupting in laughter during a scene from a hilarious “Aki and Pawpaw” comedy. The shared experience in a cinema amplifies the film’s impact, fostering a sense of community and cultural identity.

This is particularly true for films that address social issues, sparking conversations and potentially leading to social change.  Theatrical releases also generate significant buzz, with local media outlets buzzing with reviews and interviews, drawing even larger audiences.

Ultimately, the best choice depends on the specific goals and resources of the producer. A historical drama with strong local appeal might benefit more from a theatrical release to capitalise on the cultural impact and box office potential.

A genre-bending sci-fi film, for instance, with international themes could leverage streaming platforms to find a global audience.

The most successful strategy might lie in a hybrid approach.

Imagine a film like “The Wedding Party 2,” a hugely popular romantic comedy, premiering in Nigerian cinemas with a red-carpet gala and generating national excitement. After a successful theatrical run, the film could then be released on Netflix, allowing fans around the world to experience the joy and cultural touchstones embedded in the story.

This maximises both revenue and exposure, fostering a dedicated local fanbase while capitalising on the global reach of streaming services.

"The Wedding Party 2,"

A typical example is “Áfàméfùnà: An Nwa Boi Story”, released to the cinemas on December 1, 2023, recorded over ₦53 million one month after, and was posted on Netflix on March 29, 2024, where it has recorded amazing success. 

The future is bright. But, on what platform? 

Nollywood’s future is bright, and the choices producers make regarding distribution platforms will play a significant role in shaping its trajectory.

By understanding the strengths and weaknesses of both streaming and cinemas, Nollywood filmmakers can craft a distribution strategy that maximises their reach, cultural impact, and financial success.

The future of Nollywood will likely be a blended story, one where global audiences discover the magic of Nigerian cinema alongside enthusiastic local fans, all thanks to a strategic approach to distribution.


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