What next for Nollywood after funding pullback from Netflix?

On November 2, 2024, top players and guests of the Nigerian film industry appeared on the red carpet for the second edition of Netflix’s ‘Light, Camera, Naija,’ an evening dedicated to celebrating the legends of the burgeoning film industry.

However, just a few weeks later, rumours started swirling about Netflix leaving Nigeria. The sector was quiet about this until Kunle Afolayan, a Nigerian filmmaker, revealed during a panel session that certain film projects commissioned by Netflix were cancelled.

The same day, Netflix Nigeria released a statement debunking that it had already left the Nigeria’s film industry hanging.

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“We are not exiting Nigeria. We will continue to invest in Nigerian stories to delight our members,” said the Netflix spokesperson.

Was Netflix fed up with numbers from Nigeria?

Experts within the industry think the financial cut stems from an investment perspective. Reports from 2023 show that Netflix invested a total of $125 million in South Africa and $23.6 million in Nigeria.

Nigeria has one of the lowest subscription prices. Subscribers in Nigeria pay as low as $4.48 compared to South Africa whose subscribers pay $8.41.

Experts believe that Netflix’s decision is purely business-driven, rather than a reflection of the quality of Nigerian films. They suggest that Africa’s market potential doesn’t align with Netflix’s growth strategy, especially compared to regions like India with larger and faster-growing subscriber bases.

Experts also highlight that India’s large population, particularly its growing middle class, makes it an attractive market for Netflix. They suggest that similarly, South Korea and Japan offer significant subscriber potential, making these Asian markets more appealing to Netflix than Africa.

Netflix has beaten analysts’ expectations for a third straight quarter, adding over five million new subscribers. The crackdown on passwords and growth in advertising-based subscriptions contributed to its success this quarter. It reported revenue of $9.8 billion, a 15 percent increase year over year growth, and profit growth of 41 percent year over year.

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Company executives and industry experts say growth in Asia has a role to play as well. Netflix’s greatest success story in the region has been the South Korean production, ‘Squid Game’. The first season of the game show-style drama, which was released in 2021 and follows a group of debt-riddled contestants competing in deadly games for cash, has been watched 265 million times globally to date.

It also amassed 2.2 billion hours of watch time, making it the streamer’s most-watched show of all time, according to Netflix data. The variety of original content available on Netflix and early investments in Japan and Korea are playing a role in its growth.

In the light of building a much stable capacity for the industry, Nigerian filmmakers have been warned by experts not to be comfortable with selling their works to just a handful of buyers and should think beyond the financial assistance from the likes of Netflix and Amazon.

James Amuta, a filmmaker, said that the recent actions of international streaming platforms should serve as a wake-up call for Nollywood. He argues that the industry became overly reliant on these platforms as ‘saviours’ without focusing on self-sustainability.

“The key players knew all along that this was going to happen. It’s a wake-up call because I think we were quick to assume that the international streamers coming into the country were our saviors. But nobody can save you if you’re not willing to save yourself,”Amuta said.

The filmmaker said that Nollywood became complacent, focusing solely on producing content for a limited number of buyers. He said the industry must actively seek out and engage with a wider range of markets to ensure its long-term stability and growth.

In 2022, Funke Akindele’s ‘Battle on Buka Street’ made history as the first indigenous Nollywood film to secure a theatrical release in the US and UK. Distributed by FilmOne Entertainment, Part Two Media (USA), and Amplify Africa, the film opened in 11 Regal Cinemas and grossed $61,000 during its opening weekend.

The following month, Toyin Abraham’s ‘Ijakumo: Born Again Stripper’ also debuted in the US and UK. These releases marked a significant milestone for Nollywood’s international distribution.

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While these and other films represent a positive step, they are only a small fraction of Nollywood’s annual output. Amuta emphasised the need for a greater focus on producing marquee films that resonate with international audiences, expanding Nollywood’s reach beyond domestic markets and not just streaming.