What Leaf Can Nollywood Borrow From The Booming Tech Industry?

Nollywood and its need for structure; lessons from the tech industry and the role of The Afro Garage.

Nollywood production companies are centered around people. The word ‘Studio’ is often slapped at the end of people’s names once they get enough money in their hands to produce a film. Most of these people typically operate a kiosk system - they wake up, open their kiosk, chase customers who give bad reviews away and pinch resources so they can maximize the profits. 

Very few studios, with actual structures, exist in the country and the quality of work speaks for itself. The end result of this is a shaky film ecosystem where although more people are entering, the audience is shrinking. In 2019, Nollywood lost about 15 per cent of its cinema audience which it clearly undermined by sticking with a broken formula most of the time. While the industry hoped for better in the coming year, the pandemic happened and shut things off, causing the industry to begin rebuilding brick by brick. Yet, by the end of 2021, about 23 per cent of the film audience had dropped off, according to analysed cinema exhibitor data. 

A lot of things are attributed for this loss, especially the pandemic aftershocks, increased penetration of streaming services and of course, fatigue from watching the same kinds of films over and over from an industry still at growth stage. In the past, a lot of issues were attributed to low funding and several interventions, even from the government, yielded poor results in solving the funding issue. With the new attention on African content, streaming platforms have begun a silent war in Nigeria and have picked some filmmakers’ projects to fund. 

Again, like most of the time, the bet is on the filmmaker, not his company or studio. While this individualistic approach appears to be working, it is clearly tentative. There is an obvious struggle on how to build and maintain structures that can exist independently of the filmmaker. It is really hard to find these structures, which after riding on the filmmaker’s clout for a while, becomes an entity of its own and contributes actively to building, growing and expanding the ecosystem.

What would it take to have a Disney-like company, a Paramount, Universal or Warner Bros.? What would it take to build an actual company, not living on the edge stringing project to project without visible growth, especially in the ecosystem? 

Across the pond from the film industry is the Nigerian tech industry, which has become the envy of many. The new oil. As it continues to grow in leaps and bounds, the film industry is gazing at what it could have been but largely lacks the motivation in the right direction. 

While Nollywood’s market continues to shrink (but sustains lean profit with increased ticket prices), the Nigerian tech industry has grown from less than one percent of GDP in 2001 to almost 10 percent in 2018, and over 15 percent in 2020, surpassing South Africa to emerge as a premier investment destination with over 90 active tech hubs. 

As Olakunle Mohammed puts it in his analysis, Nigeria went from attracting 24 percent of $185 million funding raised by African tech startups in 2015 to becoming the most sought-after tech investment destination, accounting for 47.6 percent of the $701.5 million raised in 2020. Top gainers were Flutterwave, 54 gene, Helium health, Kuda bank, TradeDepot, Field intelligence, Medsaf, Autochek, and Rensource as they raised about $100 million within the period.

In the same year, Nigeria recorded the biggest startup acquisition as an international Fintech company, Stripe, acquired Nigerian-grown payment services, Paystack, in a deal worth over $200 million.

This news was received with massive accolades for Nigeria’s growing Fintech ecosystem. Few months after Paystack’s acquisition, another Nigerian-grown payments company, Flutterwave, announced that it raised $170m in its series C funding, pitching its valuation at over one billion dollars to achieve a Fintech Unicorn status. It has continued to go up from there while the Nigerian film industry relies on project-by-project funding cloaked in benevolence. 

Film has many moving parts and calls for a structured industry. We need more start-up structured companies taking lessons from the tech industry through the use of incubators, hubs and accelerators. Start-ups are not just a tech thing. Using similar structures can see film companies grow into viable businesses. Viewing film companies as startups and treating them accordingly will provide the much needed perspective. Iroko and its subsidiaries like ROK TV have shown that this is possible. How do we get several others like it and take the industry up from there? 

Moving to solve these problems is The Afro Garage founded by Dolapo Amusat. The company was founded in response to the current structure and funding issues in the creative industry by taking globally proven structures that have worked across industries, to expand the creative ecosystem. 

“The Afro Garage exists to support entrepreneurs building in the creative space - music, film, entertainment, art, media, tech-enabled platforms that solve creative problems, and any sub industry that falls under entertainment.  What we are trying to do is discover people who are building solutions and services that will be very useful. We will support them with hands-on venture building, help with every facet of their business and help them secure funding. We also aim to build communities around the creative and tech ecosystem and then consult for established companies,” Amusat said in conversation with NollywoodAnd...

He agrees with research that shows that one of the biggest barriers to the growth of the creative industry in Africa is funding. The others are knowledge, guidance and support, which can be improved through incubation and organized communities.  “These are problems we are trying to solve. We believe that by helping out people that are building the companies that would actually fund the bedrock of the industry, we are creating infrastructure. We are creating a system that can be self-sustaining; that can create revenue and feed into the economy and create jobs as well and impact a lot of people,” he added. 

For the film industry, The Afro Garage is intent on fundamentally discovering people who are building unique kinds of film companies and making unique kinds of content that have not gotten the needed visibility across the continent. 

The initiative has a clear mission statement - to power Africa's creative ecosystem with technology and capital - helping them structure their business and figuring out things around monetization. It also seeks to help players in the ecosystem drive better partnerships with other industries and secure funding for their projects and companies.