The Nigerian Entertainment Industry: A Business Mind

Introduction

The Nigerian Entertainment industry (NEI) can be traced back to 1926 when it started with local theatre plays. This local play has transcended significantly over the years to become top compared to global entertainment industries. Regardless of the economic headwinds currently facing the Nigerian economy, the NEI has shown resilience, niche creativity, and commitment to the industry, surpassing all negative projections.

The NEI has shown remarkable growth strides in the last decade. As one of the biggest music industry, it has made over $2 billion in revenue in 2021. Stears reported that Nigeria has the world’s second best-performing Entertainment and Media consumer market. To further bolster this, Statista estimated that revenue from streaming alone is expected to reach $45.34 million in 2023 in Nigeria. However, the industry only experienced small growth in income; this is an effect of piracy and unregulated media sources.

Regarding growth, the NEI is under the Arts, Entertainment, and Recreation Sector, contributing 0.20% to real GDP in Q3 2023. This growing sector’s accelerated expansion, surpassing last year’s 0.19% increase, demonstrates the industry’s emerging growth trajectory. These figures demonstrate the potential for large growth provided the industry is fully utilized while overcoming all obstacles.

The UNESCO report from 2021 on Africa’s film industry underscored its potential for socioeconomic growth across the continent, anticipating that the sector could produce over 20 million jobs and $20 billion annually through cultivating local creative talent and worldwide market access.

The opportunities are there, but how will these be tapped or optimized to reach their maximum potential in the face of various business challenges and industry setbacks? The article uncovers the top challenges in the industry and a peep into possible opportunities to shed light on the different routes to enter the industry.

Nigeria’s Entertainment and Media (E&M) revenue is projected to more than double by 2026, with a compound annual growth rate (CAGR) of 18.6% from 2017 to 2026. The major contributors to this growth include significant increases in Internet access spending, OTT video, and video games/esports. Traditional TV, home video, and Internet advertising also show substantial growth. Overall, the E&M industry in Nigeria is experiencing robust expansion across various segments, presenting lucrative business opportunities in the coming years.

Nollywood

Nollywood has made a remarkable name in the Nigerian entertainment industry with recent blockbusters. This has not only been about the views and thrills that come with watching the movies but also the revenue from their release. Nollywood is one of the fastest-growing creatives in the world, as stated in a PWC entertainment report.

The television and video market in the country experienced a 7.49% growth, reaching $806 million in 2020 compared to $732 million in 2018. Yet, again, the Nollywood industry has yet to show minimal progress with constant changes in the market. Projections indicate a further increase to $900 million in 2023. While the sector has continued to shrink in areas of traditional views, growth is primarily attributed to subscription revenue, constituting 72.26% of the total TV/video sector revenue in 2018.

The Nollywood industry has seen significant growth, linked to the rising number of subscriptions in the country. TV advertising contributes 21.31%, and physical home videos make up 5.33%. The government has seen a surge in subscription-based movie streaming services, especially with the entrance of key players like Netflix, Iroko TV, and Startime. Amazon Prime Video also launched its localized streaming service in Nigeria in August 2022. Research and Markets predict Nigeria will account for around 10 million, or 21.2%, of Africa’s pay television subscribers by 2025.

Many stakeholders have described the Nigerian movie industry as the fastest-growing movie industry in the world. With over N6 billion in revenue and more than 2,500 movies per year, Nollywood can pride itself among the top but only Bollywood of India and Hollywood of the United States of America.

Nollywood’s earnings surged from N5.98 billion in 2018 to N7.24 billion in 2023, fueled by strong ticket sales and the captivating charm of their movies.

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The Nigerian entertainment industry has achieved prominence through its film productions, capturing the hearts of many. The audience is primarily engaged through the dominant genres, with Comedy leading at 26%, Drama at 20%, and Action at 17.1%.

Considering the demographic of the vibrant young population, it’s no surprise that a survey conducted by Neclive revealed that 86% of respondents prefer consuming Nigerian film content through online streaming.

Considering the demographic of the vibrant young population, it’s no surprise that a survey conducted by Neclive revealed that 86% of respondents prefer consuming Nigerian film content through online streaming.

Music

The Nigerian music industry boasts some top artists, such as Burna Boy, Davido, and Wizkid, who are firmly in its grasp. The impact of these three music prodigies is immeasurable—from headlining international shows to selling out events and earning prestigious international accolades. Nigeria’s rich musical heritage, with traditions steeped in folk sounds yet blossoming into the contemporary styles of Afropop, Beatz and hip-hop, has propelled its diverse genres onto a worldwide audience, where they now enchant listeners across the globe through their vibrant representations of the country’s captivating music scene.

According to Premiumtimes, Nigeria is home to over 500 music producers, over 1000 record labels, and over 50 radio stations, showcasing the industry’s extensive efforts and its potential for continued growth. In a 2022 release, Spotify reported that Nigerian artists accumulated over ₦11 billion on the platform.

Platforms like Bomplay, iTunes, and Spotify significantly influence how people listen to music in Nigeria and even globally. However, the critical difference lies in the availability of tracks and the subscription rates of the various platforms. Through these services, artists have gained an unparalleled ability to connect with audiences everywhere, substantially amplifying their prospects of accomplishment.

Comedy

Nigerians are known for their natural humour, often finding laughter in unconventional situations. The evolution of the Nigerian comedy industry began with stand-up comedy, gaining significant traction over the last two decades. According to the National Institute for Cultural Orientation, stand-up comedy has become a thriving industry, offering financial success to those who persist through challenges.

Comedy now takes various forms, including skits, stand-up performances, and comedic roles in films, employing many young individuals. The emergence of social media comedians has intensified competition, challenging traditional stand-up comedians. Yet, many have adapted by using social media to expand their reach and promote shows. Social media comedians have found success online and transitioned into mainstream entertainment, securing deals with film production companies and corporate brands. This transition has elevated their profiles and increased their earnings significantly.

The digital era has reshaped the comedy sector in Nigeria, opening new opportunities for aspiring comedians. As social media and entertainment expand rapidly in an ongoing manner, this will carry on directing how comedy evolves nationally going forward.

Fashion

Lagos anchors Nigeria’s $4.7 billion fashion industry, commanding 15% of Sub-Saharan Africa’s $31 billion ready-to-wear market. Fusing cultural heritage with bold innovation, the vibrant scene in Lagos mirrors the nation’s dynamic spirit, setting global trends.

In the first half of 2023, Nigeria’s fashion manufacturing contributed 17.7% to the total manufacturing value, reaching N5.4 trillion for the year. The industry, spearheaded by initiatives like Lagos Fashion Week, showcased its prowess globally, leveraging social media to gain prominence. While Africa’s fashion industry is rapidly growing, the lack of adequate investment hinders its full potential. With a current annual export value of $15.5 billion, the UN suggests the earnings could triple with proper investment and infrastructure.

The Nigerian apparel market is projected to reach US$9.23 billion in 2024, growing annually by 8.07%. Women’s apparel leads the market, estimated at US$3.59 billion in 2024. Traditional clothing styles are witnessing increased demand, reflecting a renewed interest in cultural heritage.

Top 10 Nigerian fashion designers of 2023 include Rukky Ladoja, Ozzy Etomi, Dami Olukoya, Emmanuel Okoro, Florentina Agu, Ohimai Atafo, Bubu Ogusi, Toyin Lawani, Oyetomiwa Elizabeth, Dumebi Iyamah, and Victoria James, showcasing the industry’s diverse talent pool.

Challenges

Copyright Piracy Woes:

Nigeria grapples with rampant copyright piracy, hindering industry monetization efforts. Despite intensified intellectual property rights (IPR) measures, pirated books and CDs persistently flood markets, obstructing media and entertainment growth.

Currency Devaluation and VAT Pressures:

The sector faces challenges from Naira devaluation and value-added tax (VAT), impacting its economic landscape.

Skill Gaps and Technological Deficiencies:

Inadequate skills, outdated technology, and poor movie-making equipment impede the structured development of Nigeria’s entertainment business.

Opportunities for Growth

Training Facilities for Technical Skills:

Establishing training centers focused on animations, visual effects, and technical skill development offers potential for industry advancement.

Social Media Collaborations:

Engaging in collaborations with local short film creators through social media platforms opens avenues for creative partnerships.

Consultancy Services and Digitization:

The establishment of consultancy services can enhance content reach and penetration, fostering digitization of media.

Distribution and Rental Business:

Creating businesses catering to new production technologies, available for rental, can stimulate industry growth.

Global Collaborations and Mergers:

Collaborations with global film producers, mergers, and acquisitions present opportunities for growth, providing financial assistance and resources to national players.

Government support and Policy

Legislation Against Digital Piracy:

In April 2022, the Nigerian Senate passed a bill criminalizing digital production broadcast without creator consent, imposing fines and imprisonment as penalties.

Creative Industry Financing Initiative (CIFI):

The Central Bank of Nigeria’s CIFI offers loans to support youth employment in fashion, music, film, and information technology. Film production and distribution businesses can benefit from flexible repayment plans and low-interest rates.

Internet Penetration Initiatives:

Efforts by the Nigerian Communications Commission and Ministry of Communications and Digital Economy aim to improve internet access through laws, guidelines, and infrastructure projects, promoting digitization within the industry.

Conclusion

The Nigerian entertainment industry holds immense economic promise, capable of generating widespread employment and enhancing the nation’s global image. To unlock this potential, substantial investments from both the government and private sector are imperative. Collaborative efforts between the government and industry stakeholders can effectively showcase Nigeria’s cultural richness and talent worldwide. Through creatively implementing the approaches recommended herein, Nigeria’s leadership stands to significantly further energize and strengthen the entertainment industry, ultimately cultivating a robust economic engine that meaningfully enriches both the country and its people in the process.

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