The entertainment industry in Nigeria has no doubt been among the most successful sectors in the country. A population of 170 million people provides a big market for retail of entertainment products. Nollywood is ranked second behind India's Bollywood in terms of volume of production. In terms of revenue, Nollywood is third, with an impressive annual revenue of $590 million, producing 50 movies per week. According to BBC news, it costs an average of $25,000 and $70,000 to produce a movie in Nigeria. These films are produced within a month and are profitable within two to three weeks of release.
Also, a United Nations publication, Africa Renewal, revealed that the African film industry (in which Nollywood is by far the dominant), contributed significantly to the 5.2% GDP growth projection for the continent last year. This implies, that the entertainment industry has indeed contributed significantly to the economic growth of the country.
Furthermore, the music sector is not left behind. Nigerian musicians now perform internationally, and are beginning to win international awards, enjoying huge patronage from local and international fans. The predominant genre of the Nigerian music ruling our airwaves is youthful. This perfectly fits and appeals with the huge Nigerian youth population, of over 100 million people under the age of 45.
Consequently, the entertainment sector is now reputed to be the second highest employer of labour in Nigeria after agriculture. The entertainment sector employs a pools of young people with diverse skill sets, with the Nigerian film industry alone currently employing more than one million people.
Over the years, the growth in entertainment industry has witnessed a major challenge of piracy in its distribution. Despite this challenge, the industry is raising a new breed of entrepreneurs who have gone out the bounds and have successfully internationalised the movie industry. One of these entrepreneurs is a 33-year old Jason Njoku of Iroko Partners, who was recently listed by Forbes as one of “top 10 young African millionaires to watch.” With offices in Lagos, London and New York, his firm distributes Nollywood and Ghanaian films and music, and is seen as Africa’s version of Netflix. Iroko Partners attracted $8 million in funding last December to boost its on-demand video platform and drive it toward profitability in 2015.
Moving forward to cinemas, which previously featured predominantly Hollywood, Chinese and Indian films. However, over the last decade, Nollywood films have become staples of Nigerian cinemas. As a result, the cinema culture has been revived in the country, with Silverbird being a major player in the cinema experience. Film industry analysts believe that the Nigerian cinema is the most popular in Africa.
In line with these developments, the president has given his total support by ensuring that $200 million worth of loan be made available to the entertainment industry to make more movies produce more songs, provide jobs and create wealth in the economy. This fund has been made available through the NEXIM bank who have supported film making, improvement of distribution infrastructure, and creation of new digital production studios.
In addition, the World Bank is currently assisting the Nigerian government to fund anti-piracy measures such as the source identification code, which will create a platform for digital distribution. This code will connect video clubs and retail outlets and ensure that only digitally secured content can be rented.
This development in the entertainment industry shows that the industry will experience even more growth in the future. Consequently, potential investors will enjoy high return on investment in the areas of film making, music production, digital studio setup, cinemas, and event management.