2019 business year is going to be tough for Pay TV companies like Multichoice and StarTimes over Netflix partnership Nigerian TV scene, Naija247news understands.
Frightened by Netflix’s growing popularity among African viewers, Multichoice -Africa’s largest television operator, wants the global streaming platform to be regulated.
Distribution of Nigerian movies on Netflix started around 2015. At the time the American giant bought the rights of blockbusters such as Kunle Afolayan’s October 1st, Biyi Bandele’s Fifty and several others, after they had already been distributed in Nigerian cinemas.
During the Toronto International Film Festival 2018, Netflix announcedthe acquisition of worldwide exclusive distribution rights for Nollywood star Genevieve Nnaji’s debut film as director, the comedy Lionheart. The film marked the first Netflix original film from Nigeria. Many saw this as the beginning of a new era in the relationship between one of the world largest streaming platforms and Africa’s most prolific film industry.
According to reports from the Chief Executive Officer of MultiChoice, Calvo Mawela blamed Netflix for the loss suffered by the company in the 2017 financial year.
Mawela said more than 100,000 subscribers and an additional 40,000 were lost to Netflix and in a 2018 interview with South African Business Day, the Multichoice boss called on regulators to clamp down on Netflix and other over-the-top services.
Quartz Africa further reports that in a testimony to the Independent Communications Authority of South Africa, Mawela said over-the-top service providers like Netflix were already at an advantage because they did not have to contend with affirmative action regulations.
Multichoice will face fresh competition from Netflix. Multichoice will face fresh competition from Netflix.
It’s a known fact that Netflix will be concentrating on the shores of Africa in 2019 with Nigeria being on its list.
In the words of Netflix’s vice president of international originals, Erik Barmack, the company’s Europe team is “in the process of looking at opportunities in Africa. It’s definitely the case that we’ll commission some series there in…2019.”
While Multichoice and Startimes are currently battling with iROKO, the leading streaming platform for original Nigerian content, the involvement of Netflix might have spearheaded another line of competition in 2019.
However, in an interview with Business Insider SSA, Netflix said thought the company is following Nollywood closely and focusing more on content, there are no plans to have a physical office in Nigeria.
‘There are no plans set as yet. We are following the local industry closely and focusing more on content rather than physical presence,’ the company told Business Insider Sub Saharan Africa.
Jason Njoku is the CEO of iROKOtv, Nigeria’s premier streaming platform. Jason Njoku is the CEO of iROKOtv, Nigeria’s premier streaming platform.
It is believed that the reason for this is to avoid the seeming difficulties faced by iROKO when it moved its headquarters from Manhattan to Lagos.
In its bid to operate in the terrain where Netflix is king, MultiChoice launched a standalone streaming services, on-demand service ShowMax, and DStvNow. The online services allow existing subscribers to livestream channels or watch selected shows on demand.
While spotty internet connections and pricey data plans have affected iROKO and MulticChoice streaming operations, Netflix is already looking to help fix the issue and secure a better connection for its Nigerian audiences.
To this end, Quartz Africa reports, Netflix has deployed a dedicated server in Nigeria in partnership with Spectranet.
The server will hold the entire Netflix content library and will provide customers in Nigeria with the best possible video streaming performance.
Following the acquisition of Genevieve Nnaji’s ‘Lionheart’ in 2018, after buying the rights of blockbusters such as Kunle Afolayan’s ‘October 1st,’ Biyi Bandele’s ‘Fifty,’ it’ without a doubt that Netflix means business and ready to compete in the Nigerian market.
The news of Netflix entry has elicited relief and joy amongst filmmakers and Nigerian movie industry players who seem to have long endured the hostility of local distributors that held Nollywood’s economy since its creation.
Chief Executive Officer of Biola Alabi Media, Biola Alabi told Nairametrics that the involvement of Netflix in the industry signals a boost for filmmakers and boom for Nollywood.
‘I think it is encouraging and I think it is a very good sign that the rest of the world is interested in Nollywood content. This also told me that local investors will miss out on this big opportunity if they don’t pay more attention. Netflix has a production budget of $8 billion. That’s just for production of original content. That’s not talking about acquisitions, or technology because remember, they’re a technology firm. We’re talking about $8 billion that is just for producing original content. Our entire film industry in Nigeria is roughly $1 million. We’re talking about just one company here and not even including others in the west. So for me, that’s concerning because if we are not investing in our own stories, our own stories will then be dictated to us by other people.’
However, all is not lost for Multichoice, who will still have three of its indigenous African Magic stations on DSTV compete favourably.
With indigenous contents of low movie quality and budget on Africa Magic Yoruba, Africa Magic Hausa and Africa Magic Igbo, the pay TV company will continue to cater for a part of the larger market.
Just like Multichoice has invested in production, Chinese StarTimes have also made a few investments in Nollywood over the past few years.
The competition which used to be between the two giant pay TV companies will now be among four major contenders – Multichoice, StarTimes, iROKO and Netflix.
It is believed that this competition will probably have a positive impact for viewers across Nigeria including a possible lower subscription fees for streaming and TV content packages.
While there are also likely to be new investments in content production and infrastructures, Nollywood films stand a better opportunity and chance for larger continental and global exposure.
These are not easy questions to answer. Nollywood’s economy and modes of production are unlike those of most other film industries. Over the past 20 years Nigerian films have circulated mostly on videotapes and Video Compact Discs (VCDs).
This distribution system made the industry widely popular across Africa and its diaspora. But it prevented Nollywood from consolidating its economy and raising the quality of film production. Piracy dramatically eroded distribution revenues and producers had trouble monetising the distribution of their films. Nollywood prioritised straight-to-video distribution because cinema theatres had almost disappeared in the country (as in most other parts of Africa) as a result of the catastrophic economic crisis that affected Nigeria in the 1980s.
New multiplexes have emerged since the beginning of the 2000s. However, today there are only about 150 widescreens for a population of almost two hundred million people. The cinemas that exist are often too expensive for most of the population that used to buy and watch Nollywood films when they were distributed on tapes.
The trailer from ‘Lionheart’.
Within this context, many in the industry thought that streaming could be the best solution to the industry’s problems with distribution. However, a closer look to the history of what has been labelled the “Nigerian Netflix” (iROKO.tv, the leading streaming platform for Nigerian contents) shows that the reality is more complicated.
When the company decided to move its headquarters from Manhattan to Lagos it encountered countless difficulties. They were mainly connected to the costs of infrastructure development in Nigeria and to the hostility of local distributors who controlled Nollywood’s economy since its creation.
Internet connection in Nigeria is still too weak and expensive to guarantee easy access to streaming platforms. As a result, Nollywood content distributed by iROKO.tv and Netflix circulates mostly in the diaspora. Netflix is aware of this problem and is investing in infrastructures to secure a better connection for its Nigerian audiences.
But larger investments seem to be necessary to produce a significant impact on audiences’ behaviour. Accessing Nollywood films via piracy or local screening venues will continue to be, at least in my view, the key strategy adopted by the largest percentage of Nigerian viewers.
Netflix could have better chances in penetrating the country’s elite market, as richer people in Nigeria and across Africa have easier access to reliable power supply and internet.
This might be the reason why MultiChoice, the South African telecommunication giant controlling much of Nollywood distribution across Africa through its Africa Magic channels, has reacted nervously to Netflix’s increased interest in African markets. MultiChoice wants Netflix to be more closely regulated.
These two aren’t the only telecommunication “superpowers” in the field. France’s Canal Plus and the Chinese StarTimes have also made a few investments in Nollywood over the past few years. The competition among all these actors will probably have a positive impact for viewers across Nigeria and the continent. It could bring lower subscription fees for streaming and TV content packages.
There are also likely to be new investments in content production and infrastructures. And there’s larger continental and global exposure for Nollywood films in the offing.
It remains to be seen how good these developments will be for Nollywood producers. Until now, foreign investments in Nollywood have mostly translated into “more of the same” content. Working conditions for crews and actors have remained the same – basically, low budgets and quick shooting schedules.
In fact, big investors seem to be mainly interested in Nollywood’s already established popularity with African audiences. Making Nollywood more palatable for international audiences doesn’t seem to feature.
This means that in most cases they are not ready to invest bigger money in production budgets. Rather, they invest in better structuring distribution networks to extract as much profit as possible from the Nigerian industry.
And most African audiences are indeed happy with how Nollywood is, even if they tend to complain regularly about the low quality and the repetition of film contents and aesthetics. The fact that Nollywood as it is keeps on attracting audiences makes investors reluctant to change the scale of their production budgets.
There are a few bigger productions, with higher production standards, that have emerged over the past few years in Nollywood. But they have hardly been the result of investments made by foreign firms like Netflix, Canal Plus or MultiChoice.
Nigerian producers are those who are mostly concerned about raising the quality of Nollywood films. They want to give better content to their audiences and reach global screens. In most cases, the people investing money in these kinds of projects have been independent producers or groups of investors related to the new business of multiplexes in Nigeria.
In my view, the question is: will these people benefit from Netflix, so as to continue investing in higher quality content? Or will Netflix and other international companies end up taking over the industry to make it only a bit more of the same?
With additional reports from Alessandro Jedlowski on The Conversation.