Netflix’s 2023 Africa Report Is Baffling, but Largely for the Wrong Reasons
Six years into its operations in Africa, global streaming giant, Netflix published a study detailing its substantial socio-economic impact on the mother continent, and the contents are stunning.
Focusing on the South African, Nigerian, and Kenyan markets, the 48-page report was largely enlightening and positive, bar one part which caught my eye and undoubtedly the eyes of many keen readers –the unusually large investment in South Africa compared to Nigeria.
Since 2016, the most popular streaming platform in the world has poured $175 million into the three aforementioned markets and a whopping 70% ($125 million) went to South Africa and a measly 13.5% ($23.6 million) to Nigeria. Further reveals in the report paint a rather surprising discrepancy.
This discrepancy speaks volumes when you consider that the latter has more titles on the platform than the former (286 to 186 respectively). And let’s not even begin with Nigeria’s clout and huge population which outclasses their southern brethren. Despite knowing these, Netflix somehow thought investing more in the South African movie industry was better. This raises alarms as to the level of the company’s –and by extension, foreign investors– trust in Nigeria which is not unlike Twitter’s 2021 choice to place its Africa headquarters in Accra, Ghana, despite Nigeria being the obvious choice.
But why? Why has the Nigerian film industry fallen out of favor with Netflix and what can be done to fix it?
The answer is a multifaceted one.
Before I even begin attempting to provide an answer to the underlying question hovering in our minds, it is important to note that the report is not in any way bleak for Nollywood. Far from it. It highlights, among other things, how Netflix’s operations in the country have proved fundamental in changing the wider socio-economic spectrum by providing thousands of jobs, training personnel, giving creators funds and a chance to shine on the global stage which culminates in an increased global demand for African content.
So, this piece is not an attempt to undermine Netflix’s well-deserved influence in the country, South Africa and continent at large but one that aims to address salient points that may hinder such progress and proffer solutions to better shape the Nigerian movie industry to suit foreign investors without compromising public content.
Why Netflix’s investment is invaluable to Nollywood: The wider socio-economic impact
Following its 2016 launch in the Nigerian movie market, Netflix has poured in over $23.6 million in hundreds of indigenous and collaborative video projects – about 250 of them. Blood Sisters, one of Nollywood’s most successful outputs – raking in 11 million views in its first week and bagging a spot in Netflix’s top 10 global TV programs– was made possible by the company’s dedication to its Africa initiative. In addition to giving Nollywood greater exposure and aiding in its expansion into the worldwide market displaying local material, other productions like Far from Home and King of Boys are proof of the aforementioned reality. Among Netflix’s priorities for Nollywood is establishing training aimed at institutionalizing global best practices in film production and elevating the industry through the fostering of talents and capacity building.
Netflix’s activities and influence in the wider Sub-Saharan African area have also not gone unnoticed. Its impact has managed to rear its head into the four pillars of socioeconomic growth. These include making over $44 million in tax contributions, adding more than 12,000 new employment, growing GDP by $218 million, and raising household income by an additional $200 million. This investment produced favorable dividends in Nigeria. According to the report, the Nigerian economy reaped significant economic benefits, including $2.6 million in tax revenue, $4 million in household income, and $39 million in GDP through various direct, indirect, and expenditure impacts. Additionally, it facilitated the creation of over 5,140 jobs.
Problems Netflix encounters in Nigeria warranting such decision
Despite these unending successes, South Africa getting the lion’s share of production investments implies that the Giant of Africa just isn’t doing well enough.
Several issues might be at blame for this.
Nigeria’s miserable digital infrastructure, especially when compared to South Africa’s may not be unconnected with Netflix’s decision.
While the rainbow nation had an 80% of its population with internet access as of 2022 –a figure that is expected to rise to 90% by the end of the decade– the self-acclaimed “African Giant’s” broadband utilization was a measly 48%. Moreover, low levels of digital literacy among the nation’s populace is something foreign investors take into consideration. More households on the internet means more access to Netflix platforms and increased connectivity –a stat the South African movie industry brings to the table. The nation registered one million subscribers on the platform as of 2018, accounting for more than half –55% to be exact– of Africa’s subscribers three years later in 2021.
The scant support of the Nigerian government towards the entertainment industry—often leaving it fully in private hands—is also a key cause for worry. The unsurprising budgetary limitations of the private sector coupled with the government’s apparent lack of interest in the industry reduces the possibility of premium productions.
Add to this the complex regulatory framework present in Nigeria that often frustrates foreign investors –such as the lengthy and cumbersome licensing process– and the ever-increasing political instability then it’s easy to see why South Africa was a premium choice for Netflix.
These problems and more make it extra difficult for Netflix to create the kind of national presence required to collaborate with more national content producers and distributors.
This is to take nothing away from South Africa though. The country has more than earned its place as the top choice for Netflix operations in Africa with its well-developed and robust movie industry –touted to be the best on the continent. This is in part thanks to its vast historical tapestry, diversity, infrastructure, and firm government support which has made forging alliances with regional content producers and distributors a smooth task for the company.
Besides, the stats have a word or two to prove South Africa’s worthiness. And numbers don’t lie. Six of the nine best-performing content in Africa was South African, with Nigeria and Kenya having two and one respectively.
This may be why the country has more commissioned titles on the platform (16) than Nigeria (3). As a side note, commissioned titles are more expensive than licensed titles, often requiring huge budgets (tens to hundreds of millions of dollars) due to the company piggybacking the entire production and distribution process. Commissioned titles are prized because they offer unique content and not refined material, helping to build a cult following for Netflix.
How to fix them
Notwithstanding the aforesaid hurdles, Netflix has expressed its unwavering support in its initiative to skyrocket Nollywood to unimaginable heights by liaising with established Nigerian media companies like Mo Abudu’s EbonyLife Studios to produce and distribute content in the country.
But how do we maintain such trust and redeem Nigeria’s position as the top dog on the continent?
Upgrading internet infrastructure to increase accessibility of high-speed internet access, which is vital in providing a seamless streaming experience would be a good start. Partnering with telecom companies to lower data rates might do just the trick. Furthermore, for international streaming platforms to be emboldened upon penetrating the Nigerian market, it is necessary that there be an accommodating regulatory environment. Simplifying the licensing procedure and offering incentives are sure ways to achieve that. The partnership between Netflix and the Nigerian Film and Video Censors Board, which supports the government’s initiatives to develop effective legal and regulatory frameworks suitable for digital entertainment, suggests that the trend in this area is shifting.
Also, since the issue of piracy is a potent one in Nigeria –although not peculiar to the nation– strengthening intellectual property protection should be a priority of the government.
Netflix’s investments in the Nigerian movie industry promise to elevate it to “global appeal” status much like its Korean and Japanese counterparts. Currently, it is on a positive trajectory of transformative expansion and to avoid jeopardizing this continuity, addressing the challenges as mentioned above is imperative. Nigerian tales and talent may flourish on a global scale in the future of Nollywood can realize its full potential, a potential that can be materialized via extensive collaborative efforts –just like Netflix’s– and a common goal.