Based on Business Daily’s analysis, this is an analysis of the potential of the Nollywood industry.
Nollywood, the Nigerian film industry, has experienced remarkable growth, capturing both local and international audiences. Despite this success, its full potential is hindered by the absence of profit-sharing deals. This financial model, common in Hollywood and other film industries, allows actors to benefit from a film’s success.
In contrast to Hollywood, Nollywood often operates on modest budgets, and actors are paid upfront fees rather than receiving a share of profits. This lack of a payment structure has been a long-standing issue in the industry, limiting the financial rewards for its talented actors.
The recent success of Funke Akindele’s A Tribe Called Judah, the first Nollywood film to gross N1 billion, highlights the industry’s popularity. Actors, as the faces of these films, play an important role in determining their success. However, the absence of backend deals means that actors miss out on potential substantial earnings tied to a film’s financial success.
In Hollywood, iconic actors like Robert Downey Jr. have earned significant amounts through backend deals, reflecting a percentage of a film’s box office returns or home video sales. In contrast, Nollywood relies on informal business practices, with A-list actors negotiating fees based on the project’s budget.
Femi Odugbemi, a veteran Nollywood filmmaker, acknowledges the lack of a payment structure and emphasizes the industry’s focus on A-list actors as its principal marketing assets. Unlike in Hollywood, where the emphasis is on the story, Nollywood often prioritizes star-cast promotion during film marketing.
Despite the challenges, Nollywood’s financial success is driven by various factors, including box office revenue, home video sales, and international releases. The industry has leveraged partnerships with international streaming platforms like Netflix and Amazon Prime, contributing to its revenue growth.
While backend deals remain uncommon in Nollywood, actors have sought alternative income streams, such as brand endorsements and sponsorships. These collaborations, like Michael Afolarin’s deal with MTN after starring in Netflix’s Far From Home, provide actors with additional financial opportunities.
What do you think about the analysed potential in the nollywood industry?
Have you read this: 5 Highest Grossing Nollywood Movies So Far!!!