Nigerian Box office revenue to hit N50 billion in 4 years – CEAN President

Nigeria’s film industry, known as Nollywood, has emerged as a significant player on the global stage, boasting a valuation of $6.4 billion.

Over the past four years, the sector has attracted international attention, driven by a rising demand for high-quality productions and culturally resonant storytelling.

While Nollywood has yet to reach the heights of its music industry counterpart, it has shown remarkable growth in 2024, with September releases such as Queen Lateefah and Farmer’s Bride cumulatively grossing over N400 million within weeks and still showing in cinemas. .

Considering this momentum, Nairametrics sat down with the President of the Cinema Exhibitors Association of Nigeria Ope Ajayi to look at the intricacies as well as conducted an in-depth exploration of the movie industry in Nigeria.

This interview features insights from the President who is also the Founder of Cinemax Distribution Limited, as he discussed the challenges facing the industry, the potentials and opportunities for expansion, and the ability for the industry’s viral success in a landscape increasingly receptive to African storytelling, perspectives, and narratives.

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Nairametrics: The West African Box Office recently hit N7 billion, with a significant portion attributed to Nollywood productions. What key factors do you believe are driving this rapid growth in the industry and its revenue generation capabilities?

Ope Ajayi: Production quality in Nollywood has seen significant improvements, and filmmakers are increasingly willing to experiment with diverse genres. This year, for example, we witnessed the release of biopics and faith-based movies, alongside a notable rise in epic films. This reflects the entrepreneurial spirit of Nigerians in the industry.

In terms of admissions, we’re experiencing growth as well. Last year, the total revenue was N7.24 billion, and we’ve already surpassed that figure by October this year. Remarkably, we’ve had at least one movie grossing up to N100 million each month in 2024.

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This achievement used to be a significant milestone, but now it’s becoming more common, with many films crossing the N100 million mark.

With this upward trend, the box office is well on its way to meeting its revenue projection target of between N11 – and N12 billion by the end of the year. The landscape is becoming increasingly promising for Nollywood, indicating a bright future for the industry.

Nairametrics: With global players like Netflix and Amazon investing in local content, what impact do you foresee on cinema participation and Nollywood’s growth trajectory in the coming years?

Ope Ajayi: The entry of Netflix, and Amazon Prime into the market has prompted stakeholders to improve the quality of their projects significantly. We can attribute enhanced cinematography and storytelling to the necessity of meeting the high production standards required by the platforms as well as global competition.

The Nigerian audience is very savvy and consumes content from all over the world.

Additionally, the streaming services have created dual income streams for filmmakers. A movie can first run in cinemas and then be released on streaming platforms, maximizing its revenue potential.

Moreover, this exposure has broadened the reach of Nollywood, allowing it to connect with a global and more diverse audience, which has drawn even more attention to the industry.

Overall, while it’s critical to continue to balance the ecosystem and ensure that a good number of blockbusters go to cinemas, the impact of streaming services has been largely positive for Nollywood, contributing to its growth and evolution.

Nairametrics: What’s driving the growing demand for epic Yoruba films like Jagun Jagun, Lisabi, Agesinkole, and others, and how will this shape future indigenous productions?

Ope Ajayi: Firstly, the storytelling novelty in Nollywood is unmatched. No other industry or people can tell Nigeria’s historical and traditional stories with the authenticity that Nigerians can.

This unique perspective, paired with a production quality that meets global standards, has fueled growing demand both locally & internationally. Audiences are naturally drawn to history and cultural narratives, and with the rise of streaming platforms, it has become easier than ever to share these traditional stories worldwide.

The appeal of traditional Nollywood productions highlights a rising appreciation for authentic, culturally rich storytelling. While other genres are also well-produced, Nigeria’s rich history and culture provide a distinctive flavour that captivates and leaves a lasting impact on viewers.

This trend reflects a shift in audience preferences and emphasizes Nollywood’s potential to carve out a unique niche in the global film industry. By consistently delivering high-quality, culturally resonant content, Nollywood can further establish its place on the world stage, drawing increasing attention from local and international audiences alike.

Nairametrics: What is the process for including movies in Nigerian cinemas? Are there criteria or requirements that filmmakers must meet, and how does this process impact the diversity of films available to audiences?

Ope Ajayi: There are registered distributors and cinemas that have their associations. Both associations specifically are registered with the NFVCB (National Film and Video Censors Board) our regulator. If you have a film, you’ll find a distributor who believes in it and is willing to distribute & promote it. In some cases, invest. They will then reach out to cinemas to arrange screenings.

This is after the film has been classified. All films are classified and rated by a regulator Nigerian Film Video and Censors Board. There are of course contracts between producers, distributors, and cinemas. There is also typically a framework that guides the entire process.

Nairametrics: Streaming platforms often have revenue-sharing models with content creators. Do cinemas in Nigeria have similar arrangements with filmmakers, where they receive a share of the box office sales, and how does this impact the industry’s financial ecosystem?

Ope Ajayi: There are standard frameworks that guide the relationships between the producer and distributor, and then between the distributor and the cinema. There may be slight variations on a case-to-case basis based on negotiations, perceived strength of the titles, etc.

Nairametrics: What policy initiatives or regulatory changes do you believe could be introduced to support and improve the outcome for cinemas in Nigeria, both in terms of sustainability and growth?

Ope Ajayi: Significant investment is required in infrastructure and in production. While there is some level of funding available through government agencies such as the Bank of Industry, it still requires cinemas and all practitioners to provide a bank guarantees or collateral.

Realistically, perhaps only a handful of players are able to access this funding because of the stringent requirements, leaving a substantial portion of the industry without access to funding, specifically low cost funding.

Beyond funding, many businesses and players in the film space need capacity development, such as training programs (Financial, Legal and Regulatory, Business Development, Marketing etc.). Having access to funds is one piece of the puzzle; the other is having the right structures in place to qualify for and effectively use the funds.

Nairametrics: How does the Nigeria Cinema Association envision the future of cinemas in Nigeria, and what opportunities and challenges do you foresee in the years ahead?

Ope Ajayi: I genuinely see significant growth potential in the industry. Our projection by the end of this year is a box office figure of between N11 billion – N12 billion revenue representing over 50% growth from last year.

With a steady growth rate of 40-45% per annum, I believe we could realistically hit N45 billion within the next four years, possibly N50 billion.

This projection is grounded in the expectation that the industry will be driven by high-quality content and the expansion of cinemas.

This projected box office growth is just one part of the cinema revenue model. In some cases, box office revenue accounts for less than 50% of the total earnings for cinemas.

So, a N45 billion box office could translate into over a N100 billion industry when advertising, food and beverage sales, and other revenue streams are included. We would then be on a path to a multimillion-dollar industry, signaling to both local and global players that this is a sector to continue to invest in.

With stronger content, strategic marketing, and emerging talent, the industry can signal immense potential both locally and globally.

Nairametric: Although Nollywood continues to show promise with production value and high revenue, the box office when measured globally, still falls short due to the naira devaluation. How has this impacted production costs and overall marketing budgets?

Ope Ajayi: While Nollywood shows promise with increasing production value and growth in revenue, its box office figures, when measured on a global scale, still fall short due to the naira’s devaluation. The currency impact has notably driven up production costs and stretched marketing budgets.

Generally, the cost of producing a high-quality film has effectively doubled but the potential for substantial revenue growth remains strong. The dollar devaluation somewhat erases our growth on an international scale but creates an opportunity to further look inward and build locally.

Double-digit growth in admissions expected over the next few years is a strong indicator. I do believe that in a couple of years, it will be the norm to have Nigerian films gross over N1 billion naira in revenue at the box office and we can see this as many as 4 times a year (each quarter) or more.

Nairametrics: What specific challenges are faced in production costs and logistics?

Ope Ajayi: Production costs in Nollywood can vary widely. From Cast, Crew, Equipment, Locations, Hotels, Logistics, feeding, extras, costumes etc, productions can cost hundreds of millions of naira.

You often also have unforeseen contingencies shooting in Nigeria where there are so many moving parts, very few film villages which are privately owned and you pretty much have to provide security for the production. Other specialized costs like music licensing and are also line items that can make production very expensive. Creating great productions cost a lot of money.

Credit Naira metrics