Saturday, November 30, 2013

Nollywood: The Nigerian film industry without an industry

With budgets as low as a few thousand dollars, a digital camera, a laptop, and no sets, Nigeria's filmmakers have created the second largest film industry in the world. This means Nigeria is a bigger producer of movies than the U.S. and is second only to India's Bollywood in terms of number of productions per annum. And I should mention that while the film industries of India and the U.S. are each about 100 years old, the Nigerian film industry is a youthful 20.

We'll dig into these, and many other scintillating statistics in today's post. So grab your wheelie suitcase and climb aboard, because today on the blog, we're headed to the heart of the Nigerian film industry, aka Nollywood.

First, an overview of the Nigerian film industry:

  • On an annual basis there are between 1000 and 2000 new productions, with as many as 200 new productions per month 
  • Average budget of a Nollywood film: US$17,000 - US$23,000
  • Average number of copies sold (on DVD): 50,000
  • Average price per DVD: $3 - $6
  • Average Nollywood shoot is one week, with all shooting done on video, all on location (no sets, no studios)
  • Movies considered to be hits sell a few hundred thousand copies and can sell up to 150,000–200,000 units nationwide in one day.
  • Value of Nigerian film industry in 2013: $590M, up from $250M in 2010
  • Over 500 languages are spoken in Nigeria, but the dominant language is English and the majority of productions are in English

Much of what I'm reporting here was gleaned from a presentation I attended a few weeks ago by the Berkman Center's Colin Maclay and Aimee Corrigan, a writer and producer who splits her time between Boston and Nigeria, where she runs a program called Nollywood workshops. Aimee's program provides technical training and aims to build a community among the approximately one million people involved in film production in Nigeria (it's the second largest employer in the country, after the oil industry). The idea of a film industry is a new concept to the locals, as the system of filmmaking in Nigeria basically created itself, from the bottom up. There are no studios. There are no film schools. Everyone is self-taught. People use online tutorials or figure out how to use programs such as Avid and Final Cut Pro themselves. The industry started digital and remains digital. Everything is shot on video, and edited on desktops or laptops. The films are generally narrative/fictional films (vs. documentaries or non-fiction) and it is a truly national cinema, with Nigerians telling Nigerian stories. The environment is one in which the independent, self-financed spirit has been key to the growth of the sector, and where the prevailing idea is that anybody can do it. This is, perhaps, the ultimate creative democracy. And though barriers to entry are low and supply is high, the economics seem to be working. This is largely because rather than thinking of filmmaking as an activity carried out by an elite group of artists and producers, it is something that people believe can be done by anyone, financed with modest funds from personal contacts, and completed in the space of one week.

Market stalls as distribution & retail outlets
There are, of course, other key differences between the Hollywood market that most people are familiar with and the Nollywood market. For starters, Nollywood is 90% a DVD market. With broadband Internet penetration reported to be between 4% and 6% in Nigeria, downloading and streaming is not really an option within the country. Even more interesting is that piracy, in the form of pirated DVD's, is said to have contributed to Nollywood’s growth and success. Some say that without the unsanctioned copying and sale of counterfeit DVD's, Nollywood would not exist. This is because filmmakers can generally only make a small initial run of the discs, financed with 'friends and family' money. The pirated copies are said to be critical in growing the film's audience outside of the large production centers, such as Lagos, and ultimately to other countries with sizable Nigerian populations, and therefore an audience for the films. With virtually no budgets for marketing, the piracy, in essence, becomes the marketing. And to keep things tidily under one roof, the pirating often takes place in the same facility that did the run of the original DVDs; they just send 100,000 copies out the back door onto trucks, where they are later sold in other regions and countries for about $1, or less than one third of the price of the legally produced DVD. More distribution, whether legal or not, appears to be good for everyone. On average each film is seen by approximately 10 million people within the country, and another 8 million people outside of the country. To put these numbers into a bit of perspective: the city of Lagos has a population of 21 million, the country of Nigeria has a population of 169 million, and London, in particular South London, sometimes referred to as "little Lagos", has a Nigerian population of more than 1 million.

In terms of budgets and box office (if the term can be used, seeing that these films generally do not receive a theatrical release), as mentioned above the average budget for a Nollywood film is ~$20,000. By comparison, the average Hollywood film budget is $100 - $150 million. And realize that a marketing budget of tens of millions is not unusual for a Hollywood production. An example of a high budget Nollywood film is Last Flight to Abuja, which cost approximately $500,000 to make, or 20x the average budget. Atypically, this film received a theatrical release in England, -- with its sizable Nigerian community -- in the hope of recouping the larger outlay for production.

Of the approximately 1,000 films produced in Nigeria annually there may be about 20 made at this budget level. Though a budget of $500,000 sounds small, if not miniscule, to Western audiences, bear in mind that no Nollywood movie has yet generated revenues of $1 million. Also worth noting is that the average middle class Nigerian income is generally about $500 per month, so an expenditure of $3 to $6 on a non-pirated DVD is proportionately much higher than that of a U.S. consumer, where the average income hovers around $40,000 per annum. 

And though there is no centralized industry or studio system there is a star system at work. Actors such as Desmond Elliott and Genevieve Nnaji are prominent personalities, and generally appear in the films with the larger budgets in the low six figures. Genevieve's national stardom is such that multinational consumer goods company Unilever made her the face of their popular Lux soap product and Range Rover selected her as a celebrity endorser. Western culture may have its own foothold, but large brands are said to prefer to use Nollywood spokespeople whenever possible.

As the Nigerian diaspora grows so do new distribution channels for the films, such as online and mobile, via companies such as IrokoTV, AfriNolly, and Jumia. But how might the industry apparatus develop alongside these social and technological changes? Will new forms of financing emerge, will higher budget films necessarily yield higher quality, or more popular, films, and will the grassroots system through which Nigerian film has flourished for the past 20 years be replaced with a more industrial model? In other words, will Nollywood go Hollywood, or will it more or less stay true to its industry-without-an-industry configuration?

And for the extremely interested in this topic: An in depth look at the Nigerian film industry can be found in the full length documentary Nollywood Babylon, which can be seen in its entirety here.

Related Post: YouTube as a new platform for film & filmmakers

Monday, November 11, 2013

Music Hack Day 2013 Boston: Revenge of the NERD (New England Research & Development Center)

This weekend I attended the demo session of Music Hack Day. Hack Day is an annual event in which groups of coders voluntary fill themselves with pizza and energy drinks, pull an all-nighter and create the best 'music hacks', or apps, they can in the limited amount of time allotted, which in this case is 24 hours. It's kind of like a reality show for people with brains, but not televised.

The event took place at Microsoft's NERD (New England Research & Development Center), which is on the campus of MIT in Cambridge, MA. Which makes sense. A few things struck me while I watched the parade of ideas before me (there were 60 projects, and presenters had 2 minutes each to show their wares). Firstly, the speed with which people can go from idea to execution. Granted, it's not necessarily a ready-for-prime-time kind of execution but it certainly is a proof of concept. One that didn't exist on Saturday November 9th, but did exist on Sunday November 10th. 

The second thing that struck me is that the next big thing truly can come from anywhere. Sure there were some music hacks presented that were just for the heck of it art and science projects, such as an HTML 5 music visualizer and Spotify plug-in or one that turns an MP3 file into a video game. But there were also ones that could easily be the next Twitter. And let's face it, when 99.9% of us first encountered Twitter we thought to ourselves why would anyone bother, not this is going to become an all-access live in real time media platform that alters the landscape of news, marketing, and the way as many as a few hundred million people function, moment to moment. 

And as I looked around the room I thought to myself "this is what the new music industry might look like". With music available in digital, streaming form its value shifts from exclusively being with the object (LP, CD, etc) to the context in which it is placed. This is why services like Spotify, Pandora, and iTunes radio have caught on the way they have. And even YouTube offers a playlist and recommendation listening option. We can have a lean-back listening experience, or we can provide additional inputs. We move from music as something complete that exists within a closed system to music as something that can be experienced via a database, appended, remixed, and reshaped at will.

A few of my favorite hacks of the day:

PAPPA aka Paul's Awesome Party Playlisting app which you can see in action here.

The 'non-contiguous cartogram' that used streaming data to illustrate the most popular songs in each state. You can play with this one here, and note that the map rendered is clickable and listenable.

The Secret History of Music, which not only mashes sounds but also stories. Go ahead, play with it here. Faves include the behind the music stories that never were of Avril Perry and Biggie West aka Smalls Kanye.

And this all happened with just some facilities thrown in by Microsoft, some sponsorship from companies such as EchoNest and Rdio ...and substantial amounts of simple carbohydrates and beverages containing high fructose corn syrup. I'm happy to say the whole thing looked nothing like the music industry I remember from, gasp, the 80s and the 90s, where the system was based around, because at the time it largely needed to be based around, big budgets and tightly controlled formats, because the goal was to serve a mass market, and that's what mass markets were made of. Now, music is there to be streamed, to be downloaded, to be mashed, to be aggregated, and to be hacked. Coders are abundant and one or two people can bang out an app that plugs into Spotify and the next thing you know the experience of millions of tracks of music has been altered. It may turn into nothing, but it could turn into something. And the cost of trying can be as low as the willingness to stay up all night.

Blog Bonus! From San Francisco Music Hack Day 2013, held earlier this year: The Bonhamizer. This hack adds the tank force drumming of Led Zeppelin's John Bonham to your favourite songs. Try it out here (you can even link to the code).

Saturday, November 2, 2013

Uber vs. the cab industry

I'm writing during the lunch break at the annual Tech conference held at the Harvard Business School. (with the the oddly 90s relic name Cyberposium...note to conference may be time to tweak the name?) and just attended the mid-day keynote given by Travis Kalanick, CEO of Uber, the on-demand car service that started in San Francisco a few years ago. It's now in 53 cities in 21 countries and has a valuation over $3 billion. I'm less interested in the story of how this is a crazily successful startup making a bunch of people wealthy beyond beyond belief, and possibly reason, and more interested in how the company has worked around the embedded industry structures of transportation systems, and has done so with great agility, despite myriad legal and regulatory challenges. By offering an improved experience for riders, even though it was at a higher cost, Uber was able to demonstrate, and to do so unbelievably quickly, that the market was hungry for the solution. They had to circumvent the established system, and the challenges aren't over yet, but they have not just hockey stick growth but more like vertical skyscraper growth (okay maybe more like Leaning Tower of Pisa growth) to support their case. Riders are happy, drivers are happy, there's nothing being given away for free, and the monopoly that is the cab industry in many cities is shaking in its boots. Interesting to look at this in the context of how differently it is playing out from, e.g, technology innovation in the entertainment industry, and in particular in the music industry, where the upheavals started with the introduction of peer-to-peer technologies in 1999 and continue today, with many unhappy interested parties.

The idea for Uber came when a couple of guys got frustrated trying to get a cab in Paris, which was a frustration they knew well from trying to get a cab in San Francisco, trying to get a cab in New York, and by the way have you tried to get a cab in Boston? Don't get me started. Anyway, we all pretty much know the drill. You have somewhere to go, you don't have a whole bunch of time, and a projectile arm extension in the middle of a big city is your ammo. You will be passed by several times, you may get rained on in the process, but usually you eventually get picked up. The car probably smells a bit off and the driver is probably listening to a radio station you're not interested in while talking on his headset phone to a buddy from Chechnya. 20 minutes later you're fumbling for cash, trying to figure out the tip, and the stranger that picked you up wants to wrap up the transaction asap and get going with the next fare. There's very little about the experience that does not suck.

Travis Kalanick wanted to come up with something that created simplicity around getting from Point A to Point B, and to make it an elegant solution. He came up with Uber, the company that would become "everyone's private driver", on demand. And you wouldn't get that cab described above. You'd get things like a town car, a late model sedan, a Mercedes SUV.

Here, in point form (for the purposes of brevity & speed) is the story of Uber:

- Uber has been designed to  'feel like magic': you see the car on the map in the app, your credit card is on file,you make no payment in the car, you review the driver, the driver reviews you

- The plan was not to take over the world; it was to solve a problem for Travis and 100 of his friends

- What ended up happening: those 100 friends told their friends, who told their friends, and within months the company was growing at a rate of 16% per month

- Early on people said to Travis: "You're nuts"; "This will only work in San Francisco"

- What ended up happening: every market that Uber entered after San Francisco had an even steeper growth curve

Data from Uber showing traffic patterns in San Francisco
- Uber's maps know roads that Google Maps don't

- Heat maps show where demand is going to be in 20 minutes, Uber can adjust the supply of cars accordingly. Drivers are independent businesspeople, with single cars or fleets of cars.

- "Surge pricing" - when demand outstrips supply, prices go up; Uber's system then puts more cars on the road. Hotels can't do this....they can't just add more rooms.

- Uber drivers have been able to build out million dollar businesses. If a driver has 6 cars they're generally grossing over $1 million annually.

- In NYC there were 13,250 taxis in 1949. There are 13,250 taxis in NYC today.  The taxi medallion/license costs $1.1 million.

- Cab drivers pay $125 to essentially 'rent' the car for a 12 hour shift. That's $90k/year of revenue from one car for the cab company, a $45k out of pocket expenditure for the driver.

- Washington DC: Charged Uber with improper fare violation for charging for time & distance and not being a cab. DC created the "Uber Amendment" which stated that Uber would have to charge 5x as much as a cab. Uber emailed its user base in DC and 18 hours later: 104 million social media impressions, and the amendment was rescinded.

- Uber has introduced a lower-priced ride-sharing service, Uber X, with prices that are approximately 1/3 lower than regular Uber cars, to compete with ride-sharing and car-sharing startups.

- In San Francisco: Average Uber driver grosses $117K/year and nets $71k, Average Uber X driver: grosses $111k/year, nets $77k/year.

What does the future hold for rebel CEO Travis Kalanick? Sure, there will be more lawsuits, the wrath of the cab and limo industries, copycat companies looking to steal bits of the business, but as he said in his keynote today it's all about outcompeting with focus, operational efficiency, and speed. He just needs to watch out for another guy named Travis.


Holiday season 2013 updates: Uber proves it's more than just a better cab company by teaming up with Home Depot for home delivery of Christmas trees, and does so with Uber's trademark flair.

And you may also want to look at this article from the Daily Beast defending Uber's practice of 'surge pricing' during bad weather.