I'm guessing that, if you're like me, you had no idea the second-largest film industry in the world (behind Hollywood) is in Nigeria and is known in the industry as Nollywood. Now, thanks to the efforts of a Nigerian entrepreneur, these movies are coming to YouTube, and Hollywood should be paying attention to what this guy is doing.
According to an article on CNN.com, Jason Njkou, managing director at a company called Nollywood Love, has been purchasing the rights to Nollywood movies and uploading them to YouTube, where he makes money by running short preroll ads ahead of the movie.
The CNN article reports that the YouTube channel is boasting over 2.5 million views a week, which Nollywood Love hopes will translate into over $1 million of profits in its first year of operations. The model is simple and takes advantage of inexpensive digital technologies.
According to the site This is Nollywood, which is marketing a documentary about the Nigerian film industry, Nollywood produces hundreds of low-budget movies a year under difficult conditions. The movies, which go straight to DVD and VCD disks, have proven tremendously popular.
If you want to see what these films are like, go to Nollywood Love's YouTube channel. The quality is poor. The acting is stilted, and the camera often shakes. In the couple of samples I watched, the credits were blurry and difficult to read, and the camera sometimes lost focus. But this is about making movies quick and dirty, and if 50,000 people buy them directly, and millions more view them online, there is real money to be made in the volume.
This is never going to be a threat to the slick Hollywood film industry with its multimillion-dollar budgets, but what we have here is an industry that has taken advantage of the opportunity offered by Internet distribution and digital technologies and run with it.
Unlike the Hollywood media machine, which is mostly deathly afraid digital distribution will threaten its huge profits, Nollywood is making money by producing low-quality entertainment people want to see for a fraction of the cost of Hollywood blockbusters. And it is using Internet distribution systems to make even more.
The Nigerian industry can see what Hollywood can't see or refuses to acknowledge: There is money to be made in distribution on the Internet. Hollywood (more specifically, its mouthpiece, the Motion Picture Association
of America) sees the Internet as a place for pirates to steal their content, instead of a channel for selling it.
Yet PaidContent.org reported this month that Comcast's newly acquired NBCU division made money last quarter specifically through agreements with companies like Netflix to retransmit content over the Internet.
This shouldn't come as a surprise, but apparently, big media companies still don't understand the opportunity the Internet represents. This is something Nollywood executives have been able to figure out and take advantage of to the tune of millions of dollars in revenue.
Hollywood would never lower its quality to the level of Nollywood, but the success of the Nigerian film industry suggests there is more than one way to make money in this business. And that's something even Hollywood can learn from.
— Ron Miller is a freelance technology journalist, blogger, FierceContentManagement editor, and contributing editor at EContent magazine.
The think that's great about the Nollywood Love pre roll ads is that they really are only about 15 seconds, at least the ones I watched. I tend to move onto something else if they are much longer.
You've basically spelled out the iTunes music model. When faced with a reasonable price for a song, people paid it. Now you can go to a service like Amazon or iTunes or an all you can eat service like Netflix for the same thing.
But I agree with your basic premise, that the industry has failed to catch up with the distribution system and has continued to keep prices artificially high.
Disagree with you Ron -- I skip any pre-roll ads either by doing something else since I've got a tonne of alternatives available at any time. Despite working in marketing I resent any advertising that interrupts the content.
I realize I'm in the minority.
An altnernative to pre-roll ads would be something that either works with the content or adds to it. Just some ideas off the top of my head... say an ad at the end of the movie that's actually a section of the film spliced to make it look like the characters were reacting to a product. It'd be entertaining and effective because it's almost like an inside joke for people who've seen the movie. Or what if they passed me a link to a sponsor site where movie extras are hosted? Anything that's interactive, rewarding and most importantly, optional. People react better when things are their choice than when it's forced, simple human nature.
I think the business model of entertainment needs to adapt overall, and offer multiple price-points proportionate to how strongly individuals feel about a piece of work.
I think the more inappropriate the price or restrictions, the more piracy there will be. Let's put it this way: compare the costs of distribution, shelf space, advertising and DRM with a physical product to file torrants. The former is not only more expensive, but will have restrictions on its use and requires either going out to pick it up or paying for shipping. The pirate torrant wins hands down.
Now, compare Googling the name of the movie, finding the site, and being able to download it for $2 to torrants. Sure, you could find the torrant yourself for free... but it's only $2, it's easy to just use the search engine, and the movie's site has extras you can grab like directory commentaries, concept artwork and the like for $0.50 to $1.99. Sure, you could find out where someone uploaded EVERYTHING in one big package... but it was easier to Google the site and this way you can pick and choose only want you're interested in -- and they're charging less than Starbucks.
Agreed. Those pre-roll ads are a brilliant strategy because almost everyone is trained now to put up with a short one and you make money whether they watch the film for two minutes or all the way through. Boston.com uses it for short videos from Boston Globe reporters. It can certainly work for full length films.
Ron - a big part of this equation is the preroll ads. While not part of the original films, it is a working model that can allow some less than stellar, Hollywood bockbusters to be viewed or at least tasted.
Some cult favorites of today would have their moments in the sun if such was the case when they were produced. And maybe now, they are continuing to reap some benefit to this model too.
Money minded wise guys. Now the public choice is moving towards the price market. They would like to watch 10 movies for USD10 rather than watching 1 movie for USD 10. So they just need to watch and do not bother about the quality. It is the same reason how China market replaced all other markets. Even in Europe, USD ..etc most of the items are made in China now. Quality would be a threat, unlike old English products. But that’s what the general public wants. In Sri Lanka retail market has mobile phones with cameras just for USD 17. All Chinese, without warranty.
No argument here. There is something to be said for originality, but what Nollywood is doing is not that. It's just as you said like film made down the block. That can be fun, but don't have high expectations above pure entertainment.
Ron, you got me recalling a very, very famous film made on the cheap with amateur help -- George Romero's "Night of the Living Dead" (1968). Sometimes originality counts for a lot more than contrived artiness or effects.
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