Is Vertical Integration Killing the Nigerian Film Industry?

C.J. Obasi rose to prominence with his zombie apocalypse film, Ojuju, in 2014. His zero-budget debut feature won the award for Best Nigerian Film at Africa International Film Festival and Obasi received the Trailblazer of the Year award the following year at the Africa Magic Viewers’ Choice Awards for the film Ojuju. Since his debut, C.J. Obasi has worked with his longtime producer and wife, Oge Obasi, whose expertise expands multiple Nollywood blockbusters including Kunle Afolayan’s The Figurine and the renowned October 1. The Obasis’ intentionality and resilience followed them through several film labs including the prestigious OUAGA Film Lab (OFL) and incubators in order to access funding and distribution opportunities. One mesmerizing note of intentionality Obasi mentioned in a 2023 interview with ScreenDaily was how their recce in 2016 had ruled out the fishing villages in Nigeria and finally got the idea to move to Benin Republic four years later.

Mami Wata’s success is one that has quite literally toured the world. Beginning from Sundance in January 2023 and travelling to FESPACO, Africa’s most prestigious film festival and gathering, where it won three more awards. With a total of 15 viewings across Africa, Europe, North America, South America and Australia, Mami Wata has had one of Nigeria’s most prominent festival runs in recent years and with its global release, should have been on track to win majorly at the box office.

Whilst Nigerian film enthusiasts had been awaiting Mami Wata’s release for years, some filmmakers and viewers took to X (formerly known as Twitter) to express how they had been prevented from watching the film due to ‘technical issues’. The audience members have also mentioned the film had no promotional paraphernalia, not even posters in view. With the film having valid showing times in 39 cinemas across the country, consideration of possible foul play and sabotage lingers.

One user on X revealed that ‘Mami Wata only has one show time in Jabi Lake Mall. Quite certain Genesis cinema will not even show it at all’. At the Silverbird Cinemas, the film had only one slot for showing at midday 1:50 pm. The same user recounted their experience at the same cinema in 2022 with Dara Olaitan’s Ile Owo (2022).

On this social media discourse, Nigerian film critic, Oris Aigbokhaevbo through his platform on X, @Catchoris, also weighed in on his experience saying:

The director of the film, Kenneth Gyang, responded to his tweet stating he had also been prevented from seeing the film but was told a different lie:

Spectators online contemplate the reasoning for this unfortunate occurrence of obfuscation. Perhaps it is a national phenomenon across several independent exhibitors or, ‘jealousy’, ‘corruption’ and ‘cabal mentality’. These have been laid explanations for the handling of independent film in Nigeria. Observing the Paramount Consent Decrees of 1948 in Hollywood (US), a phenomenon could be proposed: vertical integration.

Vertical integration is a business strategy where a company owns and operates multiple levels of the supply chain. It could be from acquisition (raw materials) to production, distribution, compliance and more. While the purpose is to control business function, efficiency and profit maximization, it ultimately cuts out competition and limits free markets often leading to monopolies and fascism.

Vertical Integration in the film industry works in different ways. Typically, it goes from the purchase of a script. In some instances, large companies can have in-house writers and development executives who churn out content ideas. After the script is perfected, the film is then produced. Distribution and marketing are the most important parts of the film business. If you cannot show it anywhere, how do you make a profit? Rather than searching for distributors, these production companies typically have ‘sister companies’ or are part of a ‘group’ entity which simply requires the film to be engaged in another department within the same company. In complete fashion, the ‘group’ is likely to have physical spaces for exhibitions and cinemas. They are able to pick the perfect screening slots for their films and work effectively with data from previous films (local and international) which filmmakers can hardly ever be privy to. With the onset of streaming, it is likely that these distributors also stand as aggregators between filmmakers and streamers. As such, they participate in all aspects of filming right to the end. On the smaller scale as with younger filmmakers, it simply involves the filmmaking process and their participation in film reviewing or critiquing or some sort of small-scale exhibition within restaurants. Vertical integration is a great business model to scale reasonably and generate more profit. Notably, vertical integration exists beyond the entertainment industry. Companies like Amazon, Apple, NVIDIA, Samsung, Zara, and Alibaba engage in this practice. By controlling more than one stage of the supply chain, a business is actively participating in vertical integration.

The Nigerian film industry is currently riddled with vertical integration. The big studios produce content and are also active distributors, sales agents and exhibitors in the industry. The entertainment pipeline also involves producers who double as reviewers, critics or media at the same time. Players participate in all stages and segments of the industry partly due to hustle culture and the rest due to accessibility. As such, monopolies and alliances are born with priority and preference given to some in-house studio films over independent films.

In 2023, Business Day reported that Nigeria contributed roughly $66,000 or N59.2 million to the Barbie (2023) revenue. Although the headline describes it as Nigerians ‘splashing’ money, for a film that grossed over $1 billion, Nigeria’s input is a mere trickle. For Nigeria to have contributed $66,000 is telling of the current purchasing power and state of the country’s socio-economic landscape.

A low-budget global standard film in Nigeria would cost about N30 million and would typically go up to N70 million. Bigger spenders in the industry have budgets that run as high as N250 million and in the unicorn case of feature directorial debutant, Editi Effiong, about $1m for the movie, The Black Book. It is Nollywood’s second-largest budget to date. If the certainty of a sale to Netflix or Prime Video was not present, these films could run at a great loss. This was seen with Biyi Bandele’s adaptation of Chimamanda Ngozi Adichie’s Half of a Yellow Sun in 2013. The film reportedly had an investment between $8 million to $10 million dollars and was only able to make $2.1 million back at the box office.

In July 2023, Fitch Solutions predicted that Nigeria’s short-term economic growth outlook was dim due to rapidly increasing living costs following the removal of fuel subsidies, which has led to a significant increase in fuel prices. This crippled the purchasing power of millions of Nigerians, with inflation at a 17-year high of 22.4 per cent as of May 2023. The report also projected that real GDP growth in Nigeria will slow to 2.7 per cent in 2023, down from 3.3 per cent in 2022.