TAKEN together, events and pronouncements, including published interviews by prominent persons within and outside the movie industry provide a useful guide and reliable indication that sooner than later, the industry will ultimately be obliged to accept that it is only the full implementation of the new distribution framework, NDF of the sole regulator; National Films and Video Censors Board, NFVCB that can stop its current downward slide and help it chart the shortest and easiest path to realize its huge economic potentials. For those not well versed in the technicalities of the movie industry business to easily comprehend and agree with this thesis, the three major issues afflicting and dominating the business of the industry are hereunder thoroughly analyzed:
Piracy: Almost everyone mouths this as the biggest problem of the industry, yet it is no more than a proof of the failure of the present weak distribution system. In other words, piracy or the open flagrant infringements of the music and movie Producers works, typified by the unauthorized street-by-street hawking is not the intractable problem that most commentators hold it to be. It can easily be put under control, not necessarily with a new law but using a simple but effective administrative process that will plug all the loopholes in the existing informal distribution system. For those who may not know or prefer to pretend not to know, there is an association whose activities can be said to be championing the entrenchment of piracy.
Without being a licensed national or regional distributor as required by the law, this association recruits, registers and controls most of the street video works retailers across the country. It came into being early in the life of the industry during its transformation from celluloid to Direct-To-Home, DTH movie productions. Their initial operation was to rent out foreign movies to their club subscribers but with the advent of the switch to movie productions and seizing upon vacuum attending the raging confusion then of which among the governmental agencies will regulate the DTH distribution, this particular association proclaimed itself the umbrella association of the retailers and registered with the Corporate Affairs Commission, CAC.
Now having operated unchallenged for so many years and given the huge funds accruing to its officials at the expense of bona-fide music and movie producers, the association is not letting go of its illegal but lucrative business. Rather it has strengthened itself by enlisting major industry practioners as its patrons! The same set of people that should on behalf of the industry give the association the fight it deserves are its sponsors and patrons; hence the impunity with which it flaunts its illegal operations!
Under the law, registration of a business by CAC merely certifies its compliance with the specified regulations that will make it to be known and accepted as a corporate citizen. CAC certificate of registration is therefore not a substitute for legally mandatory license to engage in some specialized businesses which require proven technical competence of the business owners/managers. Some of these are Law, Medicine, Advertising, Accountancy and Motion Pictures Distribution which is under the mandate of the National Film & Video Censors Board.
Yet this same association is using and relying on its registration by CAC as the basis of its illegal business of recruiting, registering and managing the bulk if not all the neighbourhood video works retailers, contrary to the express mandate of the NFVCB that “ to engage in the business of film and video works distribution in any part of the country, the operator must obtain a business licence from the NFVCB.”
It was this same mandate that forced the erstwhile marketers and other industry stakeholders to struggle at great costs and inconvenience to obtain their license from the Board. About the only outstanding aspect of the NFVCB’s distribution framework is the registration of all the street retailers who after registration are to work with the licensed national/regional distributors as their final retail points. But this particular association fearing its being rendered redundant under the NDF has been the major force behind the intransigence of the street retailers to register with the Board thereby putting the whole industry in its present sorry state. If the street retailers register their business with the Board, it will complete the framework implementation and a formal national distribution structure will emerge to enable Producers have commensurate financial rewards for their efforts.
Every retailer in a distribution network will be a territory that the producers can use as a basis of their negotiation with their national/regional distributor. Piracy then will not be a headache for the Producers as it is right now because with the street retailers’ formal registration their present operations shrouded in secrecy will become transparent. Right now, the unregistered street retailers is the main distribution network of pirated works, but if they register and become accountable they will no longer be able to support piracy. Their books will be opened for inspection. Government agencies, research students and press can visit any or all of them and ask to see the books.
Funding: In 2006, the Federal Ministry of Information under Frank Nweke jnr. with the professional advice of the Nigerian Films Corporation, NFC set up some Committees for the overall advancement of the industry. One of these was the National Film Development Fund Committee, chaired by the Professor of Economics, Pat Utomi. Briefly the Committee made a funding case for the Producers of films that may not be fully commercially-feasible yet important to our national understanding, reconciliation, image and growth. For the regular features films that are essentially for public entertainment and therefore commercial in nature, the recommendation is for them to source their funds like other businesses from either the banks or interested business partners.
This was because whatever the size of fund that government may put down, it can never be enough to meet the needs of all those that will apply for it; there will be problems in finding an equitable method of disbursing it to the practioners; if the movies are commercial in nature, funding for their production should be in the same way that other Nigerian businesses source for their funds and finally, there is nowhere in the world that government directly provides fund for the production of commercial films. However in recognition of the teething problems of an industry at its infancy, a supportive funding was canvassed for the Producers through commercial banks but with the stipulation that borrowers must provide foolproof guarantee of repayment and this is the crux of the matter and the relevance of the new distribution framework, NDF.
The present distribution system does not have an acceptable systemic foolproof guarantee that any producer can offer the banks to secure production loan. It is only if, and when the new distribution framework is fully implemented and the street retailers register with the NFVCB that a reliable distribution structure that can assure the banks and other investors of the safety of their money will emerge. Today, there are many funding channels, including Diaspora fund that bona-fide Producers can access but only with a back-up distribution structure that the lenders can rely on for the timely repayment of their money.
Not too long ago, a first generation bank set up an entertainment department with a mandate to invest Billions in the industry. After about two years of going around in circles without being able to establish a systemic foolproof guarantee of getting back their money, the department was dissolved.
Cinema Exhibitions: Most commentators taken up with the idea of cinema exhibitions seem to suffer from amnesia and their write-ups oscillate between sickening, amazing and quite often downright appalling! In their efforts to hype cinema exhibitions, they usually end up creating more problems than intended for the industry. First, how much of the fantastic box-office returns of millions have the Producers paid in taxes to the federal and state authorities? Secondly, how much in real terms of Naira and Kobo did the Producers have from the grosses, after the costs of hall, media hypes, promotions and logistics had been netted off? Finally, when a Producer with successful grosses approaches people to raise fund for their next project, the retort is to use from their reported “grosses!” Alternatively, he or she may be required to get a positive reference from their former financial partners.
But against the reality of most “successful producers” still battling to break even, the demand for reference becomes avoidable problem created by the media hype. Even other Producers, regardless of their relationship with the “successful ones” are now regularly advised by their traditional fund providers to seek their next fund needed from them. The industry needs to exercise great caution in reporting its financial performance lest questionable integrity is added to its list of challenges.
Without taking the pains to consider the financial implications of building and running not one but a chain across the country, pro-government-must-build-cinemas for the industry regularly flaunt the Galleria’s success template but the Galleria as the name indicates and the physical structure shows is a collection of service centres with the cinema hall being just one of them! Up till mid-90s Indo Nigeria Films and West African pictures operated chains of cinemas across the country but owing to the problems of economic downturn, transportation hassles and general insecurities the cinemas gradually gave way to become churches and event centres.
To now start building and running a chain of cinemas in different locations will require a colossal amount of money which in the face of present realities of our time may just go down the drain. The Galleria success is not so much for its cinema hall but being a celebrity centre. Most people that go there do not know or care very much for the films they watch but for being there amidst celebrities. Its exclusiveness also favours it but once there is proliferation, the exclusiveness becomes fragmented and the present market volume it monopolizes turns to what all the cinema houses will collectively fight to share. Income for each house will go down but their fixed costs of operations will still stand at the same level.
Even in Europe and America where the culture of cinema-going is entrenched, the last few years have shown rental income from DTH new releases as higher than box-office earnings of the cinemas. Back home it is the rental income that is still driving whatever is left of movie business. Video Clubs today are the major buyers of movies which they stock to hire to the public. All these confirm the new distribution framework recommendation that rental release should precede outright sale. Another direct competition for the cinemas is the terrestrial and especially cable stations. Their major attraction is movie broadcasts which people enjoy in the comfort of their homes and at little or no cost. In some strategic locations, cinema business can be successful but as a capital intensive project, it is advisable that a screening centre be first used to test-market its viability before the commitment of the huge capital required to build and operate it.