Nollywood, otherwise known as the Nigerian film industry, has become almost as famous as Hollywood and Bollywood, with a reputation for pumping out unique stories and providing a platform for some of Africa’s most talented actors and directors.
The industry has achieved global success, but Nollywood filmmakers still face significant problems that hamper their progress and prevent them from realizing their full potential. Fortunately, there’s a solution at hand with blockchain, the decentralized and transparent ledger technology that’s closely associated with cryptocurrencies.
At a recent event held by the United Nations General Assembly, Tae Oh, the CEO of Nigerian blockchain development company Gluwa, described how the technology can transform Nollywood filmmaking and help it to achieve global prominence
While Nollywood is second only to Bollywood in terms of output, producing thousands of new movies each year, it struggles with problems around funding, piracy and limited access to international markets. Filmmakers have struggled to create a transparent business model for revenue sharing, which has hampered their fundraising efforts, and piracy results in a significant amount of those revenues being lost.
Financing Nollywood Through Tokenization
At the UN’s Destination 2030: Nigeria Everywhere event, hosted by Nigeria’s Ministry of Culture, Gluwa’s CEO Oh outlined how blockchain can make the Nigerian film industry more accessible to foreign investors, including retail investors. Using the technology, Nigerian filmmakers will be able to pitch their movie scripts or ideas to a global audience and raise the funds needed to bring them to the big screen through the tokenization of revenue rights.
The idea seeks to overcome one of the major stumbling blocks for Nigerian filmmakers, which is the difficulty of obtaining funding. Because traditional finance only provides limited options, many filmmakers are forced to either self-fund their movies or seek investment from informal sources. But with blockchain, decentralized finance protocols and tokenization, the Nollywood industry could find an alternative way to attract the funds it so desperately needs.
The basic premise is that filmmakers can use DeFi platforms to tokenize their films, creating tokens or digital assets that represent “shares” in their movie projects. They can then sell these tokens to investors on a decentralized marketplace, with each token providing the holder with the rights to a percentage of the revenue that movie make through the box office, on streaming platforms, or however it’s distributed.
It’s a novel approach to film financing and the exciting thing is that the infrastructure to do this is already in place. Using Gluwa’s Creditcoin platform, filmmakers can access the mechanisms needed to tokenize their movies and reach out to a global community of investors.
Tokenization of movies provides a way to democratize investing in Nollywood’s film industry, enabling investors from any country to find and fund the most exciting projects. As such, it vastly increases the available funding pool for filmmakers.
As an added advantage, blockchain will enable more transparent revenue distribution. Traditionally, the distribution of revenues in Nollywood has always been very opaque, but with blockchain, every transaction, including ticket sales and royalties, will be recorded on a publicly viewable ledger. This will ensure that every stakeholder, including filmmakers and investors, receives their fair share of the revenue.
“As a blockchain entrepreneur, I envision working closely with Nigerians to create a truly borderless financial system that amplifies their creative voices on a global stage,” Oh said in his presentation.
Other Blockchain Benefits
The advantage of blockchain for Nollywood isn’t limited to funding and transparency. In addition, the technology can also assist filmmakers in preventing piracy, which has long plagued the movie industry. Through the use of smart contracts that self-execute when specified terms are met, filmmakers will be able to ensure that their movies are only accessible to authorized users who have paid to license them. Any unauthorized attempt to copy or distribute the movie would be blocked automatically, making life much more difficult for pirates.
Smart contracts would also automate payments, meaning a more reliable income stream for filmmakers.
One of the great things about Nollywood is the quality of its movies, and yet the vast majority of Nigerian-made films go under the radar because of the limited distribution channels available. Blockchain can fix this too, facilitating direct, filmmaker-to-consumer distribution, so they can eliminate the middleman and reach out to their audiences directly. By launching a movie on the blockchain platform such as MovieBloc or Film.io, Nollywood creators would be able to make their content available to anyone who’s willing to pay for it. These borderless platforms enable secure crypto payments on a subscription or pay-per-view basis, making it easier to distribute movies to a global audience.
A final advantage would be the opportunity for Nollywood filmmakers to collaborate with their global peers, expanding beyond the local ecosystem. Blockchain enables producers, directors, story writers, screeplayers, actors and other participants in the industry to collaborate without any intermediaries, with smart contracts managing their agreements and the terms of payments, releasing the agreed funds when certain milestones have been reached. It provides a decentralized approach to moviemaking that will reduce costs and increase efficiency, so more resources can be used in the actual movie productions, meaning better quality films are made.
We can even envisage the creation of Nollywood decentralized autonomous organizations. DAOs, as they’re called, are decentralized, community organizations that make collective decisions. To participate, users are required to hold the DAO’s native token, which provides them with voting rights and the opportunity to submit proposals to the wider community. DAOs have the potential to transform how Nollywood movies are made, with community-managed film projects where multiple stakeholders would be able to vote on which actors are cast for specific roles, the storyline and anything else that needs to be decided.
Exciting Potential For Nollywood
Nollywood has many longstanding challenges and blockchain technology sets itself apart as a solution that can potentially fix them all. By facilitating new avenues of funding, enhancing transparency, combating piracy and providing access to international markets, blockchain will empower Nollywood’s filmmakers to finally fulfill their true potential and show the world their incredible storytelling powers.
“The power of blockchain lies in its ability to break down barriers and empower creatives, no matter where they are,” Oh said.
Some Nollywood filmmakers have already begun looking at the potential impact of blockchain. In February 2022, the Nigerian-British filmmaker Kenim Obaigbena launched Nollywood’s first-ever NFT short film, “A Second Husband”, which was shot back in 2020.
Obaigbena distributed the movie as a collection of NFTs, which provided holders with early access to the film, access to deleted scenes, a one-hour Zoom call with the writer, director or producer and a copy of the original script.
A Second Husband stars Nigerian actors Osas Ighodaro, Ade Laoye, Ibrahim Jammal, Udoka Oyeka and Diana Yekinni, and tells the story of a powerful woman living in Nigeria’s high-society, who embraces the idea of polyandry and takes on a second, younger husband, and how her first husband is left to deal with the consequences of that. The entire short movie is available to watch now on YouTube:
For Nollywood to truly embrace blockchain, it will require a significant cultural change within the industry and the creation of a robust, decentralized infrastructure. But the good news is that many of the key components are already in place with DeFi platforms like Creditcoin and distribution networks such as MovieBloc and Film.io.
With backing from Nigeria’s Ministry of Culture, the United Nations and startups like Gluwa, plus an enthusiastic community of crypto investors, Nollywood filmmakers may finally have an opportunity to showcase their talents on a global stage.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
