The Licensing Manager of FilmOne Entertainment, tells us about the process of getting Nollywood's biggest films on Netflix and increasing the value of Nigerian productions.
In 2015, Netflix contacted Kunle Afolayan to acquire his psychological thriller October 1. That conversation led to one of the first Netflix-Nollywood deals. Since then, more Nollywood films have gone on the streaming platform. The number has increased in recent months, with 5 to 10 Nollywood titles added every month after FilmOne Entertainment, one of Nigeria's biggest film distribution companies, became the streamer's leading supplier of Nollywood movies.
The company has stapled a huge Nollywood presence on the platform. But this hasn't been well received by everyone. A section of viewers and stakeholders feel the quality of some of the films are low for Netflix standards. Filmmakers have also accused FilmOne of lowballing the industry as Netflix now pays a fraction of what it used to pay for Nigerian films.
Ife Idowu, the Licensing and Contracts Manager at FilmOne Entertainment, disagrees. "My question to those producers is, 'do you know if Netflix benefitted from your films being on the platform?'" he says over the phone. "You don't expect a buyer to keep buying stuff at a particular price if what he is gaining from that title in terms of subscription or eyeball is inconsequential to his books."
Idowu joined FilmOne in 2017 as a practicing lawyer on the licensing and contract team and has quickly risen through the ranks; he now heads the licensing team and oversees the licensing of Nollywood films to Netflix. We speak to him about these deals, how they happen and FilmOne's role.
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This interview has been edited for clarity
What role does FilmOne play in the Netflix-Nollywood acquisitions?
We manage the films we have signed on and act as an aggregator for independent films. We are like a content house; we get content from different producers, house them and make sure they are in the right format for Netflix. Netflix can't deal with every single producer on the planet so they need a supplier. We are the middlemen in the deal. We make sure both parties get the deal done, while we get our commissions and fees. There are other suppliers in the market, but I think we have over 75 percent of the Nollywood content on Netflix. We have proven to Netflix and other partners over the last three to four years that we have capable hands, led by senior management, Ken Okwuosa and Moses Babatope.
Basically, we seek out for these films, package them, look out for the best deals, deliver and work with Netflix in terms of release strategy and roll-out.
How do the acquisitions work, do the producers come to FilmOne or the other way around?
It works both ways. We get film submissions from indie producers and also go out to meet indie producers and production studios that churn out content. For example, Inkblot Productions are a content house always producing films. We have partnered with them on certain productions. The Set Up is a production between FilmOne, Inkblot, and Anakle Films. So there are times we come together to collaborate and there are times we get submissions.
When people submit to us, our team reviews it and we say okay it stands a chance of getting a deal or making an impact in the distribution space or getting revenues post-cinema or during cinema.
How does FilmOne Entertainment determine the value of a Nigerian film coming on Netflix?
That's a very interesting question. The evaluation of a film is based on several factors. These include box office success, critical acclaim, star power, production quality and storyline. These factors come together to determine the right valuation for a film. The way it works is, we manage the rights of the film sometimes, so we understand what has been done and what has not been done. If someone comes for it, we find out what they want to do and ask about the platform's territory. If the platform is in North America, we know how much to charge because this is a film that has not left the shores of Africa. So there's some form of exclusivity around the title to that platform.
As I said, there are different metrics used in valuing a film. We work with the producers in valuing their movies and ensuring we don't lose the deal. If you price your film too high, the buyer will back out. However, we try not to lowball ourselves because producers are putting in a lot of work to ensure films are well produced. Obviously, there's still some work to be done, but in the last couple of months, our films have gotten better. At the end of the day, you need to make sure producers are happy with whatever fee you are securing for their titles and look for how to increase that fee over time by searching for multiple platforms.
What are the different kinds of deals that happen?
The deals are peculiar to each film. There are original acquisitions, there are licenses for a limited period and there are general licenses for a worldwide release for a particular amount of time. Netflix and other platforms want the best content, so if a film is coming out of cinemas and it is a blockbuster, they are going to pay top money for that particular film depending on what we agree on.
What percentage of the fee does FilmOne get?
It depends. There are films for which we take as high as 30 percent [of the licensing fee] depending on how much work we have done, and there are films for which we take as low as 20 or 15 percent. Most times, it's between 20 to 30 percent of the license fee of the film or what both parties agree.There are times we invest our money in marketing and promotion at no cost to the producer — this drives up our bargaining power. So it all depends on the negotiation or commercial terms between the producer and FilmOne on that particular deal.
When our films perform well on Netflix, does it change the conversation between Netflix and Nollywood?
Yes, it does. The more our films do well on Netflix, the more traction, impression and subscription are generated from this region. And the more views our films get on Netflix, the more leverage we have to demand more in terms of finance.
I was talking to someone the other day and he asked, "Do they pay $10 million for Nollywood films?" I told him you don't expect Netflix or any buyer to buy our content the same way they purchase foreign content. Our films are mostly for Africans in Africa or Africans in the Diaspora. When we bridge that gap by ensuring our films are relatable to people who do not have any roots in Africa or Nigeria, then we can start demanding higher fees. Once we cross that line and start producing films that cross cultures and territories, we will be there. Right now, we aren't doing badly; we are doing well in terms of financing and getting the right revenues for the films. The only way is up.
There are people who say FilmOne sells Nollywood short, that Netflix only pays a fraction of what they used to pay for Nigerian titles. What do you say about that?
My question to those producers is, "do you know if Netflix benefitted from your films being on the platform?" You don't expect a buyer to keep buying stuff at a particular price if what he is gaining from that title in terms of subscription or eyeball is inconsequential to his books. The company has to tailor-fit his budget to meet what it is getting back. If a buyer like Netflix spends ₦2 five years ago and gets way less than 50 Kobo in subscriptions from your content at the end, you don't expect them to give you the same ₦2. It's business. People can say it [that FilmOne lowballs producers], but I know that those leading our company are always striving to ensure producers get realistic values for their films.
You don't expect a film that made ₦20 million in cinemas to get the same fee as a film that did ₦400 million. Some producers can say the prices are going lower, but they aren't. We need to make sure our films are relatable to people beyond Africa. Too Hot to Handle was number one on Netflix for over two weeks, but our films are only number one in Nigeria and other African countries. From the business perspective of a buyer, why should they pay the same amount for a film that will get traction all over from 150 Million subscribers for a film in a country or region where they have less than two million subscribers?
People can come out and say this and that, and I will say it is not true. We have done three batches of deals with Netflix, and we can see a gradual projection in prices – increase in valuation – because our films are getting better and there's more traction on Nollywood films. FilmOne has never sold anyone short, maybe other suppliers have. We keep an open book, and I can say we go the extra mile to make sure we get the best deals for producers. I don't think any distribution or content house goes to as many film markets and film festivals as FilmOne to get multiple buyers or multiple revenue outlets for our films. If not for COVID-19, we were supposed to be in Cannes for the market. We were in Berlin [for the Berlin International Film Festival]. No film market has happened in the world that a FilmOne representative was not present with a bunch of Nollywood films to seek out world-leading platforms to get revenue for producers.
If I get you correctly, you are saying the first set of Nollywood-Netflix deals didn't profit Netflix that much for them to continue operating at that level?
I won't say it that way. What I'm saying is, acquisition fees will grow when there is an exponential increase in subscribers or demand for our content. For example, Queen Sono is a Netflix original. Because of the market they have in South Africa, they were able to invest in an original which has gotten renewed for a second season.They were only able to do this because it has done well. You can see the traction and that it profits Netflix to do it. It is all business. Once we remove sentiment away from content and films, we look at numbers.
So like I said before, I don't think we have lowballed any producer. We are always looking out for their best interest because without the content of the producers, the platform will not have content. But at the same time, they can only acquire content based on what they are getting back. That's why we see a lot of platforms come up, acquire films and six to twelve months into operation, they can't operate anymore because the budget deficit in terms of subscription and acquisition doesn't match up.
Did FilmOne play a part in Netflix finally setting a base in Nigeria?
Based on the fact that our last deal with them in 2019, for 33 films including King of Boys and the Wedding Party series etc. did relatively well for our market, we were able to make them see the need to come here and fully establish some form of presence. I won't say we played a major part. They saw the growth potential in Nigeria, hence their visit and establishment of Netflix Naija.