Nexflix struggles to adapt to Africa’s cinema market

Cultural and infrastructural dynamics influence the adoption of global platforms

Originally published on Global Voices

In 2020, Netflix, the streaming giant, officially launched its presence in Nigeria, becoming the first major platform from its league, including Hulu and HBO, to enter the Nigerian market. However, five years later, reports suggest Netflix is facing financial challenges in the West African nation. In an interview with Nigeria’s Vanguard News, comedian AY Makun clarified that while Netflix is not planning to exit the Nigerian market, the company’s expenditures in Nigeria have far exceeded its earnings, prompting a reassessment of its business model.

In contrast, Netflix has maintained its dominance in South Africa since its launch in 2016, commanding 31 percent of the subscription video-on-demand market with an estimated 300,000 to 400,000 subscribers, most of whom access the platform via smartphones. This contrasting experience has ignited discussions among African social media users about Netflix’s strategies on the continent.

African users’ concerns about Netflix

Despite the debunking of rumors about Netflix’s potential exit from Nigeria, a Nigerian user on X (formerly Twitter) shared her analysis, reflecting growing concerns about the streaming giant’s long-term strategy for the country:

We’ve heard that Netflix isn’t leaving Nigeria, but there’s still cause for concern, as the streaming giant’s long term strategy in the country becomes even more uncertain by the year.

Here’s why pic.twitter.com/Uz8S4PHJ6V

— gst (@wearegst) December 7, 2024

On LinkedIn, Bhuti Mopai highlighted several reasons behind Netflix's challenges in Nigeria: “South Africa embraced the streaming service due to factors like a preference for international cinema, robust internet infrastructure, and Netflix’s investment in local productions. Meanwhile, in Nigeria, Netflix struggled to compete with Nollywood, one of the largest and most culturally significant film industries globally. Economic barriers like high subscription and data costs also hindered adoption.”

Another user added: “Netflix’s struggles across Africa, outside of South Africa, stem from reliance on middlemen, undervaluing creators, and failing to adapt to local markets.

South Africa’s established film infrastructure supports Netflix’s success. However, in countries like Nigeria, cheap deals and high internet costs alienate creators and limit access. Platforms like Showmax excel by investing directly in local talent and offering affordable services tailored to African audiences.

Netflix’s failure lies in ignoring economic realities and undervaluing content. Without restructuring to prioritize direct engagement and fair deals, it risks losing to competitors committed to Africa’s diverse film industry.”

Growth of the African film industry

African cinema has been booming in recent years. According to UNESCO, African cinema generates approximately USD 5 billion annually but has the potential to grow to USD 20 billion and create 20 million jobs per year. Nollywood reigns as the second-largest film industry globally, boasting an astounding 2,500 films annually, second only to India’s Bollywood and twice the number of movies released in the United States each year. Ghana’s film industry is also emerging, producing 600 films annually, while South Africa has a long history of creating award-winning films, from Sarafina to Tsotsi (an Oscar winner in 2006) and the sci-fi thriller District 9.

While a recent report by Tech Labari revealed that Ghana's film industry is struggling due to inadequate infrastructure and equipment, piracy, competition from foreign films (particularly Nigerian productions), insufficient funding, and a lack of government support, there are signs of hope for the industry. In 2022, US-based production and infrastructure company Pixel Ray Studios announced plans to establish a modern film studio in Ghana, to position Ghana as a film hub and also a shooting destination. Additionally, British actor Idris Elba told BBC his plan to relocate to Africa within the next decade to support the continent's movie industry. Elba, whose mother is from Ghana and father from Sierra Leone, plans to build a film studio on Tanzania’s Zanzibar islands and another in Accra, Ghana's capital.

Reasons for Nollywood's success

Before exploring why Nollywood is Africa's most successful film industry, it is important to mention the ongoing debate surrounding its name. The term “Nollywood” refers to Nigeria's film industry, but some stakeholders have expressed concerns, arguing that the name, coined by a foreigner, represents a form of cultural imperialism. Critics also contend that the term mimics Hollywood rather than embodying a uniquely African identity. 

In 2024, Nollywood generated approximately USD 7 million (NGN 11.5 billion) from ticket sales, a remarkable 60 percent increase from the USD 4.4 million (NGN 7.2 billion) recorded in 2023, according to the Cinema Exhibitors Association of Nigeria (CEAN). This impressive growth highlights Nollywood's expanding influence.

Beyond Africa, Nollywood captivates global audiences with its distinctive storylines and talented actors. Nigerian filmmakers leverage digital platforms like YouTube to reach international viewers. Additionally, Nigerian content creators have taken advantage of the country’s population and partnerships with Netflix, Amazon Prime, and international Cinema houses like Genesis, FilmHouse, and more to connect to the much-coveted 18–25 demographic, further solidifying its role as a major player in the global entertainment industry.

Filmmaking in Nigeria is regionally segmented, reflecting the country's ethnic and religious diversity. Distinct industries such as Igbo language, Yoruba language, and Hausa language cinema have emerged, catering to the cultural and narrative interests of their respective regions. However, the English-language film industry acts as a unifying space, integrating contributions from these regional industries.

Nollywood’s strength lies in its storytelling, which authentically captures African culture and everyday life, resonating deeply with audiences. Unlike Hollywood’s high-budget productions, Nollywood thrives on modest budgets, showcasing impressive creativity and efficiency, often completing films in days rather than months.

Women have also taken a leading role in Nigeria's entertainment industry. Funke Akindele, an actress turned producer, is behind four of the highest-grossing Nigerian films of all time. On YouTube, Ruth Kadiri, with 2.6 million subscribers, draws millions of viewers worldwide with her compelling movies.

The highest-grossing Nigerian films of all time in Nigerian cinemas include “Everybody Loves Jenifa,” “A Tribe Called Judah,” “Battle on Buka Street,” “Omo Ghetto: The Saga,” “The Wedding Party,” “Chief Daddy,” “Queen Lateefah,” and “Alakada: Bad and Boujee.” 

Some captivating Nollywood movies on Netflix include: “Òlòtūré” (2019), “Òlòtūré: The Journey” (2024), “Shina” (2023), “Ìjọ̀gbọ̀n” (2023), “Aníkúlápó: Rise of the Spectre” (2024), and “Lisabi: The Uprising.”

Nollywood has given rise to celebrated stars such as Genevieve Nnaji, Ramsey Nouah, Richard Mofe-Damijo, Mercy Johnson, Patience Ozokwor (Mama G), Chinedu Ikedieze and Osita Iheme (Aki and Pawpaw), Nkem Owoh (Osuofia), and John Okafor.

Future of Netflix and the African film industry

According to Bhuti Mopai, Netflix's success in South Africa can be attributed to the lack of a strong local film industry, raising significant questions about the future of local storytelling in the face of global media giants. Whether Netflix will address the concerns of African users—including high subscription costs, reliance on intermediaries, undervaluing creators, and failure to adapt to local markets—or lose ground to competitors who better navigate Africa's infrastructure and cultural dynamics remains uncertain. Similarly, it remains to be seen whether other African countries, including South Africa and Ghana, will invest more in strengthening their local film industries to compete effectively.

Written by Zita Zage