Nollywood and Afrobeats - Investing in African Music, Film, Fashion, Gaming, and Sports
Africa's Booming Creative Industries
Hello everyone,
Africa's creative industries with music, film, fashion, mobile gaming and sports is a dynamic and growing sector of the continent’s economy.
It doesn’t only contribute to economic growth and employment, but also plays an important role in showcasing Africa’s rich cultures and heritage on a global stage.
So in today’s deep dive, we take a look at the power of Africa's creative talents, and the growing influence they have worldwide.
🕐 In a Hurry? Here's a 1-Minute Summary:
Creative industry: Africa's creative industries are thriving globally, with its fashion designers making waves at major fashion weeks, musicians and filmmakers winning international awards and collaborating with global stars, and genres like Afrobeats gaining massive global traction.
Economic impact: Nollywood, as the world's second-largest film producer, and Afrobeats spearhead Africa's creative boom, significantly contributing to job creation and economic growth alongside the thriving fashion and gaming industries.
Challenges & Opportunities: Challenges like limited funding, market access, and copyright issues persist. However, despite these hurdles, the surge in mobile usage and global digital platforms offers new opportunities for creatives to share their work globally and monetize their content.
International interest: The industry is attracting attention from strategic investors, including major firms like Netflix, Amazon Prime, Spotify, and Warner Music Group, who are engaging with local production companies for content licensing. However, there’s limited attention of private capital and institutional funds.
Investment opportunities: There’s significant investment and partnership opportunities in Africa's creative industry, including enhancing internet access to increase music revenues, funding high-budget Nollywood movies, facilitating collaborations between African fashion brands and global retailers, tapping into the growing mobile gaming market driven, and investing in African sports.
⏳ Ready for a Deeper Dive? Here's the Breakdown:
Africa’s creative industry is booming
Africa's creative output is significantly growing and influencing global fashion, music, and cinema.
African designers are regulars at major fashion weeks, introducing the world to vibrant textiles and patterns. Musicians and filmmakers are not only winning international awards but also collaborating with global stars. In recent years, Afrobeats has emerged as one of the most significant cultural exports from the continent.
Festivals and online platforms play a major role in this global cultural exchange.
Afrobeats, Nollywood, means nothing to you? Here’s some pointers to give you a glimpse:
According to Spotify, the Afrobeats genre has seen a remarkable rise, growing by 550% since 2017 and amassing over 13 billion streams in 2022. The record-breaking track, "Calm Down," by Rema featuring Selena Gomez, is the most-streamed Afrobeats song on the platform, crossing the 1 billion stream mark and earning numerous awards.
Why don’t you tune in?
Next time you scroll through Netflix, why not add some of those “Nollywood” (Nollywood is the nickname for the Nigerian film industry) movies to your Watchlist:
The Black Book (2023) - Recently trending on Netflix, it tells the story of a father who takes justice into his own hands and fights a corrupt police gang, after his son is framed for a kidnapping.
Lionheart (2018) - Directed by Genevieve Nnaji, this film made history as Netflix's first original film from Nigeria. It tells the story of a woman who steps up to run her father's company amid family and societal challenges.
King of Boys (2018) - Directed by Kemi Adetiba, this political thriller dives into the world of power, politics, and survival, as seen through the eyes of a powerful businesswoman and underworld boss.
The Wedding Party (2016) - A romantic comedy that became one of Nigeria's highest-grossing movies. Directed by Kemi Adetiba, it follows the shenanigans that occur during the preparation of a lavish wedding.
Citation (2020) - Directed by Kunle Afolayan, this drama is based on true events, focusing on a postgraduate student who has to fight against sexual harassment from a lecturer.
Nollywood is the world’s second-largest producer of movies
Africa's creative sectors are increasingly recognized for their economic contribution and job creation.
The film industry in Nigeria (“Nollywood”) is the second-largest producer of movies globally, turning out over 2,500 movies per year and is expected to generate nearly $15 billion by 2025.
With over 300,000 direct, and more than 1 million indirect employees, the industry is one of the country’s largest employers.
Similarly, the music industry, with genres like Afrobeats gaining international fame, has seen exponential growth, contributing to both local economies and global markets.
“It’s like there’s a gold rush going on right now. Everybody’s rushing to West Africa to sign talents. The major record labels are coming in and investing heavily, changing lives and providing jobs. I would say music entertainment is one of the top labor employers in Nigeria when you look down the value chain. Even to the level of the influencer, making videos for songs to post on TikTok puts money in their pocket. It’s creating a sustainable ecosystem.” - Oluwaseun Lloyd, the general manager of Sony West Africa, quoted from the Business Insider Africa.
Fashion is another area where Africa shines, with designers gaining international acclaim, thereby boosting exports and linking traditional crafts with contemporary designs.
Key challenges lie in funding, market access and copyright issues
Despite the progress, the creative industries face challenges, including limited access to funding.
Investments are needed into enabling assets to improve production standards - especially in the movie industry - and physical infrastructure for the sports sector.
Moreover, especially the fashion and sports sectors suffer from limited access to global markets due to trade barriers or inadequate distribution networks.
Also the enforcement of copyright laws and the protection of intellectual property rights remain significant challenges in many African countries. Creatives often find it difficult to safeguard their work from piracy and unauthorized use, impacting their revenue and motivation.
But an increasing number of mobile users and global digital platforms promise opportunities
The rise in mobile phone use is opening new doors for sharing and making money from creative work - especially when it comes to music and movies.
This means more and more content is being made just for local viewers and listeners by a vast pool of young, talented people.
Platforms like TikTok enable local creatives to earn a living, for example, through advertising revenue from the TikTok Creator Fund or sponsoring.
At the same time, big online platforms like Spotify, Netflix, and TikTok are making it easier for artists to show their work to people all over the world, share their content more easily, and try out new kinds of art and entertainment.
This not only helps artists get their work out there but also lets people from anywhere enjoy all kinds of stories, music, and art.
Africa's Creative Future is catching the interest of (strategic) investors
The growth of Africa’s creative industry, especially in online content, music, movies, and clothes, has grabbed the interest of global investors.
Big companies like Netflix, Amazon Prime, Spotify, and Warner Music Group are making deals with local production companies to bring their services to Africa and license local content.
However, apart from such strategic investors: Right now, the creative world mostly is financed through grants and is - at times - seen more as a philanthropic investment.
Yet, it has the potential for economic growth and returns. But, money in the creative world needs to be patient.
Prosper Africa pointed out some interesting opportunities for investments and partnerships in Africa’s creative industry in their recent report:
🌐 Investing in more affordable and improved internet access could significantly boost music revenues in Africa. Currently, ringtones, which don't require an internet connection, account for one-third of the continent's music revenue. However, artists receive only 30% of these revenues from telco companies.
🎬 Looking at Nollywood, investing into more high-budget movies will boost success both locally and internationally
👗 Collaborations with global brands and retailers would increase African fashion brands’ market access and mitigate challenges such as low volumes and limited predictability
📱 Because so many people have mobile phones, mobile games are a growing opportunity in Africa's $590 million gaming world. Companies like Carry1st are quickly growing their presence across the continent.
🏀 Investing into African sports - the NBA Africa is a great example of a strategic investment and partnership that has huge potential.
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Thanks for reading,
Carolin
Disclaimer: All information provided is not intended to serve as investment advice. Any mention of industries or countries should not be taken as an endorsement.