The Black Book produced and directed by Editi Effiong is the biggest movie from Nollywood on Netflix, having notched 11 million views since it was released on the global streaming platform. It is also the most expensive movie ever made in Nollywood, given its $1 million budget.

But The Black Book’s success has little to do with the Nigerian audience on Netflix, who, according to the latest data, are only 169,600 paid subscribers out of a population of 106 million bankable adults. Effiong did confirm that more South Koreans watched the movie than Nigerians.

“This still feels so surreal. More South Koreans watched The Black Book than Nigerians,” he said on Wednesday.

South Africa has by far the most paid subscribers on Netflix with 1,172,800 subscriptions, accounting for 73.3 percent of the 1.6 million subscribers the streamer has in sub-Saharan Africa, according to a report by Omdia. The country also commanded 69.5 percent of the $135 million subscription revenue from the region in 2022 – meaning Netflix made $93.82 million from South Africa alone.

A spokesperson at Netflix said they do not know where Omdia got their numbers from because Netflix doesn’t reveal regional numbers.

“What we know is that Netflix currently has over 247 million paid members in over 190 countries,” the spokesperson said.

Nonetheless, Netflix is not the only streaming platform facing slow adoption in Nigeria. Last week, Jason Njoku, CEO of Iroko TV, a Nollywood-focused streaming platform, responded to an article written by a media outlet alleging there was a poor run of revenue in the company.

While IrokoTV has been facing declining subscriptions, Nigeria has never been the source of its primary revenue despite huge investments in the country.

“In summary, between 2015 and 2020, we invested (read lost) $30 million in Nigeria, and it made zero sense to continue prioritising the market. In 2015, we launched our first Android growth strategy, priced at N5,000 annually ($30). When we stopped last month, that N5,000 was equivalent to $5. So we focused on customer acquisition and productising Africa and just reverted to where 80 percent of our revenues were coming from; North America and Western Europe,” Njoku said.

Nigeria’s much-touted potential as a major market for streaming services and entertainment in general remains in the realm of rhetoric. While it boasts Africa’s largest population of mobile phone users, internet penetration remains very low – and has even declined in recent times. In 2023, internet penetration in Nigeria bucked the trend as it is yet to record growth in eight months of tracking the progress on the Nigerian Communications Commission (NCC) platform. Rising poverty and high unemployment rates continue to crimp people’s income. It has got worse in 2023 following the removal of petrol subsidy and naira devaluation, which have pushed prices of goods and services to record highs.

Nollywood, the largest movie industry in Africa and the second largest globally in terms of production in a year, has grappled with these problems since its inception. The growth the industry has experienced so far has come more from trying to skirt around these problems and find a safe ground to earn revenue sustainably. In the course of searching for a safe landing, producers have had to enter into some partnerships. For example, in the days of video cassettes and DVDs, alliances were forged between some producers and marketers at Alaba market in Lagos to help pirate their movies. Currently, attention has moved to streaming movies on various streaming platforms like Netflix, Prime, YouTube, Showmax and Iroko.

Since the streaming numbers have significantly grown across the different platforms, shrinking consumer income has been one of the biggest stumbling blocks to the growth of streaming services in the country. This is why streaming platforms will produce content within the local film industry and push their marketing abroad to attract an audience that is willing to pay. Nigerians in the diaspora, for instance, constitute a significant portion of the target market, because they possess a healthy disposable income.

“The answer is probably a combination of poverty and illegal access without consequences. Illegal access is driven by poverty, ignorance and futile copyright policing. To summarise, Nigerians have a preference to not pay for movies and shows that they can get for free on bootleg,” said Nosa Ugiagbe, a chartered accountant.

Earlier in April, Netflix released a 48-page report in which it showed it has invested a total of $125 million in South Africa and $23.6 million in Nigeria since it began operations in both countries. This is despite Nigeria having more titles (286) than South Africa (186). The Omdia report showed that Netflix has invested over $175 million in general in the sub-Saharan region since 2016, creating 12,000 jobs in South Africa, Nigeria, and Kenya alone.

Njoku said the subscription video-on-demand industry grapples with the rising cost of creating content.

“The economics are brutal, and survival is of the lord. For the last 18 months, as the narrative changed, the global behemoths of Warner and Disney have been purging content with massive accounting losses as they have pulled billions of dollars off their platforms. They were doing that while generating billions in profits and free cash flows,” said Njoku.