THE BUSINESS BEHIND THE FILM - "GET OUT", AND HOW IT RELATES TO NOLLYWOOD FILMMAKING
Get Out, a fictional horror story written, directed and produced by Jordan Peele and Blumhouse Productions., has been the biggest theatrical release this year. The film has garnered a reception that is reserved for Hollywood blockbusters such as, Fast and Furious or a Harry Potter film. Apart from the interesting perspective on racial issues in the United States, the business model used by Blumhouse Productions to create their films has been a disruptor to the financing of projects out of Hollywood. Blumhouse uses a venture capitalist model, whereby it invests in small budget films with the hope that one of the projects turns into a unicorn. While the business model is being recognized has a disruptor to Hollywood, many of the factors for success has been used in Nollywood for many years.
According to Jason Blum, founder of Blumhouse, his mandate is to create films on tiny budgets that return multiples on the initial investment. For example, Get Out was made for $4.5 million and has grossed close to $150 million at the box office. The return is roughly 33 times the initial investment.
Jason Blum highlights the important factors that he assesses before going forward with a film project – they are:
Clever story and thinking in the screenplay
Low investment capital requirement
Limited speaking parts to avoid unions
Limited number of locations with more inside shots
These four factors along with a slightly different compensation structure whereby actors and directors are paid less upfront but share in the upside of the film represent the best projects his company finances.
When I came across the characteristics laid out by Jason Blum, I realized that Nollywood has had the blueprint for many years, however, the industry needs to do a better job at identifying the target market for the films that are released.
I was eight years old the first time I met Nollywood actors at my uncle’s house in Lagos, Nigeria. At the time, Nollywood was still in its infancy, as such films were not shot in studios but inside the homes of the wealthy. My uncle at the time was approached by the production team to use his home for one of their films. I can’t remember where the business discussions ended, nevertheless, it provided me with the first opportunity to learn about how Nollywood manages the cost of production.
In 2016, Nollywood was featured at Toronto International Film Festival with eight films debuted at the event. The films selected with the exception of The Wedding Party. For example, The Wedding Party had a budget of approximately $200 thousand (N60 million) and grossed $1.4 million (N450 million) – a 7.5 x return on investment. The film had a relevant story line, good actors and delivered on its investment capital. This is not consistent across the board with 76 generating just above $200 thousand (N72.5 million) at the box office on an unusually high budget of $3 million (N600 million).
Hollywood has had its fair share of big budget films that have failed at the box office, so this is not unique to Nollywood. I saw the movie 76 and did not think it had accumulated an investment capital of $3 million, however, I did come to the conclusion that it had a strong story and should have done better than it did at the box office.
Given the proclivity of the Nigerian film industry to release both good and bad films, the impact on returns is not the overall business model but the way the target market is segmented in the industry. Filmmakers want a significant number of people to watch their films, but this does not work in an industry with more bad films than good films, resulting in a high level of piracy. Nollywood should stratify the market in a clear way to target the right audience for specific filmmakers and cater to that audience. This is the same mantra of successful startup companies, which is to find a small number of people who love your product or service rather than targeting many people who like your product or service. This is the dilemma I find with the Nigerian film industry; it is not specific enough in its target market.
Once this is done, I believe the industry will maximize the return on its investment on the good films because the business model blueprint has existed for many years and has improved over the years.