What Netflix’s Brisk Exit From Nigeria Signals For The Nigerian Music Industry

Netflix’s retreat from the Nigerian market comes in the wake of Amazon Prime’s exit from Sub-Saharan Africa. Since the earliest rumors of the exit surfaced on social media, Nollywood stakeholders and casual fans alike have expressed concern over what this might portend for Nigeria’s already beleaguered film industry. However, outside of the direct impacts on the film industry, the question of possible ripple effects on adjacent markets looms large. In 2020 and 2021 respectively, when Netflix and Amazon Prime, moved into Nigeria, jousting over an emerging market presumed to be laden with potential, the consensus was that the following decade would usher in a golden age for the local film industry. Today, whatever optimism that period held has deflated precipitously. Regarding the promise of a creative renaissance, the flurry of capital, expertise, and access heralded by these leviathan companies failed to effect this. While this alliance—between Nollywood and these foreign streaming companies—engendered acclaimed movies such as Lionheart, King of Boys and Gangs of Lagos, it failed to stave off the industry-wide slump towards monotony and creative indigence. Movies have remained plagued by vapid storytelling and an incestuous dynamic where directors casually recycle the cast and set of concepts. 

Netflix’s exit, however, is the result of the country’s fraught economic climate. The only reason a globe-trotting behemoth like Netflix or Amazon Prime would scamper out of the country a mere eight years after its arrival is that the economic indices speak to the prudence of an exit. The antecedents of this exit are however more far-reaching. Streaming platforms experienced historic growth during the Covid-induced lockdown. However, in the years following, as the world reopened and people traded their couches for work desks, a sizable portion of this growth was whittled away. So much so that in 2022, when Netflix announced losing 200,000 subscribers in the first quarter, with an estimated 2 million more over the next quarter, its stock price plunged by 35%, accounting for a loss of around $50bn in value. The slew of global conflicts—in Ukraine, on the Gaza strip, in Lebanon, and Iran’s axis of resistance—as well as geopolitical standoffs, most notably the rising tension between the US and China, have also rendered global conglomerates more apprehensive towards overseas markets. 

This forms the backdrop against which Netflix grapples with the economic maelstrom in Nigeria. The increasing economic hardships in the country have steeply raised the cost of doing business and very nearly eroded the middle class with their propensity for spending disposable income on comforts such as the streaming services provided by Netflix and Prime. The weakened Naira also means that whatever revenue a global company like Netflix gleans from the Nigerian market would prove ridiculously paltry when converted to dollars. And while Netflix and Prime have been some of the most prominent foreign companies to overtly writhe from the financial strain of the Nigerian economy, they are by no means the only ones affected. MTN consistently recorded quarterly losses running into hundreds of billions of Naira from the first quarter of 2023 through to the second quarter of 2024. The local tech scene has similarly been rocked by an austere fallow period that has seen firms fall behind on their financial projections. This precarious business climate, further exacerbated by Netflix’s withdrawal, has heightened concerns regarding the Nigerian music industry, which until now has proven formidable against the uncertainties of the Nigerian economy. If industry upon industry has witnessed significant downturns (first tech and now the film industry, on account of the exit of Prime and Netflix) and retractments from foreign investors, is there any reason to be worried about the Nigerian music industry, which depends heavily on foreign investments? 

The Nigerian music scene has blossomed in fits and starts, stretching back to the gilded era of the 70s—helmed by stalwarts like Fela and King Sunny Ade—to the provenance of Afrobeats in the 2000s, an uprising that had acts like Psquare, 2Baba and D’Banj as its pioneers. This current chapter in the lore of Nigerian music, encapsulated by the epithet “Afrobeats in the World,” is however singular in its scope and magnitude. Never before has Nigerian music been this sought-after. Never before have Nigerian songs made inroads into the elusive Billboard Hot 100 with such aplomb. Never before have global tours by Nigerians been so prevalent. This external-facing posture of the Nigerian music industry means it is significantly insured against the headwinds at home. In contrast with Netflix Nigeria, created and curated for a Nigerian audience, Nigerian music is increasingly a foreign-first product. While the local market still holds significance, especially culturally, the bulk of the industry’s largesse comes from the foreign market; by way of streaming revenue, publishing and licensing deals, ticket sales, and endorsement deals. All this is to say that in the short run, Netflix’s exit is unlikely to cause any sustained ripple effects in the Nigerian music industry because the larger part of its revenue comes from overseas. 

Ruling out long-term impacts would however be an overly optimistic, if not delusional, projection. Uncertainties and downturns in adjacent markets can make investors unnerved. The “dot-com crash,” which saw the valuation of internet companies crater precipitously, triggered industry-wide sell-offs in the broader tech industry. Similarly, the 2008 global financial crisis affected not just the banking industry but also real estate, insurance, equity markets, and retail. Long-term prospects aside, the major lesson to be gleaned from Netflix’s exit is that these foreign companies are not here out of affection for our movies or music, they’re here to shore up their profit margins. The moment, it becomes financially imprudent to continue investing, they will jettison the Nigerian market as swiftly as they dived in. 

Afrobeats’ upward climb is contingent on a steady stream of investment which in turn depends on the economic viability of the genre. Therefore imperative for artists, executives, and relevant stakeholders to make calculated plays toward the long-term viability of Nigerian music. Today the biggest threat to the future of the genre is a shortfall of new breakout acts, a dilemma that has been addressed in this article. There is no absence of exciting talents or funding, the main stumbling block is more straightforward: not enough people care about creating institutions devoted to talent development. This situation has led to the conspicuous absence of breakout stars this year and risks undoing the decades of assiduous effort that has culminated in Afrobeats’ current gilded reputation.