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Kenya’s film industry is in revival mode

FINANCIAL STANDARD
By Frankline Sunday | October 6th 2015

Passport to America is a reality television series fresh out of Nairobi’s Riverwood. The show follows the challenges of a Kenyan family that has just relocated to America and is trying to fit in.

Shot in the US with high-definition equipment, the show’s format is a mix of reality television and dramatisation that explores several themes, including religion, family life and belonging.

Passport to America is the latest in a series of productions from Riverwood, the nerve centre of Kenya’s film industry, which is now witnessing a renaissance that promises to improve the fortunes of content producers.

Earlier this year, Treasury Cabinet Secretary Henry Rotich announced the Government would be waiving the withholding tax payable by foreign film producers, actors and crew members.

In addition, Mr Rotich announced an incentive to exempt the goods and services used for film making from value added tax (VAT), and a revolving fund to finance local filmmakers.

Unlock potential

These moves are among increased efforts from both within and outside Kenya’s creative industry to unlock the potential of the Sh200 billion industry.

In May this year, Sports, Culture and Arts Cabinet Secretary Hassan Wario led industry stakeholders on a trip to Hollywood. The Kenyan delegation hosted a luncheon for executives from major studios, including CBS, Disney and Lionsgate, at the glitzy Four Seasons Hotel in Beverly Hills.

The mission for Mr Wario and his colleagues was to woo Hollywood back to Kenya, which has lost much of the allure it had in the 80s when Meryl Streep played Karen Blixen in Out of Africa.

The news that jolted Government stakeholders into action was that South Africa was also in the running for, and just might clinch the bid to become the set of Africa.

Africa is a new drama movie based on Kenyan anthropologist, conservationist and head of the Kenya Wildlife Services (KWS) Richard Leakey.

Although in early development stages, the movie has garnered much interest from critics because it is directed by Hollywood star Angelina Jolie, and might have her husband Brad Pitt cast as Dr Leakey.

In the intervening years, South Africa and Nigeria have shot past Kenya in developing robust content industries, with the latter even exporting content to the East African market using Kenya as a gateway.

“Nobody would ever have believed that Kenya would be a viable market for Nigeria’s film industry, but now we are Nollywood’s fourth-largest market in Africa,” said Mwaniki Mageria, the managing director of Balozi Productions, an umbrella outfit for the production and distribution of Riverwood content.

Nigerian competition

Not only is Nigeria’s film and music content dominating Kenya’s airwaves, but the country’s broadcasting industry is leveraging on economies of scale to wean its citizens off Western content.

Kenya is still grappling with high costs. Data from consulting firm PricewaterhouseCoopers (PwC) shows that an advertising spot on Nigerian television is half the cost it is in Kenya.

This is because Kenya has high advertising agency commission rates, primarily because the advertising industry is dominated by a handful of agencies who account for much of the big ad shillings.

However, in Kenya’s defence, the country’s quality, advertising skill set and technology is reportedly higher, although Nigeria is quickly catching up.

The high commission rates thus lock out local content producers, and they lose out to more established counterparts who have larger budgets and better networks.

Lizzie Chongoti, the CEO of the Kenya Film Commission, acknowledges that the playing field is not balanced and that the industry needs to work together to ensure local productions get enough airplay.

“Buying airtime is very expensive, hence many content producers cannot compete with Nigerian and Mexican soap operas,” she said.

“We have made proposals to Treasury to put the necessary incentives in place to encourage the production of advertisements locally, because as it stands, a lot of the big ads are made outside the country.”

Ms Chongoti added that content producers should focus on mass production and making their work more accessible at a lower price to capitalise on volumes.

“Exclusive rights make Kenyan content more expensive, so we also need to find a way of sharing it with more people so that it becomes cheaper to distribute.”

Primary motive

For content producers, however, this is an issue of the chicken coming before the egg, where good content takes a lot of money to produce.

Therefore, the primary motive for the average producer is to get a return on his or her investment. Television stations and content distributors, equally, look for the most cost-effective way to run their business.

“Broadcasters have gatekeepers, and for them, the bottom line is to make the company money,” said Mr Mwaniki.

“If a Nollywood guy comes and sells you 100 movies for $100 and a Kenyan brings you one movie for $500, then you go for the option that saves the company money.”

Kenya’s digital migration process has been viewed by many as a turning point for the local creative industry.

Not only does the migration process open up distribution channels to almost infinite potential, new legislation governing content ensures local television channels are obliged to carry content from local producers.

ICT Cabinet Secretary Fred Matiang’i said, along with the new digital migration laws, local broadcasters are expected to have 60 per cent of their shows produced locally. The proposal was later reduced to 40 per cent to allow for a more gradual shift as the industry’s capacity grows.

However, this policy is proving difficult to effect as content producers and distributors stand on either side of the moat, arguing their case.

“There is inadequate capacity in the local content industry to have such a high content quota for local producers, and at the same time, we are also proposing to have news and morning shows classified as local content,” said Hanningtone Gaya, the chairperson of the Media Owners Association.

But Mwaniki countered: “News cannot be local content because we view news as an obligatory function of journalism. Whether there is local content or not, you still have to tell news at the end of the day.

“In our understanding, local content is where people come from the creativity point of view, where they write something, fiction or non-fiction, and produce it on sets, package it and sell it.”

He added that the Government should introduce hefty taxes for content that comes from outside the country to protect the local industry. Currently, foreign producers “just come in for free and they have distribution rights the same as Kenyan content producers”, he said.

“Some people might call it protectionism, but other markets do it to support their respective content industries, and we believe that some protectionism could go a long way in propping up Kenya’s content industry.”

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