By Tadeniawo Collins
Kene Mkparu is the Group MD/CEO of one of Africa’s fastest growing cinema chains presently – Filmhouse Cinemas and FilmOne Distribution. He has over 20 years experience in business management and cinema operations management.
Starting with just two outlets in December 2012, his company has seen a remarkable growth to 25 outlets across Nigeria in just 3 years. Prior to setting up Filmhouse Cinemas, Kene was CEO, FilmAFRICA UK and MD of Genesis Deluxe Cinemas.
He has also produced three films and won the 2013 Creative Entrepreneur Award: Film Industry Category, the 2007 Best Producer Award at the Africa Films Awards, UK for his film, ‘The Successor’ and several Odeon Cinemas Company Marketing awards between 1992 and 2007.
In this exclusive chat with NET, he talks about the new film distribution system and its attending benefits for filmmakers in Nigeria. He also discusses his passion for the cinema business, 2015 plans and he talks passionately about the scourge of piracy and how he feels it can be curbed.
He spoke along with Moses Babatope, the ED/COO, Filmhouse Cinemas and FilmOne Distribution.
The new movie distribution system in Nollywood; how well has it been embraced by industry players?
It’s still a slow process because we’re trying to put structures in place for various facets of distribution. We’re trying to ensure that the marketing aspect is more robust. On the part of filmmakers, a lot of them don’t really pay attention to what needs to be done to make a film successful at the box office. So, we’re doing a lot to educate them and also working on securing content as it moves from cinema to cinema. We’re also doing a lot on box office reporting which lets the filmmakers know how their films have fared at the cinemas. It’s really a slow process, but a lot of filmmakers are getting a better understanding of the process now and everything it involves.
I think, yes, education has a big role to play in this system. People need to understand what it takes for their film to be profitable at the cinemas after production. It is happening though; there have been a lot of meetings between filmmakers, exhibitors and distributors, and a lot of lessons have been learnt. Some of these lessons were put to good use in 2014 and the results are quite visible. For the first time in history, Nigerian films grossed over N400m at the cinemas alone – and that’s without adding figures from DVD and other marketing sales. And, this is just the tip of the iceberg. The more understanding the key players in the film industry have of this system, the better it will get for everyone.
What steps are being taken presently to ensure that Yoruba Nollywood and Kannywood filmmakers also join and benefit from this new framework?
Well, the people that made over N400m last year are Nigerian filmmakers; some of them were from the Yoruba genre. It’s not restricted to just one segment or genre of the industry so to speak. Very soon, we’ll be releasing a Hausa Nollywood film, and we’ve also released Alakada which of course is a Yoruba film. So generally, any filmmaker in these genres who claim not to know about this framework or are skeptical about it cannot disprove the fact that things are happening. There have been a lot of well publicised film festivals in the country where educational sessions have been put together for them to learn, but unfortunately most of them don’t attend. Those who have attended are reaping the rewards presently, and I want to strongly emphasis this part. A lot of festivals spend so much money to advertise in a bid to get stakeholders to attend and learn. Even the Pan African University hosts a monthly seminar where they bring successful people in the industry to come and share their wealth of experience and blueprint, but unfortunately people don’t attend. These things are real and they’re happening all around us but you need to make an effort to get the needed education in order to benefit fully.
I mean; we didn’t stay in our houses and expect all these cinemas we’re building today to just show up. I remember how people laughed us off when we told them a few years ago that there’ll be 50 cinemas across Nigeria in 5 years time, but right now we’re already on 25 cinemas and fast growing. By the end of 2016, there’ll be 50 easily. For lack of knowledge my people perish; that’s what the Bible says. Filmmakers should take the pains to investigate about this new system, apply whatever they learn to their careers and progress. AY has done this, and we can all see the results; N160m and still counting. The filmmakers in Kano are actually also positioning themselves to take full advantage of the cinemas presently, and they’re not just planning to release their films in Kano alone but all across the country. Filmmakers here in Lagos may sit back and keep watching while people in seemingly remote places are taking full advantage of this system. We on our part still spend our time and make the efforts to be part of festivals across the country where we can reach out and educate all filmmakers about this wonderful new system, and we will continue to do so.
Pirated DVDs of AY’s 30 Days in Atlanta are being sold across Lagos presently. How do you intend to help filmmakers protect their content from your own end as cinema owners?
The general way people pirate films at the cinemas is to come in with a camera. We have team members in our cinemas with infra-red Google glasses that stay at the bottom, look into the crowd, and identify abnormal heat radiations. This lets us distinguish between phones and cameras. If we do find anybody with a camera, we get them arrested immediately. But what you find is that most of the films that are pirated are not from the cinemas. In some cases, especially for Nigerian films, when we release them, they’re watermarked specifically for each cinema chain. That way, if it gets pirated, you can begin to trace where it happened. This is one of the things we’ve put in place to try and mitigate that. We also use DCP encryption; if you give us your film on a hard-drive and we encrypt it, no other cinema or media player will be able to access it. The drive will only work on the projector of the cinema it was encrypted for, which makes it useless to any other person – pirate or not. We’ve put this in place at our cost to try and mitigate piracy. A lot however still needs to be done by the Nigerian Copyrights Commission, Nigerian Film and Video Censors Board, and the industry in general to fight this menace because I think the pirates are known. It’s the muscle to fight them that is in question. It’s really unfortunate that 30 Days in Atlanta has been pirated. It breaks our heart deeply, and we want to strongly disabuse any notion that the piracy might have emanated from the viewing at cinemas because we have a proven track record of security as far as modern cinema is concerned in Nigeria.
You opened your first two cinema outlets in Surulere, Lagos, and in Marina, Calabar in December 2012. Was it your plan from the start to have, in such a short time, virtually completely overshadowed big players like the Silverbird and Genesis Deluxe cinema groups?
Well, our plan was not to eclipse or overshadow them. We just recognised a big need for cinema entertainment in Nigeria, and we know that cinema is a volume game – the more cinemas you have, the more you can meet this demand from both the viewers and movie producers’ angle. So, our plan was to roll out like 25 cinemas immediately and if in the process we eclipse anybody, then so be it (laughs). Our plan was really just to open 25 cinemas in 6 years; I think we’ll do it in just four-and-a-half years. We weren’t aiming to be the biggest cinema player but just to meet a demand. It’s good to know that we’re practically the biggest cinema chain in Nigeria presently. If our competitors decide to move at our pace, then perhaps they can put up some sort of challenge. Our aim though is not to challenge anybody, but to just go for it and get it done. And today, from the feedback we get from our customers, we’re glad because we can see that we’re meeting that demand and we’re on the right track.
You reportedly once said that leaving Genesis Deluxe Cinema was due to the ‘Nigerian factor’ for you. Could you shed more light on this please?
I came back to Nigeria, partnered with a friend of mine who is a businessman here and we set up Genesis Deluxe. Some of my colleagues also came back to Nigeria with me. But, just one year down the line, there were misunderstandings on how the business should run and we decided to part ways. So, it was strictly a business decision. They’re still operational today, but we decided to chart a different course.
Are you still a shareholder there presently?
No, not at all. I am not.
What would you say is the motivating factor in starting what is widely known to be the fastest growing cinema chain in Nigeria and Africa presently?
We love this business and it’s the only thing we’ve ever done. For me, outside youth service, cinema business is the only thing I’ve ever done in my life. So, we’re not apologetic to say that we know how this business works and how to do this business. We’ve done this for a very long time overseas, so seeing such a demand for it back home was an inspiration. We also noticed that cinemas weren’t opening up as quickly as we expected before we came back to Nigeria. Between 2004, when modern cinemas came in, to 2008, there were only about four cinemas. From 2008 to 2012, and indeed to 2014, the growth has been exponential and the increase has been remarkable. Added to what we already have, by the end of this 2015, we’ll be having another ten outlets opening across the country. By 2016, there should be another ten. We saw this from way back and couldn’t understand why people weren’t doing this quickly enough. So we decided to come back and as we were meeting this demand for people, the excitement and need for more was in our face. Of course, people are building more malls, so we decided to keep expanding because it’s really a volume game. The more outlets there are, the better it gets even for the cinema owners. We say we want to open 25 outlets in six years, but really we’re gunning for one hundred.
Must it always be at a shopping mall? Isn’t it possible for a cinema to stand alone?
Oh it is; the cinema in Marina, Calabar is a stand-alone outlet though it’s built on a resort. Yes, a cinema outlet can stand alone, but you have to look at what the market feasibility report says for that area. A mall brings different footprints as a result of all the various businesses and things on offer besides the cinema, so it works. A mall usually presents a location where people can go and spend time, and while spending time there they can always use the cinema. This is why the malls have this joint attraction. If it’s a stand-alone cinema outlet, people just go and watch a film and leave. But, you want them to maybe grab something to eat and drink afterwards, so you introduce a restaurant.
You might also want the kids to have some fun while you eat, so you introduce the games arcade. And then, you’ll also want to do some shopping, so you introduce the shopping centers and it becomes a mall (laughs).
What are the latest technologies you’ve introduced at your new outlets, especially the Apapa and Kano outlets?
We’re proud because the outlets we just opened in Apapa, Port Harcourt and Kano are our 2015 models. We also look at how we serve people; the service to guests is very essential. In traditional cinemas, you queue at the box office to buy your movie ticket, and then move over to another queue to buy your popcorn and drinks. All that doesn’t exist in our cinemas anymore in this 2015 model; you buy your ticket, popcorn and drinks all on one queue. This is what we call our ‘Combo Tails’. We’re trying to make the cinema experience as pleasant for our guests as possible. The art décor for the cinemas too are pretty good, because we want people to go in there and enjoy themselves. Someone said to us in Kano that our cinema is a place where he can come in and ‘leave his wahala’ at the door. This is exactly what we hope to achieve with the present state of things in Nigeria. Plus, for every cinema we’re opening now, two out of the screens are 3D. And, we also make sure that one of the screens is a very huge 3D screen; I think we have the biggest screens in Nigeria presently, between Apapa, Port Harcourt and Kano. We love to put smiles on people’s faces, and this is what we’ve set out to achieve.
What was the motive behind making Ali Nuhu the ambassador of the Kano cinema outlet?
Well, he has been a friend of Filmhouse for a very long time, and he’s a huge star up North. Walking with him at the mall sometimes is like walking with a god over there. He’s a phenomenal star, and he’s so unbelievably humble too. He’s a true friend of the house who wishes us well always, and he would do anything to make us succeed in Kano. We’re planning a few projects with him personally at the moment. He was just the natural person to be our brand ambassador in Kano.
So, are you planning to have ambassadors here in the South as well?
Oh yes, we are. In a way – although he doesn’t carry the tag officially, Ramsey Nouah is a big friend of the house as well. If you look at our ‘N100-everything’, you’ll see Ramsey on it. He’s a very close friend of the house and we do stuffs together as well. So yes, we are going to have here in the South too. When we open up a cinema in any location, we want the place to be like a local home for people in that environment. If there’s a local star or celebrity that connects with that area, we want that connection, because we’re building these cinemas for the people and not for ourselves. We’ve seen the happy reactions of people when they see Ramsey Nouah or Ali Nuhu up North, and it aligns with our vision, which is to make people happy.
According to reports, a lot of filmmakers are complaining that the percentage you take from them is outrageous. Can you justify your percentage as cinema owners?
It’s interesting how Nigerian filmmakers say that; how come their counterparts overseas don’t? This is why we’ve been talking about education. You see, all Nigerian cinemas give the best percentages to Nigerian films and filmmakers than their international counterparts. When these same Nigerian filmmakers go and release their films in international cinemas, they only get about 25% to 30% net percentage. In Nigeria they get a net percentage of 50%. So, when people say that, I like to take them on and educate them on how these things work anywhere in the world. Nigerian films get the best deals in Nigerian cinemas – Filmhouse, Silverbird, Genesis, Ozone, and others. We all agreed to give them a good deal. But I must say, now that Nigerian films are becoming the best films at the box office, we’re going to change this to reflect international standards (laughs). The thing again to look at here is; it costs a fortune to build these cinemas. The resultant net earnings that we make from these films struggle to pay back our loans. Cinemas work doubly hard to pay back their cost of investment. So, what we’re actually giving to Nigerian filmmakers is at our own loss. We’re doing a pretty good deal for them as it stands and it’s clear. No film in Hollywood gets the kind of percentages Nigerian films get from our cinemas here. I’m happy to answer this question at any point in time.
The problem too is that there are very few cinemas in Nigeria, so when they get those deals it doesn’t amount to much – except you’re AY (laughs). But, if Nigeria had 100 cinemas, they won’t be complaining. If the 50%, for instance, comes to just N1m and there are only ten cinemas, that means the filmmaker makes only N10m. If it were 100 cinemas, that same producer gets N100m. but, mind you, what the cinemas get from that film is barely enough to pay back its debt. The smart ones among the filmmakers in Nigeria are actually thanking the cinema owners. The more cinemas there are the better for all of us. So, I really think everyone should come together and encourage owners of cinema chains to build more cinemas, because the moment we have hundreds of cinemas, filmmakers will not make this complaint anymore.
Is it true that most of the funding for your current expansion came from the Nollywood intervention fund?
Oh yes, it’s very true. It’s an amazing thing that’s happened to the film industry. I join the multitude of people that say that this industry has never before enjoyed such an enabling environment. Yes, the $200m loan, via Bank of Industry (BOI) and Nigerian Export and Import Bank (NEXIM), is an amazing thing that actually empowered us to go ahead with this project. The managements of BOI and NEXIM banks are fantastic. They absolutely wanted to support the industry and they did. They set us on the path, and since then, we’ve had commercial banks like FCMB and private equity companies now investing in the company.
That $200m fund is actually designed to be a stimulation fund to stimulate other investors like private equity companies and commercial banks to invest in the industry. So, I’m absolutely ever grateful to that fund, and to the federal government, BOI and NEXIM Bank for doing that because now commercial banks and other investors have stepped in. FCMB has been a huge supporter of this industry, as well as private equity firms like African Capital Alliance. I am indeed proud to say that that fund was the beginning of the 25 cinemas in 6 years vision.
You recently said that this new distribution system makes it easy to track the success and sales of a film at the cinemas. How does this system really intend to help in the war against piracy?
A lot of the technology put in place is helping it will be difficult to eradicate piracy though, because a lot of bad people are involved who just want to eat off other people’s sweat. The fight now is how to curb it and reduce it to the barest minimum. A lot of technology has been put in place, but remember that human beings made these technologies and so it can be bought. When people watch films at the cinemas they don’t know that the films are watermarked, but when you record it the watermark will show and the picture will be distorted. Pirates have advanced beyond recording films in the cinemas though.
The tracking I spoke about was actually more in reference to figures, because part of the feedback we got was that, a lot of times filmmakers want to get financing from banks and investors but these institutions demand for historical figures and data. The filmmakers find these hard to supply because the distributors were not releasing the information on how well the films were doing as it’s done overseas. This is gradually changing though, as every distributor now has a database of how well each film has done or is doing. Yes, we have a clause in our agreement that prevents cinemas from releasing details or figures on screen, but the total we should give out. The National Films and Video Censors Board should be the ones collating this data for Nigerian films and make it available for anyone who needs them. A lot of sensitization is going on presently, so it should be a thing of the past soon that people don’t have access to such information. But from the pirates’ point of view, everybody is doing their bit. The consumers however are not helping. I think a lot of times we only talk about the actual pirates; yes, they should be jailed, but how about the consumers who go out to buy a pirated film knowing full well that the maker of that film is not going to make money? Nobody is addressing the consumers. We don’t think about the producers when we buy pirated films. Someone is selling pirated works in traffic in Lagos and people are paying money to buy it; shame on all who this! We’re very quick to blame the government and everybody else but ourselves. The moment we as end-users choose not to buy pirated works, pirates will go out of business. I think we all need to take responsibility for this. A lot of Nigerians are actually proud to even announce on social media that they’ve bought and seen a film even before it’s released; shame on such people. You’re denying the filmmakers their right to feed. Everybody needs to work together to curb this. On our part, we’re trying our bit. Our cinemas are the most affordable in Nigeria so that a lot more people can afford the cinemas. In fact, everything at Filmhouse Cinemas between 10am to 12noon is just N100. We specifically show some selected Nollywood films so that everyone may come, that may not be able to afford the standard fees, and also partake of the cinema experience. But when you do deals like this and still see people buying pirated works, it’s really heartbreaking. Please go to the cinemas or buy original DVDs so that everyone will be happy, and the producers can make more films.
