CEO, FilmOne Distribution, Kene Mkparu, left the UK to set up a cinema chain in Nigeria, creating a model for others. Interview by Funke Osae-Brown
How did you end up in the cinema business?
I started with a part-time job at Odion Cinemas in the UK as a postgraduate student. Odion is the biggest cinema chain in Europe. I loved the job so much that I went into the management training programme and became a supervisor, trainee assistant manager and assistant manager. When I applied for the position of general manager, there was no black general manager in the company at the time. My application succeeded and I became the first ever black general manger. I worked for Odion Cinema for like 17 years in the span of which time modern cinemas started developing in Nigeria. By then, there were quite a number of black managers at management level in Odion, so we thought we could do this in Nigeria. Cinemas had started coming up in Nigeria and we had the expertise. So, late 2008 I came back in partnership with a friend of mine and we started with Genesis Deluxe Cinema in Lagos and Port Harcourt but it didn’t quite work out for me so my team and I left and started Filmhouse. We opened the first two Filmhouse Cinemas in December 2012 in Surulere and Calabar. We now have cinemas in different places in Nigeria. The idea was to build 25 Filmhouse Cinemas in six years from that time.
How far have you gone with that plan?
Right now, we have 10 operational sites and we have become the biggest cinema chain in West Africa in terms of size and market share. We are the third biggest in Africa behind the two cinema chains in South Africa. The economy has been tough in the last 15 months, so the fast pace that we began with has slowed down a little bit. But we are picking up again because the economy is showing positive signs. We hope to open two or three cinemas before the end of this year, open another five next year and then we would get back to our plans to open 25 cinemas.
What was the attraction for your choice of the cinema business?
I love the show and the business. Cinema is the safest entertainment family event in Nigeria today. I love seeing families, different kinds of people enjoying different kinds of movies. I love the technology behind the cinema as well, knowing what the technology can do. It is not all just plug and play but one big computer system. I love the fun part of it. At movie premieres, you get to meet a lot of stars and get your own 15 minutes of fame and take selfies with movie stars. It’s all fun. The business side of it is very intense but then when the show side of it comes up like the movie premiere for instance, it kind of balances things out. You get to have the chance to wear your best dresses and your best suits and then you go back to business the next morning.
What does it take to start a cinema business in Lagos?
The first is lots of money. Part of the problem is that 80 to 85 per cent of what it takes to set up a cinema is foreign exchange dependent and that is huge. In the last 15 months, the cost of building one cinema has tripled. So, if you must fund it with naira, you must find times three the naira. That has created a huge challenge for a lot of cinemas. Funding is a huge challenge but the likes of Bank of Industry (BOI) and Nigerian Export-Import Bank (NEXIM) have come to support the industry by providing low-interest loans. Even commercial banks have supported what we are doing with funding. The banks have bent their ways a little bit to understand the creative industry and are able to make funds available for us. The funding is there but the current challenge is that it costs three times what it used to be before because of the exchange rate. When the exchange rate comes down, then people will go into the business a bit more.
Second, you will need the skills. To be a branch manager in a standard cinema internationally you probably need like five years minimum experience as an assistant manager but we don’t have that luxury here in Nigeria. If you open a cinema, where are you going to get somebody with five years’ experience except you poach from another cinema? It was a huge challenge and that’s why we developed a training school internally to pre-nurture and train managers. We are getting to that point where people are getting adequate experience for them to become managers.
Also, if you are opening a cinema who is going to be the projectionist? If you are going to open a cinema in a small city somewhere outside Lagos, Abuja and Port Harcourt and you can’t get your projectionist to move to those small cities, you will have to train people from those small cities.
The challenges are there but it is also exciting. Filmhouse has succeeded because we find ways to get around those obstacles and do things better. Nigeria is a developing country in terms of cinema business and we recognise that. We choose to stick it out and make it work, and it is working. Cinemas in Nigeria today compares favourably with others even in more developed parts of the world. If you look at the market size, the box office size of the cinema is huge. Last year alone, Nigeria generated about 3.5 billion naira in 29 cinemas alone. Imagine if we have enough cinemas to go round 180 million people.
What opportunities are there for other investors?
There are plenty opportunities. Lagos has about 20 million people and there are 10 cinemas. If everybody goes to the cinema, there won’t be enough space for all of them. The opportunity is huge but people need to understand that Nigeria does not want one size fits all and that’s a mistake we make all the time. We create a product that sells in one place and replicate it somewhere else and it just doesn’t work. If we understand the behaviour of different demographics, the investors will be happier with their investments in the cinema business. We have three different types of cinemas: the high-end cinema, the regular cinema and the low-end cinema. With that knowledge, we can target a wide population of the country.
What are your expansion plans for Lagos?
Lagos is quite competitive now but most certainly we want to serve every part of the city. We want to serve the Mainland even though there are very big cinemas there. We are also looking at the Island. We are looking at different types of cinemas for different types of people in Lagos. We are not just going to replicate the same thing everywhere. We are looking at operations tailored to the market. In the next 18 months or two years, we are going to have a minimum of four extra cinemas in Lagos.
Have you found a way around the vexatious issue of sharing formula between cinema owners and film producers?
Film producers need to go learn business. A producer is a business manager. If they don’t understand business, they don’t have business producing because no matter what it is, they will always complain. They should go and put their films in cinemas outside Nigeria and tell me what they will get back. Nollywood films get the best deal from us. Producers should just go and learn how it works. Nigerian producers are getting far more money from exhibiting their films in cinemas in Nigeria than people get abroad.
What will be your advice to a prospective investor in the cinema business?
I will say it’s a lucrative business and we have only just scratched the surface. It’s a business where you invest for the long term because the habit is still growing particularly outside the big cities. People’s behaviour – particularly going out in the evening and at night – is still changing. There is gold, diamond all those things within the Nigerian film and cinema industry. If you are patient enough, you will reap the benefit.
- Culled from Cinema in Lagos, a publication by Mighty Media Plus Network Limited for the Lagos State Ministry of Information and Strategy