Nollywood: Understanding the economics of box office revenue — by Bennett Nwankwo

Nigerian media houses should stop pitching filmmakers against each other and creating unnecessary disharmony and disunity in our industry.

This issue was never about rivalry or competition.

Kunle Afolayan did not shade anyone in the statement.

There was no attack on any filmmaker and no comparison with anyone’s success.

Atleast to the best of my knowledge.

What Kunle Afolayan discussed was purely the business structure of cinema revenue in Nigeria.

The conversation was about how money is shared, not who is better.

In Nigerian cinemas, the box office figure announced to the public is not what the filmmaker receives.

You see those ₦1b to ₦2b figures? It does not entirely goes to the filmmaker.

When a cinema ticket is sold, the first deductions are government taxes.

About 10% of every ticket goes to tax, which includes VAT and entertainment tax.

Let us use ₦500 as a simple example for one cinema ticket.

Out of that ₦500 ticket, ₦50 goes straight to tax.

This means only ₦450 remains after tax.

That ₦450 is what is called the net box office revenue.

This ₦450 is then shared between the cinema and the distributor.

In the first week of release, the sharing is usually 50% to the cinema and 50% to the distributor.

So from the ₦450, the cinema takes ₦225.

The distributor also takes ₦225.

At this point, the filmmaker has still not been paid anything.

The distributor’s ₦225 is not the filmmaker’s final money.

From that ₦225, the distributor removes their fee.

Distribution fees are commonly around 10 to 15%

If we use 10% for simplicity, that is ₦22.50 taken by the distributor.

After this deduction, about ₦202.50 remains.

Withholding tax is then deducted from this amount.

After withholding tax, what finally reaches the filmmaker may be around ₦180 to ₦190.

So from the original ₦500 ticket, the filmmaker may receive less than ₦200.

This is in the first week, which is the best sharing period for the film.

In the second week, the distributor’s share usually drops to about 45%.

In the third week and beyond, it can drop to about 40%.

This means the filmmaker earns even less per ticket as time goes on.

This is why a film can sell many tickets and still struggle financially.

You see, gross box office figures can be misleading.

This is why Kunle Afolayan said he preferred a smaller amount he can actually collect.

“I do not want one billion naira in cinemas” is an economic statement.

It is not an insult to cinema success.

It is not a dismissal of box office achievements.

It is a reflection of how diluted cinema revenue becomes after sharing.

Kunle Afolayan made it clear that there was no rivalry with Ibrahim Chatta.

He addressed the issue as a professional discussing industry structure.

Unfortunately, some media houses chose sensational headlines over facts.

They turned a financial discussion into imagined conflict.

This kind of reporting damages trust and unity in the industry.

Explaining numbers is not throwing shade.

Nollywood needs honest conversations about money, sustainability, and fairness.

The media should help people understand these systems, not distort them.