This note was written as part of the World Bank's effort to support Tanzania in addressing the challenge of productive

job creation.

Swahiliwood - Tanzanias movie industry as a growing niche

The Tanzanian film industry is a nascent and largely informal industry, but one that is fast growing and gaining popularity within the Tanzanian population. Until about six years ago, the industry was dominated by the distribution of pirated films from Hollywood, Bollywood, and Nollywood, but has since moved towards domestic production of movies in the Kiswahili language. Currently, there are about 10 new low-budget movies produced per week in Tanzania, and about 4-6 that are released into the market, which also includes Swahili speaking countries within the East African Community. Production: There are about 50 independent producers in Tanzania of which 70% are based in Dar-es-Salaam. Most production companies consist of one producer, while other crew members are hired on a freelance basis. Often, producers play multiple roles (acting, directing, editing,etc) to reduce costs. A typical production house can produce a finished low budget/low quality film in a short period of time, often even less than one week. The cost of production for a budget film is also low, typically costing less than USD 5,000. Distribution: While there are about 24 small distributors in the market, there is one main leading distributor, Steps Entertainment, which has a quasi-monopoly on distribution networks around the country, and its own chain of wholesale outlets. Distributors play multiple roles along the value chain of movie production and distribution. They often invest in films prior to production, and are responsible for PR, advertising and duplication costs and services. However, distribution companies typically purchase the film and all film rights in a lump sum payment instead of a royalty arrangement. This means that the producer does not see benefits from the number of DVDs sold or, at the opposite, bears the loss. Films are bought from producers at rates ranging from USD 800 11,500, and these films are marketed via SMS, poster advertising, and wholesale distribution networks across the country. There is currently little competition in distribution, partly because fixed costs are relatively high. Margins do not appear too high, as DVDs are typically sold between USD 1-2. However, perhaps as the result of success, there are initiatives underway to promote greater competition and introduce a royalty-based system with another smaller, but fast growing distributor called Proin Promotions Ltd. Target audience: There about 10,000 video exhibition halls (Bandas) and approximately 25,000 video rental libraries across the country that mainly target lower income segments of the population. The cost to rent a movie from an outlet is approximately TZS 500 (USD 0.31) while the cost to watch a movie in a Banda is TZS 100-200 (USD 0.06 - 0.13). With an average

of approximately 62 customers per day, a Banda makes revenues of approximately TZS 12,000 per day (USD 7.50). Potential for growth and capacity building: Currently, low margins and low quality characterize the Tanzanian film industry, however there is potential for greater organization, growth, and better quality production as audiences demand better firms, and as Tanzanian films expand into regional markets. Within this fast growing but niche industry, there are some potential opportunities for building industry infrastructure, and creating jobs along the value chain. Potential demand appears high since 76 percent of outlet owners that were interviewed cited three-fold growth of their outlets in the last 3 years. The industry suffers, however, from several bottlenecks ranging from low technical capacity, and relatively high marketing and distribution costs. These bottlenecks can be addressed by the following measures: 1. Capacity building efforts are critical for growth within the film industry. Currently, there is a clear demand and a varied audience for Tanzanian-produced film and media1; however technical capacity, funding, equipment and film education is missing. Through education, technical training, and support of the industry by the government / donors, these skills can be nurtured to promote the growth of Tanzanian talent in acting and production. Media for Development International is an example of an NGO that is currently working to incubate such talent through the use of donor funds to produce socially conscious programming, while nurturing local acting and technical production skills to produce high quality Tanzanian films. End last month, MFDI showcased 3 films which are products of Swahiliwood project, a project whose aim is to develop the quality of films by nurturing the local filmmakers while also increasing the employment potential and revenue streams.. 2. There is also space to introduce competition at the intermediary levels of distribution, as currently, distributors play multiple roles along the value chain. This could be fulfilled by the entry of specialized private marketing firms, transporters, and the growth of private outlets, which would encourage greater competition and growth within the industry. 3. Technology changes from DVD format to other platforms may also spur growth, as these changes can lower costs and diversify distribution channels, as well as reach more customers. Currently, the DVDs are distributed by extensive intermediary networks that include costs of transportation (bus/train networks) and time. However, with the growth of the internet as well as mobile payment platforms, it is possible to foresee a reduction in time as well as costs of distribution with more instantaneous delivery of films to sales outlets and end customers. 4. Partnerships with other forms of media (i.e., mobile phone companies) might also serve to help dissemination and lower distribution costs as media companies can use their own networks for advertising purposes. This would introduce more competition in the distribution market, foster growth of synergistic partnerships in the private sector, as well as provide more choice for producers looking to promote their films.

5. The creation and support of producer associations is important for producers to help overcome barriers involved in the process of commercialization of their films. Small business associations have shown to be effective in facilitating regulatory changes and creating standards, however, it is critical for producers to be able to work together to advance shared agendas such as the introduction of a royalty-based system to retain intellectual property rights as well as financially benefit from the popularity of their films. In addition, such associations would facilitate the sharing of market information, creating shared industry norms, as well as informing on technical production techniques. The government also has an important role to play in terms of introducing standards, greater structure, and law and regulation to inform industry practices. They can also assist with facilitating the flow of information within the industry, and encouraging the process of formalization for greater transparency and competition within the film industry.

1 Interviews on audience demographic and preferences on film conducted by MFDI.Sources: (1) Kamin, Louise, Swahiliwood: A Platform for Enter-Educate Feature Films, MFDI, September 2011 (2) Interviews with MFDI Director (John Riber) and creative team (Jacob Stephen, Richard Jorams, Ernest Omalla, Babra Kalugira, David Mwaipopo).