Africa’s creative industries could be a great success story but they are held back by weak copyright protection.
While the wealthiest Western creators often shout loudest, it is the poorest African entrepreneurs who suffer most.
In some important ways, copyright piracy makes it more expensive to make a typical African film than a Hollywood blockbuster.
Piracy makes it harder for film-makers and musicians in developing countries to recover their costs than for their counterparts in Hollywood or Nashville.
Where piracy is high (up to 90 per cent in much of West Africa), a musician or movie producer has precious little time to recover the original investment before the rip-offs move in and make it impossible to compete.
No African country has piracy levels below about 25 per cent of the market.
For example, the typical Nollywood film budget is around $25,000.
The most expensive Nigerian production ever, Close Enemies, was $300,000 but this was produced in Los Angeles and distributed globally.
Legitimate sales for a typical local production are estimated to be around 30,000, with every copy pressed costing an additional 25 cents.
The average Nollywood film, which enjoys far less success than Close Enemies, thus costs $1.08 per movie sold on DVD.
At the other end of the global film industry, the 2007 Hollywood blockbuster “Transformers” had a $150 million budget.
But thanks to high sales its average disc costs were less than the typical Nollywood production: only 79 cents.
It’s a hard world when your low-budget production cannot even compete on cost with the Hollywood blockbuster.
But could Nollywood really do any better, with a smaller audience with lower average incomes? Sure it could.
Hollywood’s golden age began in 1930, when the US population was only 130 million, average incomes were much lower and the USA suffered from the worst economic recession ever.
But even then the average Hollywood movie budget was $350,000 ($4.8 million in 2009 dollars).
By contrast, Nigeria has 140 million people but the entire budget for all 1,600 Nollywood movies made in 2006 was $60 million — less than the average $100 million for a modern Hollywood movie.
Many things contribute to the differences but the biggest burden is piracy.
Piracy prevents turning one of Africa’s greatest resources — its creativity — into a successful business.
Without protection for their works and the chance to make a living, Africa’s artists, producers, sound, stage and equipment managers are often stuck in the informal sector, struggling to recuperate even small investments.
By contrast, if creative artists and their productions are adequately protected by copyright, they can contribute hugely to local employment and growth.
Global trade in audiovisual works grew 50 per cent faster than other trade over the last 25 years.
Creative industries now account for 11 per cent of US GDP and are the fastest-growing source of jobs in Europe.
The lack of copyright protection not only undermines growth but also damages culture.
Pirates sell both domestic and foreign movies and music.
Foreign producers can recover their investments in markets where their property is protected but local creators have no such luxury, and thus face a double penalty from piracy.
They have to lower their production costs to compete with pirates but their works are competing with copies of bigger-budget foreign works which are sold by pirates just as cheaply.
So foreign works sell better.
For example, even with a strong local creative sector and good copyright laws, 56 per cent of the music sold in South Africa is foreign.
But this does not mean that local music-lovers prefer foreign works.
The fact that a market for African music exists at all in such adversity illustrates there is still powerful demand.
Local culture is the big loser.
Local fans are deprived of the work of local artists who can’t compete with the output of the pirates.
In the end, piracy causes far more harm than just lost sales.
It is a lost opportunity: it steals the chance to make good quality, local work and to participate in one of the fastest-growing sectors of the global economy.
Creative artists and all those involved in production must press government for greater enforcement efforts against pirates but they must also band together to defend and increase the legal framework for copyright, their right to their own work.
Gelder is a Project Director at International Policy Network. Schultz is Professor of Law at Southern Illinois University.