2. “In the world of banking, dealing with the
creative industry SMEs are like dealing with
the rats and mice of the business world ”
3. Global
7% of the
World’s GDP
In the UK
7% of GDP
Worth £60 million
per annum
employs 2 million
people
In Europe
2.6% of GDP
Worth €650 billion
per annum
Employs 6 million
In Nigeria
1.42% of GDP
N 522 Billion
Employs 300, 000
people
In the US
4.32% of GDP
Worth $698 Billion
per annum
Employs 4.7 Million
people
4. What Funding Options are open to the
Creative Industry SMEs in Nigeria?
Equity
Usually owner cedes some
measure of ownership to
investor(s)
Guarantees
Usually involves the
government
Others
Business Angels
Peer to Peer Finance
Public Grants
Tax Credits and Incentives
Debt Based Finance
Owner retains total
ownership of the
business
5. The Creative Value Chain
CREATION PUBLICATION DISTRIBUTION RETAIL
Supply Side
Reduce Fixed
Cost by attracting
foreign
investment
N
e
e
d
s
Needs strong IP
enforcement
Uncertain Demand
Digital Content
Creation
Supply Side
Advance Funding for
Property Rights
Reform of
institutions and
Regulatory
frameworks
Demand Side
Digital Distribution
Is relatively cheap to
create and penetrate
Effective collecting
societies
Digital Platform
reduces distribution
cost as it runs on
Limited Budget
Media and
New Media present
better opportunities
Demand Side
Role of Alliance
Partners
Retailer’s
Percentage
Effective distri-
bution platform
both in virtual
and real
markets
Audience
Development
Editor's Notes
Presented at the Lighthouse Prestige Club
by TM Adeola Osifeko
3rd of October 2015
Happy Independence Day Nigeria
This is based on political, economic, social and technological factors which relate to the dearth of institutional structure, fragmented and ineffective distribution frame works, protection and enforcement of Intellectual Property rights, dependence on oil revenue, the fact that it requires project based funding dictated by consumer trends in demand, absence of a collateral asset registry, limited management skills and understanding of the industry, unskilled workforce, limited internet and technological skills to mention a few.
The above diagram depicts the estimated value of the creative industry around the world specifically in the United Kingdom, United States, Europe & Nigeria.
Various segments of the creative industry in Nigeria includes publishing, music, fashion, sports marketing, software development, social media, games, performing art and the fine art, hence opportunities abound within the sector considering the advent of new media and improved technological tools.
Why Should Investors Invest in your Creative Business?
Creative industries have facilitated cultural, social and economic development in most developed economies.
It also provides a veritable option in the process of diversifying the economy since it indicates strong GDP growth
Nigerian music film and performing art sectors are gaining traction all over Africa and overseas enabling potential global partnerships
Advantages of Equity Based Funding
Investment could take the form of Venture Capital or mezzanine
It’s more flexible although ownership is ceded to investor it guarantees pooling complementary skills
Advantages of Debt Based Finance
It provides extra capital at instances were there’s a need to supply products or services
It’s less costly compared to equity
Usually benefits the owner were there’s collateral to guarantee the debt
Advantages of Guarantees
It limits the losses of lenders to a percentage
It requires the government to take upfront risk thereby making lenders more confident
REFERENCES:
How to Finance Your Creative Business by Akintunde Oyebode
wipo.org; World Intellectual Property Organization
UK Department of Culture Media and Sports
mpaa.org; Motion Picture Association of America
nigeriaeconomicsummit.org
