Film director Philip Karanja says he is slowly coming to terms with the end of a practice he once proudly championed.
The co-founder of Phil-It Productions, which he runs with scriptwriter and actor Abel Mutua, has admitted that the company may no longer be able to pay residuals and royalties to actors in future projects.
For a long time, Phil-It stood out in Kenya’s film industry. In an industry where conversations about actors’ welfare often end as soon as the film does, the production company tried to show its peers that standard best practices could work locally, too.
Filmmaker and entertainer Abel Mutua.
Photo credit: Nation
Both Karanja and Mutua started out in front of the camera before moving behind it. They knew firsthand what it felt like to pour their heart and talent into a production, only to receive a one-off cheque while the show continued to generate revenue elsewhere. So when they established Phil-It, they aimed to rewrite that narrative.
Macharia Nyokabi, one of the most vocal advocates for royalties in Kenya, has publicly acknowledged benefiting from Phil-It’s model. For years, she has criticised local production companies for failing to pay actors' residuals, despite continuing to earn money from reruns, syndication deals and content sales.
“I’ve been very vocal and consistent about this. Ideally, as an actor, you should be able to receive royalties. That’s how it works in the American and European systems. Here, you’re either put on a monthly salary or, if it’s not a long-running show, you get a one-off package, and that’s it,” she said in a past interview.
Nyokabi Macharia had her first international performance at Omnibus Theatre in London in October 2017. PHOTO| COURTESY
Nyokabi also recounted her surprise when she was contracted by Phil-It for a feature film in 2021.“I have personally benefited from royalties here in Kenya. I’ve received royalties from Phil-It Productions. The system they built by cutting out middlemen is proof that it’s workable. When we did A Grand Little Lie, the movie, they paid us an honorarium because they were financially constrained at the time. But the following year, I was shocked when I received a royalty cheque. The year after that, another cheque came,” she stated.
But Karanja now says the economics of filmmaking have shifted, revenues are shrinking by the day, making that model increasingly difficult to sustain.
“Payment of residuals is now a global situation, and that model, unfortunately, is going to be very difficult to maintain going forward. Hollywood actors are no longer earning residuals the way they used to because the model has changed.” Karanja told Showbuzz .
Abel Mutua, famously known as Mkurugenzi, is a master storyteller who not only captivates audiences with his narratives.
Photo credit: Pool
According to Karanja, in the past, the old model was built on layers of monetisation. A film would premiere in cinemas, then move to DVD and Blu-ray sales. After that, it could be licensed to cable television, then to free-to-air stations, and later sold into other territories. Each window created a new revenue stream. Each revenue stream meant potential residuals for years, sometimes even decades.
“From one sale, it could earn you residuals for 10 to 20 years. There were several ways to monetise one product,” he says.
“Right now, you sell a movie to a streamer like Netflix, and it’s available worldwide, and that is it. You can’t possibly sell it again for a rerun. So with that, what actors now get is the one-off fee. That is where we are right now.”
Streaming, he notes, has not only transformed distribution but also unsettled long-standing compensation structures. He points to it as one of the reasons actors in Hollywood downed their tools in recent years, demanding a rethink of how revenue from digital platforms is shared.
“Streaming is what pushed actors in Hollywood to strike because it greatly affected the old ways of monetisation. Right now, more people are watching YouTube than any other streaming platform, and what makes it even harder is that YouTube is free. So logically, a residual model is not sustainable.”
And because of that reality, he doesn't see Phil-It keeping up with the old ways.
“As Phil-It, we have paid residuals in the past. Having started as actors ourselves, we would love to keep paying residuals. But we also have to rethink the business model. I don’t think the old model is attainable anymore.”
