Film as a medium first arrived to Nigeria in the late 19th century, in the form of peephole viewing of motion picture devices.
These were soon replaced in early 20th century with improved motion picture exhibition devices, with the first set of films screened at the Glover Memorial Hall in Lagos from 12 to 22 August 1903.
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The earliest feature film made in Nigeria is the 1926's Palaver produced by Geoffrey Barkas; the film was also the first film ever to feature Nigerian actors in a speaking role.
As at 1954, mobile cinema vans played to at least 3.5 million people in Nigeria, and films being produced by the Nigerian Film Unit were screened for free at the 44 available cinemas. The first film entirely copyrighted to the Nigerian Film unit is Fincho (1957) by Sam Zebba; which is also the first Nigerian film to be shot in colour.
After Nigeria's independence in 1960, the cinema business rapidly expanded, with new cinema houses being established.
As a result, Nigerian content in theatres increased in the late 1960s into the 1970s, especially productions from Western Nigeria, owing to former theatre practitioners such as Hubert Ogunde and Moses Olaiya transitioning into the big screen.
In 1972, the Indigenization Decree was issued by Yakubu Gowon, which demands the transfer of ownership of about a total of 300 film theatres from their foreign owners to Nigerians, which resulted in more Nigerians playing active roles in the cinema and film.
The oil boom of 1973 through 1978 also contributed immensely to the spontaneous boost of the cinema culture in Nigeria, as the increased purchasing power in Nigeria made a wide range of citizens to have disposable income to spend on cinema going and on home television sets.
After several moderate performing films, Papa Ajasco (1984) by Wale Adenuga became the first blockbuster, grossing approximately ₦61,000 (approx. 2015 ₦21,552,673) in three days.
A year later, Mosebolatan (1985) by Moses Olaiya also went ahead to gross ₦107,000 (approx. 2015 ₦44,180,499) in five days.
After the decline of the Golden era, Nigerian film industry experienced a second major boom in the 1990s, supposedly marked by the release of the direct-to-video film Living in Bondage (1992); the industry peaked in the mid 2000s to become the second largest film industry in the world in terms of the number of annual film productions, placing it ahead of the United States and behind only India.
It started dominating screens across the African continent, and by extension the Caribbeans and the diaspora, with the movies significantly influencing cultures and the film actors becoming household names across the continent. The boom also led to backlash against Nigerian films in several countries, bordering on theories such as the "Nigerialization of Africa".
Since mid-2000s, the Nigerian cinema have undergone some restructuring to promote quality and professionalism, with The Figurine (2009) widely regarded as marking the major turn around of contemporary Nigerian cinema. There have since been a resurgence cinema establishments, and a steady return of the cinema culture in Nigeria.
As of 2013, Nigerian cinema is rated as the third most valuable film industry in the world based on its worth and revenues generated.