Digital fuels growth in Africa’s entertainment, media industry - PwC

Nigeria’s entertainment and media market grew by 19.3 percent in 2014 to reach $4 billion. By 2019, the market will be more than twice as big, with estimated total revenue of $8.1 billion.

Excluding internet access, television, filmed entertainment and video games are the areas where Nigerian consumers are expected to spend the most over the next five years.

Piracy continues to remain a problem in Nigeria, limiting growth across several entertainment and media sectors.

After more than a decade of digital disruption, the African entertainment and media industry has entered a new landscape – one where the media is no longer divided into distinct traditional and digital spheres, according to a report from PwC titled Entertainment and media outlook: 2015 – 2019 (South Africa – Nigeria-Kenya).

According to the report, Nigeria’s entertainment and media market grew by 19.3% in 2014 to reach $4 billion. By 2019, the market will be more than twice as big, with estimated total revenue of $8.1 billion. As in South Africa, the Internet will be the key driver of growth for Nigeria. Television, comprising revenue from TV advertising and subscriptions, is the other main driver.

Excluding Internet access, television, filmed entertainment and video games are the areas where Nigerian consumers are expected to spend the most over the next five years.

Consumer spend on video games and music is set to see the sharpest rise in forecast CAGRs at 14.3% and 11.4%, respectively. Piracy continues to remain a problem in Nigeria, limiting growth across several entertainment and media sectors.

The report forecasts that South Africa’s entertainment and media industry is expected to grow from R112.7 billion in 2014 to R176.3 billion in 2019, at a compound annual growth rate (CAGR) of 9.4 percent.

Digital spend is expected to fuel the overall growth. South Africa’s Internet access market will rise rapidly from R32.5 billion in 2014 to R76.2 billion in 2019, far ahead of any other consumer spend category, making it the largest contributor to South Africa’s total entertainment and media revenues.

Vicki Myburgh, entertainment and media leader for PwC Southern Africa, says: “This year’s Outlook shows consumer demand for entertainment and media experiences will continue to grow, while migrating towards video and mobile. Increasingly, though, it’s clear that consumers see no significant divide between digital and traditional media – what they want is more flexibility, freedom and convenience in when, where and how they interact with their preferred content.

“Consumers are choosing offerings that combine an outstanding and personalised user experience with an intuitive interface and easy access. This includes shared physical experiences like cinema and live concerts, which appear re-energised by digital and social media.”

Kenya’s total entertainment and media industry was valued at $1.8 billion in 2014, up 13.3% from 2013, when it stood at $1.6 billion. The market is expected to surpass the $3 billion mark in 2019 to reach $3.3 billion.

Again, the Internet is expected to be the largest driver of growth, followed by television and radio. TV advertising will overtake radio in 2016, and Internet advertising will see the fastest growth rate at a CAGR of 16.8%. Traditional mediums such as TV, radio and newspapers will continue to be the first choice for most Kenyan advertisers in the foreseeable future.

“Today’s media companies need to do three things to succeed: innovate around the product and user experience; develop seamless consumer relationships across distribution channels; and put mobile (and increasingly video) at the centre of the consumer’s experience,” Myburgh says.