Connected devices: The ongoing spread of services to mobile networks, novel devices and emerging markets will change how media and entertainment are served, consumed and monetised
Kenya’s total entertainment and media industry is expected to surpass the $3 billion (Sh300B) mark in 2019 thanks to the expanding and growing digital media. According to a report released by PwC covering the entertainment and media sector in South Africa, Kenya and Nigeria, the internet will continue to feed consumer appetite for entertainment and media in the next four years.
Vicki Myburgh, entertainment and media leader for PwC Southern Africa, says traditional and new media is approaching convergence where consumers are increasingly seeing no significant divide between the new and the old media.
“This year’s outlook shows consumer demand for entertainment and media experiences will continue to grow while migrating towards video and mobile,” says Myburgh.
Kenya’s total entertainment and media industry was valued at US$1.8 billion in 2014, up 13.3% from 2013, when it stood at US$1.6 billion.
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 per cent. Traditional mediums such as TV, radio and newspapers will continue to be the first choice for most Kenyan advertisers in the foreseeable future, according to the Entertainment and media outlook 2015-2019 report.
In South Africa, the Outlook projects the entertainment and media industry will grow from R112.7 billion in 2014 to R176.3 billion in 2019. 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.
“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,” explains Myburg.
The Outlook presents annual historical data for 2010–2014 and provides annual forecasts for 2015–2019 in 11 entertainment and media segments: the Internet, television, filmed entertainment, video games, business-to-business publishing, recorded music, newspaper publishing, magazine publishing, book publishing, out-of-home advertising and radio.
Aside from the Internet, the Outlook predicts that the fastest growth will be seen in video games, business-to-business and filmed entertainment.
“But it is Internet access itself that is acting as a driver of revenues in video games and film, creating new revenue streams by making over-the-top (OTT)/streaming or social/casual gaming viable to more consumers and thereby cancelling out physical falls,” adds Myburgh.
Music, magazines and newspapers, which will show only moderate consumer growth, are three segments that face strong competition from the Internet. The report also shows that one consistent global trend on the rise is consumer spending through to 2019 on video-based content and services, against far flatter prospects for spending on primarily text-based content and services.
Alongside video providers, a further thriving source of revenue over the coming five years will be live events. Revenue from live music is expected to grow at 7.9 percent in the next five years.
“Affordable Internet access will continue to digitally disrupt the market in novel and innovative ways. The ongoing spread of services to mobile networks, novel devices and emerging markets will change how media and entertainment are served, consumed and monetised in multiple ways. Affordable Internet access will also inhibit the revenue growth of various sectors as consumers use it to access free, ad-funded and lower-priced subscription-based versions of new and existing media services,” says Myburgh.
Nigeria’s entertainment and media market grew by 19.3 percent in 2014 to reach US$4 billion. By 2019, the market will be more than twice as big, with an estimated total revenue of US$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.