Increased Internet access will generate more consumer spend than any other media product or service in the next five years across African continent, a report by PwC has stated.
Giving examples with South Africa, Kenya and Nigeria; the report predicted that South Africa’s entertainment and media market will grow by 10.2percent compounded annually (CAGR) from 2014 – 2018 to a value of R190.4bn, and the that the largest segment will be the internet. Combined revenues from Internet access and Internet advertising will account for an estimated R71.6bn in 2018, accounting for 37.6percent of total revenues, according to PwC’s South African Entertainment and Media Outlook: 2014-2018 (‘The Outlook’).
Vicki Myburgh, Entertainment & Media Industries Leader for PwC South Africa, said; “Growth in the South African entertainment and media industry is largely being driven by the Internet and by consumers’ love of new technology, in particular mobile technology, such as smartphones and tablets, as well as applications powered by data analytics and cloud services. Technology is increasingly being driven by consumers’ needs and expectations.”[eap_ad_2]
Aside from the Internet, The Outlook predicts that the fastest growth will be seen in video games and radio, which will enjoy growth rates at 9percnet and 8.2percent respectively. “Video games has made the greatest transition to digital, largely due to the popularity of mobile gaming, but also because of the increased potential for digital distribution of console games,” added Myburgh. The study projects that 27percent of console revenues will be digital in 2018.
For Nigeria, the report predicted that entertainment and media revenues will reach an estimated US$8.5bn in 2018, more than doubling from the 2013 figure of US$4.0bn at a CAGR of 16.1percent. This represents one of the fastest growth rates in the world. Again, the internet will be the key driver for Nigeria, where the number of mobile internet subscribers is forecast to surge from 7.7 million in 2013 to 50.4 million in 2018.
The Nigerian television segment in the form of advertising, subscriptions and licence fees, will also become a US$1 billion-plus market in 2018, while the market will grow steadily.
Looking at the Kenyan market, the PwC report said the country recorded US$1.7bn in entertainment and media revenues in 2013, it projected will rise to US$3.1bn in 2018. It also noted that internet access is responsible for the growth in television and radio, and will account for combined US$1 billion-plus of revenues at the end of the forecast period.
‘The Outlook’ gave a detailed breakdown of history and forecast data on various sectors such as the Internet, television, filmed entertainment, radio, recorded music, consumer magazine publishing, newspaper publishing, consumer and educational book publishing, business-to-business publishing, out-of-home advertising, video games, and sports.
While measuring the state of connectivity for all markets in sub-Saharan Africa (SSA) with a population of over 10 million, PwC Country Connectivity Index highlighted markets that offer the greatest potential for the future consumption of entertainment and media services because of their relative maturity.
The report noted that as the most mature of Africa’s markets, it should be no surprise that South Africa tops the Index as it offers significant potential as a strong entertainment and media market. Although South Africa scores highly (83percent) across current connectivity and quality of connectivity, there is still room for improvement. Mobile broadband services are still expensive for consumers with almost 0.5percent of a South African consumer’s average GDP per capita going towards mobile broadband services.
Kenya (75percent) also performs well in the rankings with the continued rise in its international bandwidth usages.
Although broadband penetration may be high – as in the case of Nigeria- this does not necessarily mean that a country scores highly. At 0.6percent of the average GDP per capita in Nigeria, the cost of mobile broadband services is too high. [eap_ad_3]