Revenue from South Africa’s Entertainment and Media industry is projected to hit $12 Billion by 2022, a report from PriceWaterhousCoopers (PwC) has affirmed.
Africa’s entertainment and media industry has entered a dynamic new phase – a third wave of convergence. The borders that once separated the entertainment and media (E&M), technology and telecommunications industries are blurring in the battle for the attention of the consumer in a world that is rapidly digitising. As the mobile device cements itself as the pre-eminent source of the E&M experience, the most disruptive, forward-thinking companies are striving to create an integrated ecosystem suited to this consumer-driven dynamic. This is according to PwC’s ‘Entertainment and media outlook: 2018 – 2022: An African perspective’ released this week.
PwC, which has a presence in 34 African countries with an office footprint covering 66 offices, says that by 2022, total E&M revenue in South Africa is expected to reach R177.2 billion ($12 billion), up from R129.2 billion ($8.8 billion) in 2017.
Internet (access and advertising) is expected to grow at a compound annual growth rate (CAGR) of 11.3% over the forecast period to reach R91.2 billion, up from R53.4 billion in 2017.
Overall E&M growth will be less reliant on Internet access revenue as organic growth opportunities in Internet connections start fading towards the end of the forecast period. Internet advertising will greatly exceed TV advertising in terms of growth, leading the way with a 13% CAGR over the forecast period to reach R9.4 billion and overtake TV advertising spend in 2022.
The Outlook is a comprehensive source of analyses and five-year forecasts of consumer and advertising spending across five countries, which include South Africa, Nigeria, Kenya, Ghana and Tanzania and 14 segments, including: Internet, data consumption, television, cinema, video games, e-sports, virtual reality, newspaper publishing, magazine publishing, book publishing, business-to-business (b2b), music, out-of-home (OOH) and radio.
“It’s clear we’re in a rapidly evolving media ecosystem that’s experiencing Convergence 3.0,” said Vicki Myburgh, Entertainment and Media Leader for PwC Southern Africa.
“In Convergence 3.0, the dynamics of competition are evolving while a cohort of ever-expanding super competitors and more focused players strive to build relevance at the right scale. Business models are being reinvented so all players can tap into new revenue streams, by, for example, targeting fans and connecting more effectively with customers to develop a membership mind-set,” she explained.
“The pace of change isn’t going to let up anytime soon. New and emerging technologies such as artificial intelligence and augmented reality will continue to redefine the battleground. In an era where faith in many industries is at a historically low ebb and regulators are targeting media businesses’ use of data, the ability to build and sustain consumer trust is becoming a vital differentiator,” Myburgh continued.
South Africa’s E&M industry faced a challenging year in 2017 amidst economic and socio-political uncertainty. Total E&M revenue rose at a comparatively low rate of 6.8% year-on-year to R129.2 billion. According to PwC, a bounce-back in 2018 sees an anticipated 7.6% year-on-year growth, while the CAGR to 2022 is forecast at 6.5%.
The company’s analysis indicates that South Africa will see a strong CAGR of 7.6% for consumer revenue to 2022, moving from R93.9 billion in 2017 to R135.7 billion in 2022.
The report shows that advertising in the E&M industry was mostly affected by South Africa’s economic environment, with cautious growth of just 1.9% year on year. An improvement is expected to 2022, with a 3.3% CAGR bringing total advertising revenue to R41.5 billion, from R35.3 billion in 2017.
“To succeed in the future that’s taking shape, companies must re-envision every aspect of what they do and how they do it. It’s about having, or having access to, the right technology and excellent content, which is delivered in a cost-effective manner to an engaged audience that trusts the brand. For those able to execute successfully, the opportunities are legion,” Myburgh concluded.