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Five-year projections of consumer and advertiser spending data across Entertainment and Media segments for South Africa, Kenya and Nigeria.
Entertainment and media (E&M) revenue across South Africa, Nigeria and Kenya grew strongly in 2021 as all three markets, like the rest of the world, recovered from the effects of the COVID-19 pandemic.
Some of the sectors that saw immense gains amid the pandemic will not be able to sustain that growth, while others will continue to build from their higher bases. Some formerly niche sectors, such as gaming, will barrel their way into prominence, as other formerly dominant sectors will see their positions erode.
Industries that were more severely impacted in 2020, such as cinemas, live music and B2B trade shows, made strong comebacks and sectors such as video games and OTT video rose to new heights after thriving under lockdown conditions.
Understanding where consumers and advertisers are spending their money in the entertainment and media industry can help inform many important business decisions. The findings of PwC's Africa Entertainment and Media Outlook 2022-2026 uncover the latest trends, key perspectives and insights into the entertainment and media market helping the industry shape its strategies for the future. The Outlook includes five-year projections of consumer and advertiser spending data across Entertainment and Media segments for South Africa, Kenya and Nigeria.
Having been shut down by COVID-19 and enduring two highly unsettled years as content holders experimented with other release strategies, the vast majority of the world’s cinema screens are now back open and operating, and the sector is returning to some sort of normality. In South Africa, Kenya and Nigeria, cinemas are operational and the post-COVID recovery is well underway.
Like cinema, live music is another sector of the E&M industry which was severely impacted by the pandemic. Across South Africa, Nigeria and Kenya, live music ticket sales revenue collapsed as artists and bands were forced to cancel tours and concerts. All three African markets performed worse in 2020 than the global average, as border restrictions meant that major international artists were unable to perform.
OTT has made inroads across Africa in recent years, and the continent is led by two platforms: Netflix and Showmax. Showmax, African pay-TV provider MultiChoice’s OTT offering, has a slate of African originals and global sports coverage to pull in viewers. Showmax also has partnership deals with telecom operators in the region, providing both carrier billing and promotional pricing opportunities for the public. Netflix, meanwhile, has a vast content library and a regular cadence of updated original and licensed content. The platform’s first Kenyan series, family drama Country Queen, was released in July 2022.
40% of South Africa’s population play games, compared to 23% in Nigeria and 22% in Kenya. Gamers across these African markets overwhelmingly prefer to play via mobile devices, as access to consoles and PCs can be expensive and require continuous Internet access.
Across global markets, it was the advertising sector which experienced the sharpest contraction in spend in 2020, followed by the largest rebound in 2021. This trend was reflected across South Africa and Kenya, with advertising revenue in 2020 falling by -14.9% and -2.5%, respectively, before rebounding by 19.8% and 23.0% in 2021. Nigeria was somewhat of an outlier in that advertising revenue continued to grow in 2020, but the rate was significantly reduced, and like in South Africa and Kenya, the market saw a rapid acceleration in 2021. Podcast advertising proved itself to be largely ‘pandemic-proof’ throughout 2020, with revenue growing by 30.4% in that year in South Africa, and 41.8% in Nigeria.
From an advertising perspective, it is the Internet advertising segment which will see the largest gains in revenue terms across the five-year forecast period to 2026. This is a trend seen across South Africa, Nigeria and Kenya, and also at a global level. This year, PwC’s historic total Internet advertising
revenue estimates have been revised upwards. Digital’s share of total advertising spend in South Africa continues to lag the global average. In 2021, digital accounted for 52.4% of ad revenue in the country, compared to 64.3% globally. While the sector has historically been limited by levels of connectivity, it has made strong gains in recent years, particularly since the outbreak of the COVID-19 pandemic.
Data consumption is continuing to grow rapidly across the world, and African markets are no exception, with both South Africa and Nigeria seeing faster growth in 2021 than the global average (Kenya is not covered in this segment). Mobile phones are the most popular format globally for data consumption, ahead of the other devices category, which counts data consumed via devices such as smart TVs and games consoles, and the portable devices category, which includes laptops and tablets. In South Africa and Nigeria, mobile handsets take a higher proportion of each market’s data consumption compared to the global average, and portable devices are used more than other devices.
Future E&M growth will be seen in the development of the metaverse and the use of non-fungible tokens, or NFTs. Meta stated that the metaverse could contribute around US$40.0bn to the economies of Sub-Saharan markets like Nigeria and Kenya. More than 16% of South African consumers have participated in a ‘virtual world’ in the last 12 months. Africarare, Africa’s first metaverse, was launched in 2021. Non-fungible tokens, or NFTs, have also seen rapid adoption in some African markets. According
According to research by Finder.com published in late 2021, Nigeria ranked sixth globally for NFT ownership, while South Africa ranked 12th.
Understanding where consumers and advertisers are spending their money in the entertainment and media industry can help inform many important business decisions.
PwC’s Global Entertainment & Media Outlook provides a single comparable source of consumer and advertiser spending data and analysis. Updated annually, the intuitive online tool allows you to easily browse, compare and contrast spending and growth rates.
Partner and Leader | Private Business Services, PwC Kenya
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