PwC’s Outlook forecasts rise in media, entertainment revenue by 2023
Consumers around the world continue to interact with personalised media products, fueled by technology and evolving customer behavior.
Daily, consumers are using an array of connected devices to organise, curate and discover their own unique worlds of media. In response, companies are designing their offerings to revolve around personal preferences, using data and usage patterns to pitch their products, not at audiences of billions, but separately at billions of individuals.
The Outlook is a comprehensive source of analyses and five-year forecasts of consumer and advertising spend across five countries (South Africa, Nigeria, Kenya, Ghana, and Tanzania), covering 14 segments: Internet, data consumption, television, cinema, video games, e-sports, virtual reality, newspaper publishing, magazine publishing, book publishing, business-to-business, music, out-of-home (OOH), and radio.
The 10th edition of the Entertainment & Media Outlook: 2019-2023 – An African perspective recently released by PwC shows profound shifts are taking place against a background of ongoing global growth in entertainment and media (E&M) revenues. By 2023 total E&M revenue in South Africa is expected to reach R170.5 billion, up from R128.9 billion in 2018. Consumers’ spend on internet access is a major contributor to the growth, accounting for 61 per cent of the overall rise in E&M revenue. Total internet access is forecast to increase at an 8.2 per cent.
Entertainment and Media Leader for PwC, Southern Africa, Vicki Myburgh, said, “This year, The Outlook looks at the industry through the eyes of the consumer – the central theme of this growing media is personal and increasingly digital. There is an increasing shift to personalised experiences all around us in the fast-changing human behaviours involving E&M.
“Consumers around the world want to exert greater control over how they experience and enjoy media content. They are managing their own media consumption by way of smartphones and an expanding array of devices, by curating their own personal selection of channels via over-the-top (OTT) services and by bringing more digital media content into their lives via smart homes and connected cars.”
It shows that the annual revenue growth will continue in the E&M industry, although internet access’ growth in the share of overall E&M revenue will reduce by 2023, its 46 per cent, as share of the total in that year will exceed the global average of 33 per cent.
Also, Entertainment and Media Partner, PwC South Africa, Charles Stuart, noted, “The advent of 5G networks will also impact the entire technology, media, and telecommunications value chain over the next decade. 5G will impact virtually every industry, but E&M companies will be among the earliest to incorporate 5G into their offerings and business models. It will also enhance the customer experience further and accelerate growth for many subsectors within the E&M industry, from video games to high-definition video streaming of sporting events.”
The growing segments of visual reality, audio reality and mixed reality (MR) will also accelerate as a result of 5G. The potential use cases from this mobile revolution will be seized by the most agile and innovative E&M companies to create new revenue streams stretching into, and fundamentally changing the future.
In Nigeria, E&M revenue is set to rise at 19.3 per cent Compound annual growth rate (CAGR) to reach US$10.8 billion in 2023 from US$4.5 billion in 2018. Nigeria’s E&M revenue is dominated by internet access in 2018, and the figure will rise to 81 per cent in five years’ time. Although the internet dominates much of the revenue, there is still room for improvement in service.
Outside of Internet access, TV and video will push towards US$1 billion in revenue by 2023 after adding US$172 million over the five years. Kenya Kenya’s E&M market is set to see growth at 10.3 per cent CAGR over the next five years, reaching nearly US$3.0 billion in 2023. Internet access is integral to this revenue and growth, but not quite to the extent that it is in Nigeria.
Ghana’s E&M industry is set for the fastest growth of any of the countries considered in the Outlook, forecast to rise at a 19.8 per cent CAGR to reach nearly US$3 billion by 2023. This comes after the country’s E&M market rose 36.3 per cent year-on-year in 2018, to reach US$1.2 billion. TV and video are the largest contributors in terms of non-access revenue. Over two-thirds of Ghana’s TV industry is attributable to advertising revenue, with the subscription TV market limited and struggling for growth.
Tanzania’s total E&M revenue rose 17.2% year-on-year in 2018, reaching US$598 million. A CAGR of 18.3 per cent will see the market stand at US$1.4 billion by 2023.
South African consumer revenue is set for a 6.4 per cent CAGR between 2018 and 2023, increasing from R99.4 billion to R135.6 billion. Advertising revenue in South Africa rose by 2.8 per cent year-on-year in 2018, reaching a total of R29.5 billion.
Radio continues to have a solid listener base in South Africa with 47 per cent of listeners tuning in for more than 20 hours in a given week. All being well over the next five years, total radio revenue has the potential to edge towards the R5.0 billion-mark, totaling R4.8 billion in 2023.
The five countries considered in the Outlook will add US$13.1 billion in revenue over the next five years, a CAGR of 11.9 per cent. This is indicative of the still-strong capacity for organic growth across the countries with many millions of consumers seeing improvements in their discretionary incomes over the next five years that will enable them to enjoy E&M experiences.
“The breakneck pace of technological progress is the catalyst for growth, as internet access revenue rises drive overall revenue forward,” Myburgh said. “But away from this, trends and norms differ greatly by country, with markets firmly resisting easy characterisation.
All of this means that companies that want to position themselves for a successful future will have to focus intently on consumers, innovate and experiment continually and be prepared to make significant investments.”
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