PRESS RELEASE
Increased
Internet access expected to generate more consumer spend across the
African continent over the next five years: PwC report
Radio dominates the advertising sector in Tanzania, contributing just over 50% of revenues, with TV accounting for about 30%
JOHANNESBURG, South-Africa, September 18, 2014/ -- Increased
Internet access will generate more consumer spend than any other media
product or service in the next five years in the South African
entertainment and media industry, according to a report issued by PwC
today (http://www.pwc.com).
South Africa’s entertainment and media market is expected to grow by
10.2% compounded annually (CAGR) from 2014 – 2018 to a value of
R190.4bn. By far 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 37.6% of total revenues,
according to PwC’s South African Entertainment and Media Outlook:
2014-2018 (‘The Outlook’).
Photo: http://www.photos.apo-opa.com/index.php?level=picture&id=1377 (Vicki Myburgh, Entertainment & Media Industries Leader for PwC South Africa)
Vicki
Myburgh, Entertainment & Media Industries Leader for PwC South
Africa, says: “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.”
The
fifth edition of PwC’s ‘South African Entertainment and Media Outlook’
presents annual historical data for 2009-2013 and provides annual
forecasts for 2014-2018 in 12 entertainment and media segments.
The
Outlook includes historical and forecast data on 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. It gives a detailed breakdown of these sectors.
The Outlook also includes detailed information for South Africa, Nigeria and Kenya in each of the 12 industry segments.
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 9% and
8.2% 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,” adds Myburgh. The study projects that 27% of console revenues
are forecast to be digital in 2018.
The
slowest growing segment in the E&M industry will be the music
industry, according to the survey. Annual revenue is forecast to grow
marginally by a CAGR of 0.5% to remain relatively flat at R2.18bn in
2018.
Television
is the second-largest segment, with combined revenues from TV
subscriptions and advertising projected to reach R39.6bn in 2018. The
study shows that advertising accounted for 38% of revenue in the E&M
industry in 2013, although this share is expected to fall to 33% in
2018, largely due to internet access increasing its market share
significantly over the same period.
The
strongest drivers of growth in the sports segment will come from
sponsorships and media rights. South Africa will see total sports
revenues of an estimated R20.5bn in 2018, up from R14.8bn, and rising at
a CAGR of 6.7%.
End-user
spending, consisting of spending by consumers and other end-users on
products and services produced by the entertainment and media industry,
will rise at 12% CAGR over the next five years from R72.8bn in 2013 to
reach an estimated R128.1bn. Although there is a significant change in
the way consumers spend their money, digital revenues in other segments
remain relatively small. Nevertheless digital is on the rise both in
terms of consumers and advertising revenues. The study also shows that
revenue in the film industry is expected to grow by a 7.1% CAGR over the
next five years to reach R3.4 billion in 2018. Electronic home video is
also catching on rapidly in the film segment. Far less digital take-up
is being seen in the magazine, newspaper and book segments, with digital
revenues for each forecast to be under 7% of the total, even in 2018.
Although consumers may be browsing newspapers and magazine-style
websites online, monetising these consumers presents much more
difficulty for E&M businesses.
Nigeria
Nigeria’s
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
16.1%. This represents one of the fastest growth rates in the world. 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.
Television
in the form of advertising and subscriptions and licence fees, will
also become a US$1 billion-plus market in 2018, while the market will
grow steadily.
Kenya
Kenya
recorded US$1.7bn in entertainment and media revenues in 2013, and this
is forecast to rise to US$3.1bn in 2018. Once again, it is Internet
access that is driving growth Television and radio will account for
combined US$1 billion-plus of revenues at the end of the forecast
period.
PwC Africa Connectivity Index
The
objective of the PwC Country Connectivity Index is to measure the state
of connectivity for all markets in sub-Saharan Africa (SSA) with a
population of over 10 million. The findings presented in the Index
highlights those markets that offer the greatest potential for the
future consumption of entertainment and media services because of their
relative maturity in terms of connectivity.
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 (83%) across current connectivity and quality of connectivity,
there is still room for improvement. Mobile broadband services are still
expensive for consumers with almost 0.5% of a South African consumer’s
average GDP per capita going towards mobile broadband services.
Kenya (75%) 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 0.6% of the
average GDP per capita in Nigeria, the cost of mobile broadband services
is too high.
The next wave of growth markets in SSA
Highlighted
below are three snapshots of SSA markets with a particular focus on
their TV and broadband markets and assessment of the scope for growth in
their entertainment and media sectors.
Angola
Much
of the media in Angola is government-controlled. Deregulating the media
is a gradual process and the handful of emerging ‘private’ radio and
newspaper operations are mostly bankrolled – so limiting their
independence. Among TV households, pay-TV penetration is high at 75%. TV
currently comprises 28% of advertising spend, a figures that is likely
to drop by two percentage points over the next five years. Angola is
comparatively well connected, with about one in ten Angolans able to
access the Internet by way of a mobile network and two percent of
households also able to access fixed broadband services. However,
international bandwidth is still scarce. If the country’s Internet
market is to be better penetrated, greater infrastructure investment
will be required.
Ghana
A
relatively mature TV and Internet infrastructure in Ghana assists in
making it a market in which consumers are more receptive to advertising.
At the end of 2013, 58% of households had access to a TV set, according
to the study. The leading four terrestrial channels comprised 96% of
audience time and 12% of TV households were digital. In spite of a
decline in 2011, total advertising revenues are now on the rise again
with total spend reaching GHS245.6 million (US$73.3 million) in 2012.
Ghana scores well in the Connectivity Index. The Government appears
committed to supporting growth plans for broadband services which are
relatively affordable compared to other markets in the continent.
Tanzania
As
at the end of 2013, 13% of Tanzanian households had access to a TV set,
according to independent analyst and consultancy firm Ovum. This number
has dropped slightly in the last two years as a result of the state’s
decision to proceed with an analogue terrestrial switch-off before the
public was ready, leading to many households actually losing their
access.
Ovum
forecasts another fall in TV adoption in 2015 when national analogue
switch-off takes place, but the numbers of those with access to TV will
rise again to one in five of the population in 2019.Radio dominates the
advertising sector in Tanzania, contributing just over 50% of revenues,
with TV accounting for about 30%. Of the three markets covered in our
studies, Tanzania ranks highest. The Government has embraced competition
and the role of the private sector in improving economic and social
development.
Myburgh
concludes: “The future may well be digital in South Africa, as with the
rest of the world – many of its products and services can already be
delivered in digital form. But we believe that progress in the South
African E&M market will be gradual and that there are still plenty
of opportunities for ‘old’ and ‘traditional’ media yet.”
.JPG)
Post a Comment
unashauriwa kutoa maoni muda na wakati wowote na kama unahabari yeyote unaruhusiwa kututumia