PwC Africa released a report titled, Africa Entertainment and Media Outlook 2022-2026. The report shows that Kenya has seen continuous growth since 2017, with entertainment and media (E&M) revenues reaching new heights in 2021 (annual growth rate of 12.6%).
The O&M industry is a huge economic driver in many African countries, and just like the rest of the world, large sectors of industry have been impacted by COVID-19. However, the latest analysis of industry performance in major African economies reveals that a more positive trajectory is finally in sight.
The industry is becoming more digital, more mobile, more focused on media that appeals to young people, more evenly distributed around the world and more dependent on advertising in all its forms. This year, the report focuses on the fault lines and fractures that are opening up between entertainment and media industries and companies, and within different media segments.
The Outlook assesses changing consumer behaviors and the ad spend that follows those behaviors. As business models evolve to meet consumers where they spend their time (and money), several fault lines are opening up.
In 2021, Kenya, South Africa and Nigeria saw strong growth in entertainment and media revenue. Industries that were hit hardest in 2020, such as film, live music and B2B trade shows, made a strong comeback, even as revenues remained below pre-pandemic levels. Segments such as video games and OTT video (streaming TV) have reached new heights after thriving under lockdown conditions, while other sectors have proven to be largely “pandemic proof”, with the podcast advertising, albeit on a low base, showing resilient revenue growth of 12.6% in Kenya.
Alinah Motaung, PwC Africa Entertainment and Media Leader, said: “Some of the sectors that have seen immense gains during COVID-19 may not be able to sustain this growth, while others are expected to continue to grow. from their upper bases. Some once-niche sectors, such as gaming, will find their way to the forefront, while other once-dominant sectors such as traditional television, newspapers and mainstream magazines risk seeing their positions weakened. ‘erode.
Advertising, which has been hit hardest by the pandemic, saw the biggest rebound in 2021. From an advertising perspective, it is the Internet advertising segment that we believe will see the most gains. significant in terms of advertising revenue over the five-year forecast period to 2026. This is a trend seen in Kenya, South Africa and Nigeria and globally, and is due to the fact that consumers and advertisers are prioritizing digital.
Connectivity in all markets is limited by underdeveloped infrastructure, which means fixed broadband speeds and quality are less reliable, and consumers have turned to cheaper mobile plans instead.
OTT video streaming revenue is expected to grow rapidly over the next five years, with revenue growth to 2026 expected to outpace growth in TV subscription revenue in all three markets. But that comes from a relatively small base, which means the earnings themselves will remain relatively low.
Looking ahead, we expect future growth in E&M to manifest in the development of the metaverse and the use of non-fungible tokens (NFTs). Meta said the metaverse could bring about US$40 billion to the economies of sub-Saharan markets like Nigeria and Kenya.
The overall growth trajectory is both clear and solid. The vast E&M complex is growing faster than the global economy as a whole, and every year more and more people devote more time, attention and money to the complex and increasingly immersive E&M experiences that s offer to them.
