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The rise of increasingly personal and personalised media interaction fueled by technology and evolving customer behaviour is gaining momentum. 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. These are some of the highlights from PwC’s 10th annual edition of the Entertainment & Media Outlook: 2019-2023 – An African perspective released today.
These 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.
Consumer spend on Internet access is a major contributor to growth, accounting for 61% of the overall rise in E&M revenue. Total Internet access is forecast to increase at an 8.2% CAGR over the forecast period and reach R77.7 billion in 2023.
Vicki Myburgh, Entertainment and Media leader for PwC Southern Africa, noted that “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.”
The Outlook is a comprehensive source of analyses and five-year forecasts of consumer and advertising spending across five countries (South Africa, Nigeria, Kenya, Ghana and Tanzania) and 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.
Although Internet access’ growth in the share of overall E&M revenue will reduce by 2023, its 46% share of the total in that year will exceed the global average of 33%, indicating that many South African consumers find access alone provides sufficiently compelling and free entertainment experiences.
In his remarks, Charles Stuart, Entertainment and Media Partner, PwC South Africa averred that “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 VR, AR 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% 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% 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.
Between them, 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%. 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. 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,” Myburgh concludes.
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