By Increased internet access will generate more consumer spending 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 today by renown audit company, PwC.
A statement issued by PwC said that 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.
Vicki Myburgh, Entertainment and Media Industries Leader for PwC South Africa, said “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%.