25 September, 2017 - 06:18
A report by professional services firm PricewaterhouseCoopers (PwC) released this week on South Africa's entertainment and media (E&M) industry forecasts the sector's total revenue to reach R177.9bn by 2021, up from R132.7bn in 2016 with Internet access the key growth driver and expected to account for R27bn of this increase.
Vicki Myburgh, the E&M Industry leader for PwC Southern Africa, on Thursday, said that South Africa's mobile Internet penetration is forecast to rise to 77.8% by the end of 2021 from 52.3% in 2016.
It is clear that something fundamental has changed in the entertainment and media industry. E&M companies that have become accustomed to competing and creating differentiation, based primarily on content and distribution, need to focus more intensely on the user experience, Myburgh said.
The report analysed the 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 publishing, music, out-of-home, and radio.
The study further found that the South African cinema sector currently presents a mixed picture with overall revenue, including box office and cinema advertising expected to reach R2.2bn in 2021, up from R1.9bn in 2016. South Africa continues to be an attractive destination for international filmmakers.
In July, a report by World Wide Worx with the support of Dark Fibre Africa (DFA) found out that South African Internet user population passed the 20-million mark for the first time last year, reaching 21 million, and is expected to grow to at least 22.5 million in 2017.
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The report revealed that the single most common use of the Internet among South African adults is communication, reported by almost 31 percent of respondents, followed by social networking at 24.9 percent) and information at 23.7 percent, both reported by almost a quarter of respondents. Only then comes entertainment at 22.1 percent.
While the E&M industry is expected to grow in revenues, print media is expected to continue to see depressed margin. However, Myburgh the resulting quest to create the most compelling, engaging and intuitive user experiences is now the primary objective for growth and investment strategies, with technology and data at the centre.
Magazines and newspaper revenue are set to continue their decline. Total newspaper revenue in the South African newspaper market has been unpredictable.
The market showed growth in 2013, declined in 2014 and bounced back marginally in 2015, contracting at a slower rate. In 2016, total newspaper revenue was worth R8.9bn, but this figure is forecast to drop to R7.4bn in 2021.
The PwC study found that Nigeria of the $2.8bn that the Nigerian market will add between 2016 and 2021, all but $452m will come from Internet access revenue. The combined elements of TV and video will add nearly $200m in revenue growth to 2021.
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25 September, 2017 - 06:18 
