Nigeria has been projected to become the world’s fastest-growing entertainment and media market in the next five years, according to a report by professional advisory firm, PwC.
The report shows that Nigeria with a compound annual growth rate (CAGR) of 12.1%, strongly influenced by surging spending on mobile Internet access, will be the world’s fastest-growing E&M market over the coming five years while the slowest-growing will be Japan, growing at a 1.7% CAGR.
“While technologically advanced economies like Japan will be growing at a compound annual growth rate (CAGR) of about 1.7 percent , Nigeria which can at best be described as a start-up country with CAGR of 12.1 per cent will position as the world’s fastest growing E&M revenue earner,” the report stated.
PWC projected that over the next five years, the entertainment and media industry globally will grow at a compound annual growth rate (CAGR) of 4.2%, lagging behind the growth of global GDP.
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“Within this overall increase, global advertising revenue will also grow at a CAGR of 4.2% – down from 5.1% in last year’s Global entertainment and media outlook. This slowdown reflects pressures on ad-supported business models, driven by consumers’ preference for ad-free experiences and advertisers’ dissatisfaction with the current measurement capabilities available with digital media,” it stated, noting that while advertisers are still willing to spend, growth in ad spend is now overwhelmingly driven by Internet advertising.
The report stated that the advanced countries spend a lot up to $500 per capita annually on media and entertainment but less advanced countries though spending less are growing faster because of the very low base they are operating from.
“While consumers in mature markets such as North America and Europe, and wealthier Asia-Pacific markets, spend a lot, more than US$500 per capita annually, on entertainment and media, growth rates are relativelyslow in these areas,” the report highlighted, adding that in contrast, less developed economies feature much lower per capita spending and faster growth albeit from a very low base, which is often less than US$50 a year in many cases.
The growth rate in Nigeria’s media industry, according to analysts may not be unconnected with the growing Internet penetration and the voracious appetite to consume homemade content, especially music and films.
By implication the growing rate of the sector may constitute a major handle to the nation sliding out of recession and the sector becoming a major driver of growth in the near term.
The report equally noted that dramatic shifts are underway in how entertainment and media companies compete and generate value, as the quality of the experience they deliver to consumers becomes theirprimary basis for strategic differentiation and revenue growth.
It also posit that to thrive in a marketplace that is increasingly competitive, crowded, and slower-growth, companies must develop
strategies and build capabilities to engage and monetize their most loyal and passionate users, their fans.
This means they must combine compelling content with breadth and depth of distribution, and then connect it all to a great user experience, where content is discoverable easily on an array of screens and at an attractive price.
Femi Osinubi, Technology, Information, Communications and Entertainment (TICE) Industry Leader at PwC Nigeria, said: “A raft of changes in technology, user behaviour and business models have opened up a gapbetween how consumers want to experience and pay for E&M offerings, and how companies produce and distribute them.
The PWC report essentially provides the most recent and up-to-date forecast of consumer and advertising spend data as well as related commentary for 17 entertainment and media segments across 54 countries, Nigeria inclusive.