Nigeria’s entertainment and media (E&M) industry is seen grossing over $2.8 billion in the next four years on growing consumer experience and increasing advertisement spend. This is according to a PwC’s report ‘Entertainment and media outlook: 2017 – 2021: An African perspective’ released in the week.
The outlook, 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 publishing, music, out-of-home, and radio, indicates that Nigeria’s E&M market would add $2.8 billion between 2016 and 2021.
PWC recognizes Nigeria as one of the fastest-growing countries in the outlook but warned that the earnings figures should be treated with caution as huge proportion of the projected growth would come in form of Internet access revenue alone.
“In terms of total E&M revenue, Nigeria is one of the fastest-growing countries in our Outlook, but this figure must be treated with caution, as a huge proportion of that growth comes from Internet access revenue alone–specifically mobile Internet access revenue.
“Of the US$2.8 billion that the Nigerian market will add between 2016 and 2021, all but US$452 million will come from Internet access revenue. The combined elements of TV and video will add nearly US$200 million in revenue growth to 2021,” the report noted.
The report specifically noted that user experience has taken centrestage in Africa’s entertainment and media industry, that amid shifting consumer preferences, rapid advances in technology and ongoing disruption to business models, the new strategic imperative for entertainment and media (E&M) companies is to turn customers into fans – by innovating to create the most compelling, engaging, and intuitive user experiences.
“Significant shifts are underway in how Africa’s E&M companies compete and generate value, as the quality of the experience they deliver to consumers becomes their primary basis for strategic differentiation and revenue growth,” the outlook pointed out.
It added that to thrive in a marketplace that is increasingly competitive and crowded, companies are focusing on implementing strategies and building capabilities to engage with consumers.
“Companies that wish to capture value amid shifting consumer preferences and business model disruptions must focus on an increasingly prominent source of competitive advantage: the user experience.
“They must harness technology and data to attract, retain and engage users–and convert them into devoted fans,” says Vicki Myburgh, Entertainment and Media Industry Leader for PwC Southern Africa, adding, “These imperatives assume a larger importance because, as we document in the Outlook, the entertainment and media industry is confronting several challenges to continued top-line growth.”
The report highlighted that South Africa continues to remain the largest TV market on the African continent, with total revenues of R40.9 billion in 2016. The total TV market is estimated to be worth R51.2 billion by 2021. At this time, end-user spending (Pay-TV subscriptions, physical and Internet home video and license fees) will account for 56.7% of the total TV market.
Myburgh says something fundamental has changed in the entertainment and media industry, that E&M companies that have become accustomed to competing and creating differentiation, based primarily on content and distribution, and the need to focus more intensely on the user experience.
“The marketplace has increasingly become more competitive, slower-growing and dependent on personal recommendations.
“Thriving in this new world of intense competition and continual disruption will be challenging. The opportunities are, however, immense. Across the industry, 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.
“Accordingly, companies will need to develop strategies to engage, grow and monetise their most valuable customers: their fans,” Myburgh said.