Africa's Media and entertainment sector appear to be at crossroads
The media and entertainment sector in Africa appears to be at crossroads..........
Against the backdrop of rising digital acceptance, behavioral alterations caused by the Covid-19 pandemic, and stagnant Western markets for businesses such as Netflix, YouTube, and Facebook, the way to future growth in the dynamic sector may pass through Africa.
As a result, Africa's splintered entertainment and media business has reached a fork in the road. Companies will need to be agile as African customers commit more of their time and money to media. While everyone agrees that the sector is about to begin a time of rapid expansion on the world's fastest-growing continent, underlying unpredictability implies that many enterprises will fall behind.
Elsa Majimbo, who was trapped at home in Nairobi by the Covid-19 outbreak and felt isolated, began posting short comical films to Instagram. Majimbo immediately gained a devoted following while sitting in bed munching chips and laughing uncontrollably.
Two years later, she has 2.5 million Instagram followers, magazine covers, fashion campaigns, and a new home in flashy West Hollywood. Majimbo, like many African innovators, from YouTubers and gamers to musicians and actresses, exemplifies the continent's rapid expansion in the entertainment and media business.
The African entertainment sector is still in its infancy, and we have only scratched the surface of what can be accomplished by investing in African creativity," says Marie Lora-Mungai, founder of Restless Global, a strategic advising firm specializing in the African creative and sports sectors. "They all know that their next billion customers will come from Africa, which is why they are all spending extensively on the continent's internet infrastructure," according to the IT titans.
Entertainment and media include a wide range of industries, some of which are well-established in Africa and others that are products of the digital revolution signaled by widespread smartphone use. Newspapers and periodicals, conventional television, live music, cinema, radio, and street-level advertising continue to be popular on the continent, particularly in developing economies, But, they are no match for new businesses such as video and music streaming, internet advertising, and social media in the long run.
Other media sub-sectors, such as mobile gaming, are only now beginning to establish a presence on the continent, thanks in part to the pandemic and associated lockdowns, which disrupted lifetime habits. "Covid-19 forced people to select what was significant and what wasn't," says Sipho Fakela, a leading African media strategist. Several of those new habits have remained.
Growth will be granted to those that have.
The continent's most developed countries are driving impressive growth in entertainment and media in Africa. South Africa, the country's most industrialized, has the most organized market, with a well-established creative industry and a significant talent pool in film, animation, design, gaming, and music. Showmax, its own streaming service, is also available. The introduction of 5G technology in South Africa appears set to boost the business even further by increasing internet speeds and cutting pricing.
Nigeria is Africa's entertainment superpower, dominating in music, movies, fashion, and even visual arts, thanks to its massive young tech-savvy populace.
Conversely, Kenya, East Africa's economic powerhouse and startup hotspot, has enormous potential for entertainment and media enterprises. Country Queen, a dark family drama, was Netflix's debut Kenyan series last year. Ghana, which is quite artistic, also has a lot of potentials.
Smaller countries such as Rwanda, Côte d'Ivoire, and even Benin, according to industry analysts, might potentially assist drive expansion in the sector. Senegal's city, Dakar, has established itself as a West African cultural capital as well as a major sports center. Outside of Sub-Saharan Africa, Egypt, Morocco, and Tunisia are all experiencing rapid growth in gaming, visual arts, and animation, respectively.
Nonetheless, markets such as Namibia and Botswana remain five to six years behind South Africa, according to Fakela, owing to the high cost of streaming data and slower digital acceptance, which forces consumers to rely on traditional media such as newspapers and radio.
According to the GSMA, the mobile network industry organization, only 28% of Sub-Saharan Africans will be online by the end of 2020. In some cases According to Fakela, the state still retains a stronghold on media in third-tier markets, albeit this is changing. "The cheaper data becomes, the more audiences come through," he explained. "It will lead to a lot more fragmentation, but I believe it will lower the cost of media."
According to Lora-Mungai, Africa's entertainment business is in the midst of restructuring. "About five years ago, governments and development financial institutions like Afreximbank, the International Finance Corporation, the Agence Française de Développement and its subsidiary Proparco, and the African Development Bank began seriously looking at the creative sector as a source of growth and job creation," she says.
Monetization in motion
Meanwhile, advances in internet penetration, smartphone ownership, online payments, and monetization tools have enabled African innovators to gain access to the global online marketplace. During the pandemic, she says, platforms like Instagram and YouTube made monetization methods like mobile payments and advertisements available to African entrepreneurs.
According to a report by global consulting firm PwC, as a result of the epidemic, entertainment, and media revenue has expanded substantially in South Africa, Nigeria, and Kenya since 2021. Yet, Covid-19 revealed industry fissures, with certain sub-sectors benefiting from behavioral shifts and others losing out. Some former specialist areas, like gaming, have grown in prominence, while some established sectors, such as newspapers, have declined.
Advertising was the hardest damaged by the epidemic, but it has seen the greatest recovery, with internet advertising projected to increase quickly in the future years. According to the PwC estimate, internet advertising will account for 79.7% of entertainment and media revenue in South Africa by 2026, as consumers spend more time online and advertisers follow. "I believe that in the next five to ten years, the rivalry will be between Google and Facebook versus Netflix or Amazon Prime, rather than Netflix versus the local state broadcaster," adds Fakela.
Other sectors poised for the rapid growth include music and video streaming, whose revenue growth in Africa's largest markets is expected to outpace traditional TV subscriptions by 2026 - though TV will remain much larger. According to PwC, in Kenya, streaming revenue is predicted to reach $8.8 million in 2026, while TV subscription revenue would reach $420 million. Similarly, music streaming is the fastest-growing component of Nigeria's music sector, with Nigerian singers such as Burna Boy and Wizkid topping global charts.
Burna Boy had just sold out the adjacent Capital One arena when President Biden gathered African leaders at the US-Africa Leaders Forum in Washington DC in December to discuss traditional industries such as mining and agriculture.
Gaming is a serious business.
Smartphone gaming is also rapidly expanding. Nowadays, two out of every five South Africans play games on a regular basis, compared to one in every five Nigerians and Kenyans. African pro gamers, such as Kenyans Beast and Queen Arrow, have thousands of admirers.
Non-fungible tokens (NFTs) are another small but rapidly expanding industry in Africa, with Nigeria ranking sixth and South Africa ranking twelfth.
Facebook's parent company, Meta, told PricewaterhouseCoopers that its projected virtual-reality "metaverse" might contribute $40 billion to Sub-Saharan African economies by 2032. In addition, according to research by Ornico, a business intelligence agency, more than 16% of South African consumers had engaged in "virtual world" activities in the last year. Ubuntu land, Africa's first metaverse, was launched in 2021, and MTN Group and ad agency M&C Saatchi Abel have purchased plots in it.
By contrast, newspapers and magazines are anticipated to see their market share shrink. Cinemas may struggle in the long run as streaming usage rises, yet box office income in South Africa remains solid. For the time being, theatres are sprouting up in places such as Dakar and Nairobi, catering to an expanding African middle class.
A boost is on the way for the continent's largest markets in the form of 5G (fifth generation) mobile internet technology, which should usher in cheaper and higher-quality lag-free streaming, cloud gaming, and virtual reality. Following a succession of spectrum auctions, South Africa is on the verge of 5G deployment. In 2021, Nigeria held a successful spectrum auction.
I believe that 5G will play a significant role "We can drastically lower the cost of being connected," says Fakela. "I see it as an economic enabler as well, since you have new enterprises coming up as a result of speedier bandwidth and access in previously underserved areas."
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