Young audience, digital channels powering Kenya’s media industry growth — PwC Africa

 Young audience, digital channels powering Kenya’s media industry growth — PwC Africa

Kenyan musician Nikita Kering. According to PwC Africa media industry insights, live music shows and business-to-business trade shows made a strong comeback last year following the easing of Covid-19 curbs, although the revenues remained below pre-pandemic levels.

Kenya’s Entertainment and Media (E&M) industry has seen continued growth since 2017, with revenue growing by 12.6 percent last year, the latest insights by advisory firm PwC Africa show.

The Africa Entertainment and Media Outlook 2022-2026 analysis adds thatthe industry is becoming more digital, with increased use of mobile, and more pitched at media that attract the young audience. The report notes that the industry is now more evenly distributed around the globe and more dependent on advertising in all its forms.

The (E&M) industry is a considerable economic driver in many African countries, and just like the rest of the world, large sectors within the industry were adversely affected by the Covid-19 pandemic.

However, the latest analysis of the industry in key African markets paints a more positive trajectory that is finally in sight.

This year, the focus of the report is on the fault lines and fractures that are opening up between entertainment and media industries and companies, and within different media segments.

The outlook assesses evolving consumer behaviours—and the advertising trends that follow those behaviours. As business models shift to meet consumers where they spend their time (and money), several fault lines are opening up.

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Last year, Kenya, South Africa and Nigeria markets saw strong growth in entertainment and media revenue with segments that were severely hit in 2020, such as cinema, live music shows and business-to-business trade shows, making strong comebacks following easing of Covid-19 curbs, although the revenues remained below pre-pandemic levels.

Further, video games and OTT (streaming TV) video segments edged up to new heights after thriving during the lockdown season, while other sectors proved to be largely ‘pandemic-proof’, with podcast advertising, albeit off a low base, showing resilient earnings jump of 12.6 percent in Kenya market.

Alinah Motaung, PwC Africa Entertainment and Media Leader, says the pandemic accelerated changes in consumer behaviour and digital adoption in ways that will affect growth trajectories in the years ahead.

“Some of the sectors that saw immense gains during COVID-19 might not be able to sustain that growth, while others are set to continue to build from their higher bases. Some formerly niche sectors, such as gaming, will barrel their way into prominence, as other formerly dominant sectors such as traditional TV, newspapers and consumer magazines are at risk of seeing their positions erode,” she explained.

Advertising, internet connectivity and consumption

Advertising, which was hit hard by the pandemic economic woes, experienced the largest rebound in 2021. From an advertising perspective, it is the internet advertising segment that we expect to see the largest gains in advertising revenue terms across the five-year forecast period to 2026, PwC notes. This is a trend seen across Kenya, South Africa, and Nigeria and at a global level, and is due to consumers and advertisers prioritising digital.

Internet connectivity in all markets is, however, constrained by underdeveloped infrastructure, meaning that the speed and quality of fixed broadband remain less reliable, pushing consumers to cheaper mobile packages.

OTT video streaming revenue is set to rise rapidly over the next five years, with revenue growth to 2026 expected to outpace increases in TV subscription earnings in Nigeria, Kenya and South Africa. But this is from a relatively small base, meaning that revenue itself will remain comparatively low.

The next new thing

Looking ahead, PwC Africa expects future E&M growth to be seen in the development of the metaverse and the use of non-fungible tokens (NFTs).

Meta stated that the metaverse could contribute about US$40 billion to the economies of Sub-Saharan markets such as Nigeria and Kenya.

The overall growth path is both clear and strong. The vast E&M complex is growing more rapidly than the global economy as a whole, and with each passing year, more people are spending more of their time, attention and money on the complex and increasingly immersive E&M experiences that are available to them.



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