Insights for the Future of Media & Entertainment in Africa

The global Media and Entertainment industry has experienced a very turbulent time in recent years. The Covid pandemic disrupted much of the in-person entertainment industry, but at the same time caused a boom cycle for the likes of Netflix and other streaming providers as they helped many through the boredom of being stuck at home. According to the World Economic Forum the pandemic has not fundamentally impacted long term revenue growth (predicted to be a steady 5% CAGR to 2025), with some of the consumer habits learned during the pandemic becoming embedded (1). However, not all is rosy in entertainment land as Netflix’s share price has struggled to recover from its post-pandemic crash with flat revenues (2), while Disney+ lost 4m subscribers in the last year, with financial losses continuing but declining from previous years ($659m compared to $1,1bn for the previous year) (3).

Major markets in sub-Saharan Africa include?South Africa,?Kenya, Nigeria,?Tanzania, and?Ghana, all of which have vibrant consumer entertainment and media industries. Over-the-top (OTT) TV and video are driving significant revenues, led by SA and Nigeria where revenues are predicted to reach $408m and $223m respectively in 2024 (4). However, Pay TV is still dominant where in 2022 revenue reached $5bn and estimates suggest continued growth, reaching a value of over $6.4bn by 2028 (5). It’s no surprise that the SA based Multichoice Group continues to lead in the Pay TV space across Africa, but as its traditional linear satellite and terrestrial TV business has come under pressure it has struggled to prop up revenues with its OTT offerings.

What is the outlook for the industry on the continent and how will media and entertainment companies succeed in tapping into the vast potential? Well, lets look at 4 key trends that may shape the future of the industry:

Africa’s population: Africa has the youngest and fastest growing population in the world, creating a massive underserved market.

Data and connectivity: Data pricing on the continent is declining and 4G/5G connectivity is increasing, providing better access to more consumers and especially the youth.

Content: Local content on a per country basis (remember, Africa is not a country) produced by even the global players like Netflix is driving increased consumption as consumers enjoy entertainment based on their local culture.

Consumption preferences: Like the rest of the world African consumers are moving away from linear experiences and towards on-demand entertainment that is enabled through digital, accelerating the shift from traditional consumption channels.

It is evident from these trends that the shift away from traditional media and especially Pay TV (satellite and terrestrial set-top box driven entertainment) will continue to accelerate, with a distinct shift to new digital and flexible experiences driven by OTT TV and video. However, capturing the next wave of consumers in the market will not be a simple and straightforward exercise. Companies need to focus on a few key elements that will accelerate penetration and drive continued growth;

Double down on local talent: Africa boasts a wealth of creative talent across various disciplines. Companies should actively collaborate with local artists, musicians, actors, and content creators to develop compelling and authentic content.

Harness social media: Companies should actively engage with their audience, fostering conversations, and creating interactive experiences to help generate buzz, attract new viewers, and generate new revenue opportunities.

Explore mobile and micro-payment solutions: Companies should explore mobile payment solutions and micro-payment models to make their content more accessible and affordable to help capture a larger audience and drive revenues.

Leverage data: Companies should invest in data analytics tools and AI research to identify new audiences, create tailored content strategies, optimize distribution channels, and monetize their offerings more effectively.

Expand beyond traditional media: This could include ventures into live events, merchandising, brand partnerships, and licensing deals that capitalize on the growing demand for unique experiences.

Foster strategic partnerships: Collaboration with other industry players, including technology companies, telecommunications providers, and distribution platforms, can unlock new opportunities for growth. Strategic partnerships can facilitate access to broader audiences, improve distribution capabilities, and provide additional resources for content creation and promotion.

By embracing these trends and adopting a proactive approach to innovation, media and entertainment companies in Africa can position themselves for success in the rapidly evolving landscape, capture new revenue streams, and ultimately contribute to the growth of the industry on the continent.

References:

1.?????https://www.weforum.org/agenda/2021/08/4-things-to-know-about-the-future-of-media-and-entertainment/

2.?????https://seekingalpha.com/article/4571783-netflix-q4-subscriber-rebound-long-way-to-go

3.?????https://www.reuters.com/business/media-telecom/disney-cuts-streaming-losses-resurgent-parks-boost-results-2023-05-10/

4.?????https://www.statista.com/statistics/959360/ott-tv-video-revenue-africa-country/

5.?????https://www.statista.com/statistics/249628/pay-tv-revenue-in-sub-saharan-africa/