Africa Special 2015 - Page 20

overview061115_o 06/11/2015 10:29 Page 2 from the Internet. The music market was worth R2.01 billion in 2014, compared to R2.08 billion in 2013. Annual revenue is forecast to grow marginally by a CAGR of 1.3% over the next five years to remain relatively flat at R2.1 billion in 2019. Television remains a highly significant contributor to consumer spending, with combined revenues from TV subscriptions, advertising and licence fees projected to reach R40.9 billion by 2019. The report also shows that one consistent trend – and not just in South Africa, but globally – is the rise in overall consumer spending through to 2019 on video-based content and services, against far flatter prospects for spending on primarily text-based content and services. If consumer revenue from TV subscriptions and licence fees is aggregated with that from video games, around R4.5 billion will be added between 2014 and 2019. In contrast, consumer revenue from books, magazines and newspapers is expected to rise by just R1.3 billion over the entire forecast period. Alongside video providers, a further thriving source of revenue over the coming five years will be live events. Revenue from live music is expected to grow at a CAGR of 7.9% in the next five years, reaching R1.5 billion in 2019, up from R1 billion in 2014. Box office revenues are also steadily increasing at a CAGR of 3% to reach R972 million by the end of the forecast period. The appeal of live entertainment has also had a positive effect on the related advertising revenues. South African cinema advertising revenue is also rising at a CAGR of 6.7% and will be worth an estimated R884 million in 2019. “It is clear that consumers value – and are willing to pay a premium for – real-life Pay-TV in 21% of East African TV households The five countries of the East African Community (EAC) had a total population of 146.89 million at the end of 2014, with 33.61 million households and a TV household penetration rate of 23%, according to research firm Dataxis. Kenya is the most developed market in the region with 12.04 million households and a TV household penetration rate of 32%. Uganda has 7.35 million 20 Africa Briefing physical entertainment experiences, and these in turn are the types of consumers that advertisers wish to target,” adds Myburgh. The report shows that South Africa’s total entertainment and media advertising revenue is expected to rise by 5.6% from R39.7 billion in 2014 to R52.1 billion in 2019. TV advertising is by far the largest contributor to total advertising revenues, followed by newspaper advertising: however, their combined 52% share of total advertising in 2014 will fall slightly to 51% in 2019. Despite the strong projections for advertising, its share of the entertainment and media mix is predicted to decrease by 2019 as consumer spending takes an ever larger part of the pie; from 35% in 2014, advertising will account for just 30% of spending in 2019. “Affordable Internet access will continue to digitally disrupt the market in novel and innovative ways. The ongoing spread of services to mobile networks, novel devices and emerging markets will change how media and entertainment are served, consumed and monetised in multiple ways. Affordable Internet access will also inhibit the revenue growth of various sectors as consumers use it to access free, ad-funded and lower-priced subscription-based versions of new and existing media services,” says Myburgh. Nigeria Nigeria’s entertainment and media market grew by 19.3% in 2014 to reach US$4 billion. By 2019, the market will be more than twice as big, with an estimated total revenue of US$8.1 billion. As in South Africa, the Internet will be the key driver of growth for Nigeria. Television, comprising revenue from TV advertising and subscriptions, is the other main driver. households and a TV household penetration rate of 25%, followed by Tanzania with 9.8 million households and a TV household penetration rate of 17%. The firm’s Pay-TV/ FTA Broadcasting in East African Community report highlights that pay-TV services accounted for approximately 1.61 million households in 2014, meaning that free-toair (FTA) broadcasting is still the primary access method in over 79% of TV households. Tanzania had the largest payTV base in the region with 592,700 users, accounting Excluding Internet access, television, filmed entertainment and video games are the areas where Nigerian consumers are expected to spend the most over the next five years. Consumer spend on video games and music is set to see the sharpest rise in forecast CAGRs at 14.3% and 11.4%, respectively. Piracy continues to remain a problem [