Africa’s entertainment and media industry: A positive story of resilience and expansion

Source: © 123rf 123rf Africa’s entertainment and media industry expected to outpace global growth in the next five years, driven by internet advertising and streaming services says PwC’s newly launched Africa Entertainment and Media Outlook 2024–2028 report

This is according to Nana Madikane, PwC Africa Technology, Media and Telecommunications leader and PwC’s newly launched Africa Entertainment and Media Outlook 2024–2028 report.

“As internet access expands, businesses will need to focus on digital transformation, leveraging social media and mobile platforms to engage Africa’s young demographic with personalised, data-driven advertising.

“This digital shift will also boost content production in OTT and music, with an emphasis on localisation and cultural representation to attract both local and global audiences,” says Madikane.

The growing interest from international players underscores Africa’s potential, while the wider adoption of AI tools will enhance content production, delivery and marketing, transforming the global E&M sector and impacting Africa significantly.

Latest trends and insights

This is against a backdrop of global macroeconomic instability.

Despite this the Entertainment & Media (E&M) markets across South Africa, Nigeria and Kenya are showing resilience, as all three leading African markets seeing revenue growth ahead of the global average (3.9% compound annual growth rate through 2028).

This is a key highlight emerging from the report, which, under the theme Resilience and reinvention provides an in-depth look at the drivers and inhibitors of E&M sector growth across the continent, and delves into the latest trends and insights that are set to shape the market over the next five years.

Key market highlights

South Africa

South Africa has the most well-established E&M market, compared to Nigeria and Kenya. It will therefore see the slowest growth over the forecast period, at an overall projected compound annual growth rate (CAGR) of 4.2% through 2028.

Growth is expected across most segments other than print media, with over-the-top (OTT) streaming services and internet advertising expected to see some of the highest growth rates.

This will be supported by stable internet connectivity and 5G adoption. Video games and esports remain a segment to watch, promising strong future growth.

Nigeria

The West-African country has cemented itself as one of the fastest-growing E&M markets globally, with an 8.6% CAGR.The fastest-growing E&M segments through 2028 in Nigeria will include internet advertising, video games and esports, OTT and music, radio and podcasts.

Internet advertising revenue is expected to more than double between 2023 and 2028.

Kenya

Despite being the smallest of the three markets in Africa, Kenya’s E&M industry is expected to grow at a 5.2% CAGR for the forecast period. Internet advertising and OTT are expected to lead the way, contributing to the fastest growing internet advertising market in the world at a CAGR of 17.4% through 2028.

Alinah Motaung, PwC Africa Entertainment and Media leader, says: “Over the next five years, E&M revenue is expected to rise ahead of the global average of a 3.9% CAGR in all three markets.

• E&M revenue in South Africa is projected to increase from R295.3bn ($16.1bn) to R363.2bn ($19.8bn).

• In Nigeria, the market value is projected to grow from $9.0bn in 2023 to $13.6bn in 2028.

• In East Africa, revenue is projected to reach $4.8bn in Kenya at the end of the forecast period, up from $3.8bn in 2023.

This tells a positive story—not only of resilience but of African markets that are expanding their offerings and capitalising on post-Covid economic activity,” says Motaung.

Key segment highlights

“While it is expected that some E&M segments will experience varied rates of growth, the overall industry across Africa is poised for growth,” says Charles Stuart, PwC South Africa Entertainment and Media partner.

“This growth will be driven by technological advancements, improved connectivity and increasing digital engagement.”

He says South Africa will remain the regional market leader in terms of scale, but Nigeria and Kenya will see faster growth, aided by young and growing populations and broader economic development.Notable growth and advancements have been noted across a few key E&M segments, and are as follows:

Consumer spending such as live events, gaming and OTT

Live music thrived across Africa, with South Africa hosting globally renowned artists including Imagine Dragons, Sting, Train and Take That as well as the continent’s first World New Music Days.

Nigeria and Kenya also surpassed pre-Covid ticket sales, while South Africa’s 2024 Calabash festival featured Maroon 5 and Keane.

On the cinema front, South Africa saw a 33.6% rise in box office revenue, dominated by Hollywood hits, with domestic films making minimal impact.

Despite this increase, the sector has been facing a challenging few years and is only predicted to recover to pre-Covid levels of revenue by 2027.

On the gaming front, South Africa is leading Africa’s video games and esports market, with mobile gaming dominating due to limited access to and affordability of consoles and PCs.

Recent efforts in South Africa, such as Carry1st’s partnership with Riot Games to launch local Valorant servers and player engagement campaigns, aim to bolster the PC gaming scene.

Nigeria is enhancing its esports structure with support from bodies like the Nigerian eSports Federation and platforms like Gamr.

Uniquely, Kenya remains the only African market in which revenue from traditional gaming exceeds social/casual gaming. Improving connectivity and increasing smartphone accessibility will see social/casual gaming close the gap through to 2028.

Despite challenging market conditions the OTT market in Africa is still growing with significant investments in infrastructure and content.

The number of OTT subscriptions is projected to increase despite recent subscription price increases and the removal of free subscription tiers.

South Africa is set to add almost 1.6 million OTT subscribers by the end of the forecast period. The OTT segment is forecast to grow at an 8.5% CAGR through 2028 in South Africa,10.5% CAGR for Nigeria and 10.9% CAGR for Kenya.

Rapid growth in internet advertising

Across the industry, advertising is assuming an ever more important role, with the internet becoming the largest segment from a spend perspective.

“Internet advertising is experiencing rapid global growth, and in Nigeria and Kenya, we are seeing exceptionally high rates due to increasing internet penetration and digital platform adoption,” Stuart says.

“This trend is expected to drive significant growth in the E&M industry, influenced by AI and retail search.”

At a global level, the Internet advertising segment has accounted for the majority of ad spend for several years, currently accounting for 68.0% of total revenue.

Both South Africa and Nigeria’s advertising sectors have also experienced this tipping point in recent years, as Covid-19 accelerated the development of the industry in these markets.

Kenya, however, lagbehind s the global trend, with its advertising sector still featuring almost equivalent spend on the combination of radio and broadcast TV.

GenAI

The rapid growth of GenAI is poised to impact various industries globally, presenting both opportunities and concerns, particularly regarding job markets and ethical considerations.

GenAI’s capabilities, such as converting ideas into images, stories, or scripts, and simplifying production processes with text-to-video or text-to-game models, are set to disrupt the E&M industry. AI enhances content recommendation, user analytics, network optimisation and customer support.

Notable developments include Lionsgate’s partnership with Runway to train its genAI models and the African Union’s endorsement of a Continental AI Strategy.

Additionally, Meta’s AI chatbot trials in African markets highlight the region’s growing engagement with AI technologies.

Mobile first connectivity

Africa’s E&M growth is primarily driven by mobile services due to low fixed broadband penetration, with 4G and 5G network expansion being crucial. Mobile subscriptions are far outpacing fixed broadband.

In South Africa and Kenya we expect to see 4G overtake 3G by the end of 2024, and Nigeria by 2026.

This places Africa a generation behind the global trend, where 5G will surpass 4G by 2027. Video content, particularly social video on platforms like TikTok and Instagram, dominates data consumption in South Africa, while games are also significant in Nigeria.