A PricewaterhouseCoopers (PwC) report said digital advertising will account for 79.7 per cent of the industry’s total revenue by 2026 in Kenya, Nigeria and South Africa.
The latest Africa Entertainment and Media Outlook 2022 to 2026 says internet advertising will become the second largest segment in Africa’s top economies.
Within the markets, revenues in Kenya, South Africa, and Nigeria rebounded in 2021 as they recovered from the effects of the Covid-19 pandemic.
The report shows that Kenya has seen continued growth since 2017, with E&M revenue reaching new heights in 2021 (12.6% annual growth rate).
The vast entertainment and media ecosystem is growing more rapidly than the global economy. Increasingly, more people worldwide are spending more of their time, attention, and money on the complex and increasingly immersive entertainment and media experiences available to them, says PwC Africa entertainment and media leader Alinah Motaung.
“In essence, the industry is becoming more digital, more mobile, more pitched at media that attract the young, more evenly distributed around the globe, and more dependent on advertising in all its forms.”
Advertising, internet connectivity and consumption
Advertising, which was harder hit by the pandemic, experienced the largest rebound in 2021. From an advertising perspective, the internet advertising segment expects the largest gains in advertising revenue terms across the five-year forecast period to 2026.
This trend is seen across Kenya, South Africa, and Nigeria at a global level due to consumers and advertisers prioritising digital.
Connectivity in all markets is constrained by underdeveloped infrastructure, meaning that fixed broadband speed and quality are less reliable, and consumers have instead turned 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 revenue across all three markets. But this is from a relatively small base, meaning that revenue itself will remain comparatively low.
The next new thing
Looking ahead, we expect 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 around US$40bn to the economies of Sub-Saharan markets like 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. 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.