Entertainment and media revenue across South Africa, Nigeria and Kenya rebounded strongly in 2021 as all three markets, like the rest of the world, recovered from the effects of the Covid-19 pandemic, the latest Africa Entertainment and Media Outlook 2022 to 2026 shows.

South Africa’s entertainment and media market exceeded the 2019 pre-Covid levels, with a total industry spend of R163-billion, representing a 15.4% yearly growth in 2021, according to the report, which was compiled by PwC Africa.

While the 2021 yearly growth rates for the entertainment and media market in Nigeria remained below pre-Covid levels, a significant recovery is expected as the industry’s revenue is predicted to more than double in the period to 2026.

Kenya, which has seen continued growth since 2017, reported entertainment and media revenue “reaching new heights” in 2021 with a 12.6% yearly growth rate.

Overall, the vast entertainment and media ecosystem is growing more rapidly than the global economy as a whole, and increasingly more people around the world are spending more of their time, attention and money on the complex and increasingly immersive entertainment and media experiences that are 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.”

The latest analysis of the industry’s performance in key African economies reveals that a more positive trajectory is in sight for the entertainment and media industry, which is a considerable economic driver in many African countries.

“Industries that were more severely impacted in 2020, such as live music and business-to-business trade shows, made strong comebacks – although the related revenue remained below prepandemic levels – and sectors such as video games and over-the-top (OTT) video rose to new heights after thriving under lockdown conditions,” the report says.

While subsectors such as video games and OTT video thrived under lockdown conditions, other sectors proved to be largely “pandemic-proof”, with podcast advertising, albeit off a low base, showing resilient revenue growth of 30.4% in 2020 in South Africa and 41.8% in Nigeria.

“Podcast advertising is also a rapidly increasing sector, accounting for R137-million of the wider audio landscape in South Africa, with music, radio and podcast revenue collectively totaling R5.5-billion in 2021,” the report states.

The Africa Entertainment and Media Outlook 2022 to 2026 shows further predictions that OTT video streaming revenue will increase rapidly over the next five years, with revenue growth to 2026 expected to outpace increases in television (TV) subscription revenue across all three markets in South Africa, Nigeria and Kenya.

However, the revenue itself will remain comparatively low as it increases from a relatively small base, the report notes, pointing out that, in Kenya, OTT revenue will total just $8.9-million in 2026, whereas TV subscription revenue will total $420-million.

“A similar story can be seen across Nigeria and South Africa, as traditional pay-TV packages command a higher average revenue per user than OTT services and do not require reliable Internet access, unlike OTT.”

While cinema’s post-Covid-19 recovery is well under way, with box office revenue in South Africa set to surpass 2019 levels in 2023, when it will reach R1.3-billion, 79.7% of entertainment and media revenue gained in South Africa in the period to 2026 is expected to emerge from Internet advertising and Internet access.

In Nigeria, music streaming will be the fastest-rising revenue component across the country’s music market by 2026. Over the next five years, digital music streaming revenue will increase at a 23.7% compound annual growth rate.

However, some of the sectors that achieved significant growth during the Covid-19 pandemic might not be able to sustain that growth, while others are expected to continue to build from their higher bases.

“Some formerly niche sectors, such as gaming, will barrel their way into prominence,” the report says, noting how the young, technology-savvy population within the continent is driving video game growth, mostly through mobile devices, with 40% of South Africa’s population playing games, 23% in Nigeria and 22% in Kenya.

Other formerly dominant sectors, such as traditional TV, newspapers and consumer magazines, are at risk of seeing their positions erode.

The PwC outlook also highlights the continued rapid growth of data consumption, with South Africa and Nigeria experiencing faster growth in 2021 than the global average.

Data is consumed mostly through mobile phones, ahead of the portable devices category, which includes laptops and tablets, and the other devices category, which counts data consumed through devices such as smart TVs and games consoles.

“Connectivity in all markets is constrained by underdeveloped infrastructure, meaning that the speed and quality of fixed broadband is less reliable, and consumers have instead turned to cheaper mobile packages,” explains PwC South Africa entertainment and media partner Charles Stuart.

The hard-hit advertising sector experienced the largest rebound in 2021, PwC adds.

“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. This is a trend seen across South Africa, Nigeria and Kenya, as well as at a global level, and is due to consumers and advertisers prioritising digital,” says PwC South Africa entertainment and media partner Elenor Jensen.