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A new report by PricewaterhouseCoopers has said the Nigerian entertainment and media market revenue, which rose to $3.6 billion in 2016 would increase at a compound annual growth rate (CAGR) of 12.2 per cent to $6.4 billion in 2021.
PwC, which revealed this in its “Entertainment and media outlook: 2017 – 2021, An African perspective” obtained by THISDAY, noted that due to the depreciation of the Naira, Nigeria’s E & M revenue expressed in United States Dollars was somewhat depressed when compared with last year’s figures.
The report, which is the 8th annual edition, released this month, is an in-depth analysis of the trends shaping the entertainment and media industry in Nigeria, South Africa, Kenya, Ghana and Tanzania. It is a comprehensive source of analyses and five-year forecasts of consumer and advertising spending across five countries and 14 segments.
In terms of total E&M revenue, the PwC report rated Nigeria as one of the fastest-growing countries among those ones it considered. It, however, added that, “This figure must be treated with caution, as a huge proportion of that growth comes from Internet access revenue alone—specifically mobile Internet access revenue.”
“This in itself is an interesting side point, with Nigerians embracing dual-SIM phones in order to circumvent issues with network coverage.”
As such, the outlook on E & M explained that, out of the $2.8 billion that the Nigerian market would add between 2016 and 2021, only $452 million will not come from Internet access revenue, “dampening what seems like an optimistic picture for consumer and advertiser revenue growth.”
This implies that a whopping $2.348 billion in revenue would be generated from internet access within the projected period, representing 83.9 per cent of the total. “Industries such as the world renowned Nollywood, for instance, don’t generate that much measurable revenue for Nigerian E&M due to issues such as piracy hampering official cinema owners and film vendors.”
However, noting that, when internet access revenue was excluded from the figures, Nigeria’s CAGR dropped to a less stellar 5.4 per cent, which is behind the 7.7 per cent seen in Kenya, the report added that, there was still much to be positive about in the Nigerian market.
According to the outlook, “The combined elements of TV and video will add nearly US$200 million to 2021. Although the breadth of Internet coverage and speed of service is not yet sufficient to support meaningful Internet video revenue, pay-TV will do well over the forecast period. Growth was low in 2016 as providers focused on low-cost entry level packages designed to entice new customers. This has helped pay-TV households to rocket from 1.9 million in 2012 to 4.0 million in 2016.”
The latest PwC report expressed the belief that, once the emphasis shifts towards upselling households to more premium packages with wider ranges of content, HD channels and TV everywhere services, a 4.1 per cent CAGR can be expected. “In music, ringtones and ringbacks continue to make good running, thanks largely to their piracy-proof nature. And in video games, similarly, the social/casual model is making gamers of anybody with a smartphone, explaining rapid rises in this metric as smartphone connections rise exponentially.”
It explained: “TV is Nigeria’s largest advertising segment, with terrestrial dominant, but with multichannel rising at a double-digit CAGR to 2021 as advertisers chase the country’s increasingly large pay-TV base. Local content remains important and MultiChoice continues to add programming to its DStv and GOtv services. MultiChoice’s dedicated sports channel, SuperSport, has invested significantly in Nigerian content, particularly in football and basketball.”
Besides, the report also projected that, “A healthy proliferation of radio stations—Lagos State alone has 23—will also take radio advertising revenue to just shy of US$80 million in 2021, while the country’s rapid rate of urbanisation in particular spells good news for OOH (out-of-home media).”
“Internet advertising, though, is the most exciting growth area, with a CAGR of 19.5 per cent expected to propel the segment to US$157 million in 2021. Mobile Internet is seeing especially strong growth, and will overtake wired advertising by the end of the forecast period.
“In March 2017, Facebook began accepting payments for advertising space in naira. Previously, prices were displayed in naira, but payments were not accepted in the currency, meaning that extra currency conversion fees and blocked transactions were commonplace. Businesses can now pay for Facebook’s ad space using local debit cards, improving access to the social network for advertisers and local companies across Nigeria. This will only improve the transition of advertiser dollars to the segment, even if it may not spell ad revenue for the country’s content producers,” the report added.
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