Growing spend on internet access is aiding SA’s media and entertainment industry
Internet access spend contributed to the growth in SA’s entertainment and media industry.
During 2015 and 2016 the entertainment and media sector grew by 10.7%‚ owing to internet access spend.
According to PwC’s entertainment and media outlook for 2017–21, SA’s entertainment and media industry forecasts total revenue to reach R177.9bn by 2021‚ up from R132.7bn in 2016‚ with internet access accounting for R27bn or 60% of the increase.
The survey provides an in-depth analysis of the trends shaping the entertainment and media industry in SA‚ Nigeria‚ Kenya‚ Ghana and Tanzania.
It projects growth of mobile internet penetration from 52.3% in 2016 to 77.8% in 2021.
"Over the next five years there will be 100-million mobile internet subscribers in SA‚ Nigeria‚ Kenya‚ Ghana and Tanzania‚" said Vicky Myburgh‚ PwC SA entertainment and media leader.
Digital revenue is also the source of the large majority of growth‚ says the report.
Internet advertising in SA continues to grow rapidly‚ with the total online advertising spend growing by 16.5% in 2016‚ reaching R4.4bn. By 2021 it will increase by R8.1bn.
"By 2021, of the total internet access‚ 90% would be mobile‚" she said.
Myburgh said while they had seen a high growth rate in virtual reality and video games‚ they were smaller in absolute rand value.
Among the nondigital segments‚ magazines and newspapers were set to decline. Cinema remains popular and live experience is still an attractive evening’s entertainment‚ she said.
"Advertising makes up 37% of total cinema spend in SA, which is way above any other country globally."
Box office and cinema advertising is forecast to reach R2.2bn in 2021‚ up from R1.9bn in 2016.
Trends are predominantly upward despite a forecast decline in box office in 2017‚ down from a record high of R1.2bn in 2016, to R1.1bn in 2017.
The report says one of the reasons for the slight dip was a reduction in the number of films released. Local film releases were down by nearly a third in the first half of 2017 compared to the same period of 2016.
"The South African film sector‚ however‚ risks being undermined by the political and economic issues in the country as a whole. The travails of the national broadcaster and the problems reported by some producers in securing prompt payment of Department of Trade and Industry incentives have created uncertainty‚" said the report.
With SA’s incentives‚ studio facilities‚ diverse locations and soft currency‚ the country has a chance to establish itself as a leading destination for international production.
"Furthermore‚ it has been calculated that the black middle class has more than trebled in size over the last decade. As affluence‚ access to credit and education levels have risen over this period‚ so has disposable income. With more screens opening to cater for this demand‚ cinema going will continue to grow."
Myburgh said music streaming had grown by 76%.
"It is a saviour to the music industry in SA. When compared to previous years‚ music was declining. Now it has seen growth driven by streaming and live music‚" she said.
Myburgh said the key driver was getting the consumer experience right.