Digital’s big 3 to rake it in

The entertainment streaming war in SA is likely to intensify this year with new players set to challenge the giants, including Netflix and Amazon Prime.

The MediaShop’s Louise Hefer says talk about a mandate of 30% local content for streaming services in SA will add another layer of complexity and she wonders how sustainable this will be for international players. One consequence, she says, might be a decrease in overall titles being available as these companies try to sustain their mandates instead of increasing them — which in turn affects the offering available to viewers.

In a 2022 forecast assessment, she says: "With viewers being spoilt for choice, it is now easier than ever to channel-hop between different service providers, whether that’s streaming or digital-only platforms like YouTube. Consumers are getting used to watching what they want, when they want, and will move on if providers do not provide that.

"This, in turn, will make it even more difficult to retain viewers on a long-term basis. 2022 will highlight the increase in movement of viewership between different service providers — with the determining factor being the content slate on offer. If your content slate is not competitive enough, viewers will move on."

The global growth and influence of streaming services is borne out by new numbers from the World Advertising Research Council (WARC) that reveal online video platforms such as YouTube and Amazon Prime Video were worth a combined $63.7bn to advertisers in 2021, up 41.6% from 2020.

The company says further growth, of 19.7% and 14.2%, is projected during 2022 and 2023 respectively, with YouTube leading the charge.

On a broader scale, new advertising spend forecasts for 100 markets worldwide, including SA, show that the global ad market has weathered the impact of Covid so far, and is on course to reach a value of $1-trillion in 2025. More than half of this money is paid to three companies: Alphabet (parent company of Google), Meta (Facebook) and Amazon.

WARC says close on 70% of advertising professionals are planning to increase spending on TikTok this year, while YouTube, Instagram and Google are also set to benefit from higher spend in 2022.

Locally, Colin Ramparsadh of The MediaShop says there is potential for customised advertising to go beyond its digital realms to TV. He says this type of customisation can work outside digital and migrate to platforms such as TV.

"Right now, DStv can sell its ads either by content on specific programmes, by genre, bouquet or by premium audiences. This is available via Catch Up and its set-top boxes.

"Geotargeting by postal code or location is the next step in the process, which will ultimately mean marketers will be able to compete with digital ads."

WARC says online audio (podcasts) is also set for high growth this year. Last year global advertising spend was up by just over 50%. In terms of legacy media, WARC says linear TV adspend will grow by just 3.3% this year but will remain larger than streaming services. Radio is set to grow by 3.5% this year.

In the magazine sector, investment gains for online titles were not enough to counteract print losses. The market was down by close on 7% last year and is expected to fall by a further 6% in 2022.