PwC Report:Kenya’s total entertainment and media industry value to surpass $3 billion mark by 2019

Kenya’s total entertainment and media industry was valued at $1.8 billion in 2014, up 13.3 per cent from 2013, when it stood at $1.6 billion.The market is expected to surpass the $3 billion mark in 2019 to reach $3.3 billion.

This is according to a new report from PwC titled Entertainment and media outlook: 2015 – 2019 (South Africa – Nigeria-Kenya).

The report also revealed that in Kenya, the Internet is expected to be the largest driver of growth, followed by television and radio. TV advertising will overtake radio in 2016, and Internet advertising will see the fastest growth rate at a CAGR of 16.8 per cent. Traditional mediums such as TV, radio and newspapers will continue to be the first choice for most Kenyan advertisers in the foreseeable future.

Kenya’s total entertainment and media industry was valued at $1.8 billion in 2014, up 13.3 per cent from 2013, when it stood at $1.6 billion. The market is expected to surpass the $3 billion mark in 2019 to reach $3.3 billion.

“Today’s media companies need to do three things to succeed: innovate around the product and user experience; develop seamless consumer relationships across distribution channels; and put mobile (and increasingly video) at the centre of the consumer’s experience,” said PwC Southern Africa entertainment and media leader Vicki Myburgh.

The Outlook presents annual historical data for 2010–2014 and provides annual forecasts for 2015–2019 in 11 entertainment and media segments for South Africa, Nigeria and Kenya: the Internet, television, filmed entertainment, video games, business-to-business publishing, recorded music, newspaper publishing, magazine publishing, book publishing, out-of-home advertising and radio.

Aside from the Internet, the Outlook predicts that the fastest growth will be seen in video games, business-to-business and filmed entertainment. “But it is Internet access itself that is acting as a driver of revenues in video games and film, creating new revenue streams by making over-the-top (OTT)/streaming or social/casual gaming viable to more consumers and thereby cancelling out physical falls,” added Myburgh.

Music, magazines and newspapers, which will show only moderate consumer growth, are three segments that face strong competition from the Internet.

Nigeria’s entertainment and media market grew by 19.3 per cent in 2014 to reach $4 billion. By 2019, the market will be more than twice as big, with an estimated total revenue of $8.1 billion. As in South Africa, the Internet will be the key driver of growth for Nigeria. Television, comprising revenue from TV advertising and subscriptions, is the other main driver.

Excluding Internet access, television, filmed entertainment and video games are the areas where Nigerian consumers are expected to spend the most over the next five years.

Consumer spend on video games and music is set to see the sharpest rise in forecast CAGRs at 14.3 per cent and 11.4 per cent, respectively. Piracy continues to remain a problem in Nigeria, limiting growth across several entertainment and media sectors.

South Africa’s entertainment and media industry on the other hand is expected to grow from R112.7 billion in 2014 to R176.3 billion in 2019, at a compound annual growth rate (CAGR) of 9.4 per cent. Digital spend is expected to fuel the overall growth. South Africa’s Internet access market will rise rapidly from R32.5 billion in 2014 to R76.2 billion in 2019, far ahead of any other consumer spend category, making it the largest contributor to South Africa’s total entertainment and media revenues.