Africa Entertainment Industry
Nothing soothes the African plains like heart-pumping beats and the melodious ethos of African instruments playing to cultural tunes intertwined with western influences of hip hop and RnB (Rhythm and Blues).
As Africa poses the world’s youngest population, the continent is not short of excitement. The region has plenty of singers, dancers, musicians and beatmakers, all hungry to produce the continent’s next hit. But it’s not just music that’s driving the continent’s entertainment industry.
The billion-dollar business of entertainment spans across, television, cinema, radio, video games, e-sports, print and online publishing, book publishing, business-to-business, music, out-of-home, and virtual reality.
Currently, only five countries are taking the lead in churning more revenue and putting talents out for the world to see as opposed to its other neighbours in Africa. Nigeria, South Africa, Ghana, Kenya and Tanzania have taken a lead in Africa, leaving much of the talent still un-harnessed.
Recently, international superstars such as Akon, and Beyoncé have seen the talent in Africa and respectively are taking a keen interest.
Akon, the American-Senegalese rapper took a 50% stake in the African music download service Musik Bi in 2017. The platform was Africa’s first home-grown legal download site for music, aimed at promoting African artists for their intellectual property
Similarly, Beyonce most recently released a documentary “Black is King” in August 2020, as a follow up to the 2019 remake of The Lion King. The storyline focuses on a young African king set to reclaim his lost throne. The aim is to encourage Africa to demonstrate its position in the world and not be stereotyped by negative images.
Both instances demonstrate that entertainment in Africa or African Entertainment is yet to take off, is attracting the likes of Hollywood and American musicians, and the little exposure it has, is still driving an international impact.
The old days where the West initiated and created the “Live Aid Concert” to raise funds for Africa are long-gone. Today, Africa is raising funds for itself, and Western entertainment executives are looking on.
While Africa’s entertainment industry poses outputs much lower than North America and Asia, the monetization within the sector demonstrates a massive opportunity for growth continent-wide.
According to Bizzcommunity the South African business-to-business (B2B) media and entertainment platform, consumer preferences are one of the key drivers of Africa’s entertainment economy. The personalized media interaction is vital to enable a sustainable enterprise.
“Consumers are using an array of connected devices to organise, curate and discover their own unique worlds of media. In response, companies are designing their offerings to revolve around personal preferences, using data and usage patterns to pitch their products, not at audiences of billions, but separately at billions of individuals. ” (Bizzcommunity)
Most recently in early September 2020, Mdundo, a music streaming service similar to Spotify (the music stream application) was granted trading access on the Nasdaq First North Exchange in Copenhagen.
The application currently has more than 5 million active users online and more than 20 million downloads. Its service is available in Tanzania, and Kenya (where its headquartered) and in Nigeria, Ghana and Uganda.
While deliberate actions such as implementing various institutional frameworks (laws governing intellectual property in Nigeria and South Africa), Africa’s growing entertainment industry is expanding.
As the world advances so is Africa. The entertainment industry has displayed significant changes necessary for growth. More importantly, the growth deserves to be told, hence—the five countries mentioned above are currently demonstrating their catalytic influences in Africa’s journey to be an entertainment leader.
Understanding The industry
PriceWaterCoopers (PwC)—through its global network of financial and audit outfits, undertook a thorough analysis of the industry in the region covered in their tenth edition titled Entertainment and Media Outlook:2019-2023 An African perspective.
First things first, by taking a snapshot on previous growth, the industry has recorded decent strides over the past two years.
In 2018, PwC reports indicate that South Africa garnered nearly $9 billion in total entertainment and media (E&M) revenue, with Nigeria following the lead with $4.4 billion. In East Africa, Kenya and Tanzania scored both approximately $1.8 billion and $598 million respectively.
Now, following the forecast of the report aided by graphs and figures the future of South Africa’s E&M is bright.
The report argues that by the end of the five-year forecast period, the present figures would have increased at an annual growth rate of 5.8 per cent.
At the world stage still, the report narrates that South Africa “comes close to the center of the global grouping of countries” even with the access to internet access consideration removed. This is partially due to a much-advanced economy for years, having many consumers already exposed to western influences.
Similarly, in Nigeria— Africa’s leading economy and well known for its eccentric music, and African-stories-driven films, the E&M sector present good tidings.
“Nigeria’s E&M market is dominated by Internet revenue, and therefore shows a similar growth path to that metric. Having reached US$4.5 billion in 2018, E&M revenue will rise at an annual growth rate of 19.3 per cent” the report says.
The latter is most likely dependent on the populous size of the country, as well as the popularity of Nigerian films via Nollywood and its music through the internationally recognized duo of P-Squared.
Essentially, Nigeria and South Africa eventually could stand to become a $10 billion market by 2023. Shockingly, the report graphs show how Nigeria’s E&M revenue keep on soaring and even doubling by (2.5 times) from 2018’s.
The Digitization of Entertainment
As Nigeria becomes one of the most vibrant digital take-up hubs in Africa so as entertainment sector becomes more palatable.
According to the report, more revenues were sourced from the internet services—which dominate, “but there is room for improvement in service” such as TV and video which are stressed to be true equalizers of real E&M revenue.
“The main contributor here is pay-TV subscription revenue, which surpassed US$500 million in 2018. StarTimes, is the subscription TV market leader in the pay-TV segment, but many subscribers take only entry-level packages, meaning MultiChoice continues to produce the highest ARPU because of the important sports content on its SuperSport channels” the report argues.
Kenya stands to see double-digit growth. The annual growth rate is forecasted to shoot at 10.3 per cent, estimating that entertainment production will hit nearly $3 billion in 2023.
Across East Africa, the industry has taken a sharp rise since 2014. in performance, in the past two years, Kenya saw its E&M market extend by 13 per cent year-on-year to $1.8 billion, as opposed to Nigeria’s 64 per cent increase during the same period.
This is partially due to internet accessibility (which is significantly standard compared to its counterparts) as the main factor in dictating the ability to access entertainment. This in turn obviously was the main driver of revenue generation.
In Ghana for instance, where internet penetration still stands relatively low the opportunities for growth still stand out.
Since 2014 Ghana E&M revenue has been dominated by mobile internet penetration. Over the course of the past 5 years, significant investments have been made, including modernization of network structures and services, which are pivotal in the consumption of entertainment for consumers.
More importantly, the TV and video section remains the potential to milk substantial revenue. The PWC report argues that “over two-thirds of Ghana’s TV industry is attributable to advertising revenue, with the subscription TV market extremely limited and struggling for growth”. It is the largest contributor in terms of non-access revenue.
The report goes on to indicate that “Ghana’s E&M industry is set for the fastest growth of any of the countries considered in this overview, forecast to rise at an annual growth rate of 19.8 per cent to reach nearly US$3 billion by 2023. This comes after the country’s E&M market rose 36.3 per cent year-on-year in 2018, from US$885 million to US$1.2 billion.”
Tanzania, in comparison to all the other entertainment hubs, is one of the smaller media corridors in East Africa, yet produces significant returns.
PwC indicates that country-wide revenue within Tanzania’s media arena, better known as Bongowood or Bongoland saw an E&M rise of nearly 17.2 per cent year-on-year, with a CAGR (annual growth rate) of 18.3 per cent, yielding an estimated $1.4. billion by 2023.
Tanzania home of the multimedia sensational Diamond Platnumz was recently listed as Youtube’s most-watched and popular artist in Africa, marking. Much of this is again attributed to internet penetration and the decreasing costs of mobile internet across the country. If trends continue the way they are, Bongoland stands to become East Africa’s leading entertainment destination, but much of the concern still remains on the regulatory authority and its over-regulation of the industry.
In a nutshell, PwC’s forecast of the media industry sees the addition of at least a total of $13.1 billion in revenue from the overviewed nations. This means, there are vital and essential processes to occur along the way to 2023, which could set Africa’s entertainment industry at a good pace. Much more is yet to be seen with other African nations jumping the entertainment bandwagon.