Entertainment & media outlook: an African perspective 2018-2022 - www.pwc.co.za/outlook
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Entertainment & media
outlook: an African
perspective
2018–2022
www.pwc.co.za/outlook
www.pwc.co.za/outlook
Consumer/end-user & 5 year historic &
5 Countries 14 segments
advertising spending 5 year forecast
data
Access Read Watch Listen Play
Internet access Books Cinema Music eSports
Apps Podcast
Data Television
B2B Radio Video games
consumption and video
Virtual
Magazines reality
Newspapers
OOH
E&M Outlook, 2018 - 2022
An African perspective
Perspectives: 2018 Outlook report summary
Trending now: convergence, connections and trust
Global Entertainment & Media Outlook
PwC 3
Perspectives report
So what’s trending now? Convergence, connections and trust
Global Entertainment & Media Outlook perspectives
• The media system is experiencing a third wave of
convergence. Call it Convergence 3.0. Companies
that hail from different starting points are aiming at
business models that revolve around comprehensive
direct-to-consumer relationships
• As they transform, E&M players are building up and
leveraging their connections with users, partners
and other stakeholders to develop new revenue
streams
• The growing power of technology and importance of
data is pushing trust to an even more central focus.
Strong capabilities to build trust with users, improve
value exchange and drive transparency while
ensuring safeguards and protection are vital
differentiators for E&M businesses
4
E&M Outlook, 2018 - 2022
An
AnAfrican
Africanperspective
perspective
Perspectives report
Convergence 3.0: Strategic efforts from participants of
every size and geography give rise to supercompetitors
Four types of convergence Convergence gives rise to supercompetitors
Media convergence • Examples of supercompetitors: Alibaba, Amazon,
Apple, Disney, Facebook, Google, Tencent, etc.
• A handful of global players that converge
towards similar business models will….
Access convergence
• …unite content, commerce, advertising,
communications and deep financial resources
under a single corporate roof
Business model
convergence • Each will try to secure exclusive control of every
aspect of its own customer relationships,
consumption and activity
Geographic
convergence
7
E&M Outlook, 2018 - 2022
An African perspective
Perspectives report
Trust: Trust will be a vital determinant of the sector’s ability
to forge connections and succeed in an age of convergence
Five vital dimensions of trust
Is your content Is your audience Are you taking Are your Is your company
trustworthy? who you say it proper care of investments good for
is? the data? paying off? society?
Advertisers are Media and academic E&M companies are Direct measurement The sheer size,
raising questions reports have assuming more of audience reach and utility of
about the quality, suggested that responsibility for engagement – today's media
safety and many social media protecting customer whether an agency platforms cause
appropriateness of accounts are bots or information- what is delivering the them to be
the content they have they like, look at, promised audience evaluated on their
advertise against misrepresentative their interests, to a client – has not contributions to
information profiles, financial been sufficiently society
information, etc. answered
6
E&M Outlook, 2018 - 2022
An African perspective
Overview: E&M summary and macro trends
Global Entertainment & Media Outlook
PwC 7
E&M summary and macro trends
The mobile story continues…
6.5% 21.5% 11.6% 14.2% 18.3%
CAGR
R177bn
$9.9bn
$2.9bn
$1.5bn
$1.2bn
Mobile
Internet
penetration
8
E&M Outlook, 2018 - 2022
An African perspectiveE&M summary and macro trends
Looking across territories, there are relatively few markets
that are both large and fast growing
Quadrant of total E&M revenue (excluding Internet access) Key takeaways
1,000 • India and Indonesia are the
Total E&M revenue 2022 (US$bn)
595
fastest growing markets
244
• No market in Western Europe or
75
100 North America will exceed 3.0%
41
35
27 42 CAGR growth through 2022
31 23
17 19 • The distribution of markets is
9 8
108
8 indicative of the increasing
0% 2% 3
4% 3 6% 8% 10% 12% difficulty of finding lucrative
investment opportunities in the
2 2
maturing global media market
1 1 1
0
• The challenge in emerging
0 markets remains monetizing the
content that the access is
0 delivering
CAGR 2017-22 (%)
The effect of Internet access revenue is more apparent in the fastest
growing E&M territories
9
E&M Outlook, 2018 - 2022
An African perspectiveE&M summary and macro trends
Finally, music and box office revenue are examples of the
dizzying array of divergences at the segment and territory levels
Recorded music select sub-segments revenue Box office
CAGR 2017-2022 Year over year growth 2016-17
-24% Austr... -5%
Digital download
-18%
US -2%
-10%
Physical
-34% Fr -1%
-6%
Ringtones/ringbacks South Af... 2%
-27%
18% C 22%
Streaming
28%
Gl 4%
-60% -40% -20% 0% 20% 40%
South Africa Global -7% -2% 3% 8% 13% 18% 23%
• Recorded music is projected to rise at a robust • Global box office revenue rose 4.3% year-on-
6.1% CAGR globally and streaming at 18.2% year in 2017, but fell in several markets
CAGR, but three of its sub-component will see • South Africa managed to reflect marginal
significant declines growth in 2017, which from a Hollywood
• Overall growth is driven by significant perspective, was far from a vintage year for
increase in streaming revenue releases
10
E&M Outlook, 2018 - 2022
An African perspectiveSegment review: Spotlight on South Africa
Key insights on selected segments
Global Entertainment & Media Outlook
PwC 11Segment overview: South Africa
The South African E&M industry is growing at a pace close to
its historical rates - even amid significant disruption….
South African E&M revenue and nominal growth forecast for next 5 years
R e v e n u e (R b illio n s )
+6.5%
200,000
180,000
160,000
140,000
120,000
100,000
168 462 177 523
80,000 158 976
139 211 149 112
60,000 121 073 129 361
110 881
92 430 98 298
40,000
20,000
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Historical Forecast
… and an array of different trends at the segment levels, an
accumulation of near-infinite micro stories
Note: All figures are reported in nominal terms reflecting actual spending transactions and therefore
include the effects of inflation
12
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: South Africa
The South African E&M market topped R129 billion in 2017
with Internet access dominating revenue share
2017 E&M market share by segment (%): Global, South Africa
Key takeaways
Books • Internet access will grow at
Magazines 10.7% CAGR, adding 11
Newspaper million new Internet
Radio subscribers over next 5 years
Music
• Fastest growth in the play
Traditional TV and home video
space
Cinema
E-sports CAGR 29% • Traditional TV and home
Video games CAGR 15% video will experience
VR CAGR 55% moderate growth as OTT
Internet advertising video continues to
TV advertising supplement vs replace
OOH
• Internet advertising at a
B2B
Internet access
CAGR of 13% will emerge as
South Africa
0% 5% 10% 15% 20% 25% 30% 35% 40%
the largest advertising
Global segment in 2022
13
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: South Africa
And final pieces fall into place for a mobile-first world, with
the symbolic tipping point occurring in 2017
South Africa fixed broadband vs. smartphone data consumption (GB millions)
Fixed broadband 3,500
2017--22 2017--22
data consumption CAGR CAGR
3,000
22.5% 40.4%
2,500
2,000
Smartphone data
consumption 1,500
Smartphone
overtakes fixed
data consumption 1,000
500
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Fixed broadband data consumption Smartphone data consumption
In 2017, data consumption through smartphones overtook fixed
broadband data consumption
14
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: South Africa
Smartphones the device of choice…and necessity…
15
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: South Africa
Digital revenue will continue to make up more and more of
the industry’s income, moving past 50% in 2020
South Africa digital revenue as % of total revenue
2021 2022
2020 54% 56%
2019
2018
52%
49.5%
2017 47%
2016 45%
2015 41%
37%
2014
2013 32%
30%
Digital % of total is
accelerating vs. last
year’s forecasts
SA digital revenue % (historic) SA digital revenue (projected data)
16
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: South Africa
Digital driving towards domination
17
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: music
Music revenue of R2.3 billion in 2017 is projected to grow at
7.7% CAGR to reach R3.3 billion
18
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: cinema
Cinema revenue of R1.8 billion in 2017 is projected to grow at
3.9% CAGR to reach R2.1 billion
20.8 19.9 21m 19
E&M Outlook, 2018 - 2022
An African perspective
m mSegment overview: traditional TV and home video
TV revenue of R32.2 billion in 2017 is projected to grow at
4.8% CAGR to reach R40.8 billion
20
E&M Outlook, 2018 - 2022
An African perspectiveSegment overview: Internet advertising
Internet advertising’s 13.0% CAGR will see it surpass TV
advertising spend in 2022
21
E&M Outlook, 2018 - 2022
An African perspectiveConvergence 3.0
What does it take to succeed?
Global Entertainment & Media Outlook
PwC 22Perspectives: 2018 Outlook report summary
Trending now: convergence, connections and trust
Questions?
www.pwc.co.za/outlook Global Entertainment & Media Outlook
PwC 23You can also read
