South Africans spend billions on entertainment and media each year, and the digital space is expected to see significant growth over the next several years.
According to PwC’s latest Africa Entertainment and Media Outlook, the steep cost-of-living crisis has forced South Africans to reevaluate their discretionary spending on entertainment and media (E&M) products.
Despite this, South Africa’s E&M market stabilised in 2022, and this growth is expected to beat the global average.
Growth in South Africa’s E&M dropped from 15.4% in 2021, when the market was rebounding following the pandemic, to 8.8% in 2022.
Total revenue is expected to grow from R176.7 billion in 2022 to R231.2 billion in 2027 at a compound growth annual rate (CAGR) of 5.5%.
The market is also expected to see rapid growth in over-the-top (OTT) streaming services and cinema.
South Africa is the largest OTT sector on the African continent and is expected to grow from R4.3 billion to R7.6 billion in 2027, while cinema is expected to increase from R1.1 billion to R1.9 billion over the same period.
However, PwC said that the largest revenue gains will be in the Internet access segment, as new users buy subscriptions to mobile and fixed broadband services and existing customers upgrade their packages.
The internet access category is expected to see a 6.8% CAGR from R86.1 billion in 2022 to R119.7 billion in 2027.
According to PwC, South Africa also leads the continent in video games and esports revenues, with the latter seeing revenue growth of 30% y/y in 2022.
Video games and esports revenues are expected to grow from R6.4 billion in 2022 to R9.5 billion in 2027.
“Much of the country’s gaming revenue stems from mobile gaming due to the prevalence of smartphones in South Africa. Some of the most popular mobile games include PUBG Mobile, Clash of Kings and Call of Duty Mobile,” PwC said.
PwC also noted that streaming subscription revenue in South Africa is set to rise at a 10.5% CAGR to R1.1 billion in 2027.
Unfortunately, for our print-reliant counterparts, newspapers, consumer magazines, and book segments will be the only category to see a decline over the period, as revenue will fall at a -2.1% CAGR from R8.7 billion in 2022 to R7.8 billion in 2027.
“According to a 2023 survey by the University of Oxford and the Reuters Institute, 90% of South Africans access news content online (including via social media), compared to just 30% who choose print,” PwC said.