South Africa’s biggest entertainment markets
Say goodbye to Blu-ray and hello to YouTube, as online media is set to be the world’s – and South Africa’s – biggest entertainment and media market by the end of the decade.
This is according the PwC Global Entertainment and Media Outlook 2015-2019 report, which details the projected growth for entertainment and media segments for the next few years.
According to PwC, South Africa’s entertainment and media industry 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%.
This growth will be fuelled by digital spend, as South Africa’s Internet access market continues to rise rapidly.
Here is a breakdown of the biggest global entertainment and media markets in the world – and how they will fare in the local economy, according to PwC.
Music
The music industry is in for a tough time, as revenue from recorded music is expected to decline through to 2019. However, the losses will be somewhat offset by increased revenue from live performances.
The overall music industry will see CAGR of 0.8% through to 2019, totaling around $47 billion.
Live shows will account for $30 billion (up from $26 billion in 2014), and recorded music will add over $17 billion (down from $19 billion in 2014).
In South Africa: growth will remain muted to hit R2.1 billion in 2019, up only slightly from R2.01 billion in 2014, with revenue from live music expected to grow at a CAGR of 7.9% in the next five years – reaching R1.5 billion in 2019, up from R1 billion in 2014.
Video Games
The global video game market will near the $100-billion mark, settling at $93.2 billion in value by 2019.
This represents a CAGR of 5.7%, while the market is expected to shift to digital and cloud services.
The current generation of console hardware is expected to peak in 2017 and 2018, but any decline will be offset by subscription fees to gaming services.
In South Africa: According to PwC, in 2014 the total video game market in South Africa was at R2.62 billion, which will increase to R3.61 billion by 2019. Social and casual gaming is expected to increase to R1.94 billion, making up the largest amount, followed by console gaming, which will account for R865 million.
| Gaming segment | 2014 (ZARm) | 2015 (ZARm) |
|---|---|---|
| Casual/Social gaming | 1 267 | 1 937 |
| Console gaming | 785 | 865 |
| PC gaming | 529 | 731 |
| Advertising | 38 | 77 |
| Total | 2 619 | 3 610 |
Films
Hollywood and other global film markets are expected to show healthy growth over the next few years to hit $104.6 billion by 2019.
Under half of this amount ($48.5 billion) will come from the box office.
Physical media is expected to continue its decline (with more brick and mortar stores expected to shut down), while electronic home media, such as streaming services, are expected to double.
In South Africa: box office revenues are steadily increasing at a CAGR of 3% to reach R972 million by the end of the forecast period.
Books
Books are not dead – and won’t be for a while. The total book publishing market will hit $128.34 billion in 2019.
The consumer book market is expected to struggle until digital becomes more prominent, but this will be offset by growth and domination from the educational book market.
Digital books are expected to show the biggest growth, accounting for 40% of total revenue by the end of the decade.
In South Africa: consumer revenue from books, magazines, and newspapers is expected to rise by R1.3 billion over the forecast period. According to PwC, Total book revenues will therefore increase from R3,828 million in 2014 to R3,967 million in 2019.
Pay-TV
Global pay-TV subscriptions are set to reach a market value of $243.8 billion by 2019.
There will be a big rise in the number of smartphones and tablets connecting to TV services, and more content outlets will become available – forcing service providers to shake up their business models.
In South Africa: combined revenue from TV subscriptions, advertising, and licence fees is projected to reach R40.9 billion by 2019.
Internet Access
The biggest disruptor across the entertainment and media segments is the Internet.
Internet access is proving to be a major revenue source across the globe. According to the outlook, Internet access and other media found online is projected to draw over $686.2 billion by 2019 – up from $449.5 billion in 2014.
Over the next few years, smartphone connections are expected to double, accounting for over half of all phones, while mobile Internet revenue will make up over 63% of the total value ($441.5 billion).
In South Africa: Internet access revenue will climb 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.
“Affordable Internet access will continue to digitally disrupt the market in novel and innovative ways,” said PwC Southern Africa Entertainment and Media Leader Vicky Myburgh.
“The ongoing spread of services to mobile networks, novel devices, and emerging markets will change how media and entertainment are served, consumed, and monetised in multiple ways.”
According to Myburgh, affordable Internet access will inhibit the revenue growth of various sectors as consumers use it to access free, ad-funded, and lower-priced subscription-based versions of new and existing media services.
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