Internet key to media and entertainment growth

Johannesburg - The internet is set to be a key growth driver in media and entertainment for the next four years.

By 2021, total media and entertainment revenue in South Africa is expected to reach R177.9 billion – up from R132.7 billion last year.

Internet-related growth will account for R27 billion of the expected increase in revenue of R45.2 billion.

Smartphones and tablets have become an indispensable part of the media and entertainment sector, pointing to apparent consumer preferences within this sector, which has become characterised by rapid advances in technology and ongoing disruptions to models.

This week, multinational auditing firm PwC released a report titled Entertainment and Media Outlook 2017-2021: An African Perspective.

Commenting on the report at the launch in Randburg in Gauteng, Vicki Myburgh, the head of entertainment and media for PwC Southern Africa, said: “It is clear that something fundamental has changed in the entertainment and media industry.

"Thriving in this new world of intense competition and continual disruption will be challenging. The opportunities are, however, immense.”

Speaking at the same event, MTN’s chief digital officer, Herman Singh, said the media space today was about content, distribution and engagement.

“Engagement is connected to advertising. When people engage, they spend a lot of time on a platform – for example, Facebook. This translates into opportunities for advertisers,” Singh said.

“Subsequently, advertising follows engagement, which is driven by content and distribution.”

Andile Khumalo, the managing director of radio station Power 98.7 and the CEO of media group MSG Afrika, also addressed the audience, saying media businesses could measure customer experience and engagement.

“It comes down to numbers, because you know when you are winning or losing based on the extent of your fair share of the market and advertising spend.

“We are all competing for consumers’ attention and to retain them. This means stealing the consumers from someone else by giving them what they want, even if they are unsure about it,” he said.

Chris Botha, group managing director of The Media Shop, pointed to the increased competition in the entertainment and media industry.

“Your competition is everybody. The internet has made the media world accessible to everybody. Therefore, content and differentiation will determine who the winners are going to be in this game,” Botha said.

The report found that disruptive technologies had become a gateway for the emergence of two new segments – virtual reality and e-sports.

PwC predicted that these two sectors would be the fastest growing, compounded annually at 72.6% for virtual reality and 39.6% for e-sports.

However, the report read, these segments were still new and, currently, their revenue lines remained the smallest in terms of absolute revenue numbers.

“Virtual reality and e-sports are fascinating segments in South Africa,” said Myburgh.

“For example, e-sports is now played at schools. There is a competitive environment and, for the first time in South Africa, R1 million in prize money was awarded.”

Another trend noted by PwC was the swift rise in streaming music in South Africa and internationally.

Myburgh said music was the real success story of South Africa last year and highlighted consumers’ reuptake of the medium.

“For the past few years, music had lost share and it did not have a future. Music consumption has been remodelled to streaming and has grown by 76% this past year.”

Magazines and newspaper revenues were set to continue their decline, according to the report.

Local newspaper revenue has been unpredictable. The market grew in 2013, declined in 2014 and bounced back marginally in 2015.

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