South African Entertainment and Media
South African Entertainment and Media Outlook: 2010-2014 includes of annual historical data for 2005 to 2009, as well as forecasts for 2010 to 2014, for a wide range of local media.
Despite the severe global economic crisis, South Africa’s entertainment and media industry’s total spending grew by 1.8% in 2009, in contrast to the 1.8% decline worldwide, according to the first edition of South African Entertainment and Media Outlook: 2010-2014, released by PriceWaterhouseCoopers on 14 October 2010.

 

Despite bucking the global trend, this growth was still far from the 8.5% growth of 2008, an indication of the recession’s bite.

The report includes of annual historical data for 2005 to 2009, as well as forecasts for 2010 to 2014, for a wide range of local media: internet, TV, filmed entertainment, radio, recorded music, consumer magazine publishing, and consumer and educational book publishing. It also includes newspaper publishing, business-to-business publishing, out of home advertising, video games and sports industries, contains some interesting trends.

Consumers worldwide are migrating unexpectedly fast towards the digital, says the report. However, in South Africa digital media are unlikely to dominate in the forecast period, despite growing at a considerable pace.

“Non-digital revenue streams are expected to be much higher and will still account for 69.1% of total SA spending in 2014,” the document says.

While advertising fell 14.3% in 2009, consumer and end-user spending countered this effect with a booming box office market, continued growth in TV subscription spending and a jump in broadband spending. The internet market was still in its development stage, despite a surge in the number of households using broadband, according the report.

“I am afraid that broadband is not happening in South Africa,” Gerdus van Eeden, MultiChoice chief technology officer, said at the launch of the report in Johannesburg. “South Africa is lagging behind. We see people digging out streets but that is mainly aimed at connecting offices, but almost nothing is happening in our homes, and I am worried about that.

“It will take a long time in South Africa because even what is happening is mostly skewed towards a low quality wireless. However, we don’t see any digital development as a threat to our business. I think we will adapt accordingly.”

Draftfcb Johannesburg’s Jerry Mpufane said part of MultiChoice’s success was that the SABC was failing to do what it was meant to do. “If the SABC was doing it properly, we would be having another conversation – a real one – right now.”

The PriceWaterhouseCoopers report also reveals that fewer than 10% of households had a broadband connection in 2009, but it forecasts that this number may quadruple over the next five years.

In 2009 there were more than 1.3-million mobile broadband users in South Africa, compared to 800 000 fixed broadband users. When including the 3.2-million dialup users, the total number of internet users was only 5.3-million, a clear sign that South Africa is not doing as good as it is supposed to be doing

Kagiso Media’s Omar Essack said there is a need to try new things to see if people will like them or not. “We are watching consumer behaviour, especially young people and our own children. If they don’t react, it means that we are not in their space, so we are left behind.”

According to the report, mobile broadband will be the fastest-growing technology over the next five years, with an expected increase of 50.7%, or 10.1-million users, by 2014. By 2014 72% of broadband users will access the internet via mobile devices and 63% of all internet users will access it on mobiles.

Video games enjoyed a 13.4% growth in 2009, second only to the internet, which witnessed a 29.8% increase in the same period. Sports revenue increased 5.8% in 2009.

New technology such as mobile broadcasting will see new competitors enter the market, generating an additional advertising stream projected to reach R15-million by 2014.

Public TV license fees are likely to increase by 0.9%, compounded annually from R1.02-billion in 2009 to R1.07-billion in 2014. Broadcast advertising will expand at a 9.6% compound annual rate during the next five years to R11.9-billion in 2014, from R7.5-billion in 2009.

“This is a journey,” Marcel Fenez, PriceWaterhouseCoopers global managing partner of entertainment and media, said, adding that local language content was essential.