Kenya’s entertainment industry made more than $1.9B online

Kenya’s entertainment industry made more than Sh189 billion in revenue last year by selling its wares online though applications like Facebook, Viber and Whatsapp.

A report released by PriceWaterhouseCoopers say this is expected to rise to Sh347 billion in the next four years.

“Today’s media companies need to do three things to succeed: innovate around the product and user experience; develop seamless consumer relationships across distribution channels; and put mobile (and increasingly video) at the centre of the consumer’s experience,” said Vicki Myburgh, entertainment and media leader for PwC Southern Africa in a statement.

The report collects data from Kenya, South Africa and Nigeria, concentrating across 12 sectors that include internet, television, filmed entertainment, radio, recorded music, publishing, out-of-home advertising, video games, and sports.

RISING EARNINGS
It is not clear how much each sector earned in revenues. Nonetheless, the industry earnings as a cluster have been rising high backed by increased use of the internet. Apart from the internet, the study says the fastest growth will be seen in video games, business-to-business and filmed entertainment.

However, it is the internet that acts as a driver of revenues in video games and film, creating new revenue streams by making over-the-top (OTT)/streaming or social/casual gaming viable to more consumers and thereby cancelling out physical meetings.

Last year, PwC stated that the entertainment and media industry earned Sh150 billion ($1.7bn), all with the support of increased internet access.

In five years’ time, TV and radio alone are forecasted to contribute over Sh88 billion.

GROWTH AREAS
Video games and radio will experience growth rates at 9 per cent and 8.2 per cent respectively. This is termed as very fast growth.

“Video games has made the greatest transition to digital, largely due to the popularity of mobile gaming, but also because of the increased potential for digital distribution of console games,” adds Myburgh.

The slowest growing segment in the entertainment industry will be the music industry, according to the survey. As the internet usage grows, more people will use social media sites and applications.

Telecommunication firms foresaw the trend with Airtel in June calling for the regulation of companies offering free-call apps. The telco said the regulations would help stop revenue losses by mobile phone operators.

FACEBOOK OPENS OFFICE IN AFRICA
Facebook has since moved closer with its office in South Africa, targeting to tap more from key promising countries such as Nigeria and Kenya.

Part of the plan is to partner with telcos and benefit from the mobile money revenue in Kenya.

However, Safaricom, Airtel and Telkom Kenya all demand that Communications Authority of Kenya should put in place measures to regulate OTT service providers.

“We are happy with the data revolution that is taking place, but new players are riding on our infrastructure and investment, and yet they are not subject to the same taxes and regulation regimes as operators. We expect regulators to help,” said Airtel CEO ADil El Youssefi in an earlier statement.

Ms Myburgh advised telcos and traditional media to listen more to consumers.

“What they want is more flexibility, freedom and convenience in when, where and how they interact with their preferred content,” said Ms Myburgh.

TRADITIONAL MEDIA
Despite increased online advertising, Kenyans will still hold onto traditional media such as TV, radio and newspapers as the first choice when looking for advertisement, the survey states.

The Nigeria and South Africa also show the same trend as the Kenyan market, with the internet providing the core base for growth.

Nigeria’s entertainment and media market grew by 19.3 per cent in 2014 to reach over Sh418 billion this year. By 2019, the market will be more than twice as big.

As in South Africa whose entertainment growth was at Sh884 billion, double that of Nigeria, the internet will be the key driver of growth for the latter.

The study also states that music, magazines and newspapers, will show only moderate consumer growth, facing strong competition from the internet in the coming years.

DAILYNATION