Nigeria’s Entertainment and Media industry is expected to rise from $4.46 billion in 2018 to $10.5 billion market by the end of 2023, as disclosed in PwC’s recent Entertainment & Media Outlook report.
The report, which was released in October 2019, disclosed that the market is dominated by internet revenue, as it presently contributes about 61% of the sector’s revenue, followed by Television and Video, which is expected to push towards $1 billion in revenue by 2023, after adding $172 million in five years.
- The report stated that while mobile internet access is now theoretically almost everywhere in Nigeria, in practice the quality and reliability of service is highly variable. It found that there are only 1.3 million high-speed mobile internet connections, compared with 65 million low-speed connections.
- All of the major telcos have offered 4G service since 2016, but it remains limited to certain areas of the country, though the network is steadily expanding. For instance, in May 2019, Airtel announced the extension of its 4G network to the cities of Enugu and Uyo.
- The 4G rollout has proved challenging for Telcos as well, and the commercial viability of the service in the nation is yet to be demonstrated. Smartphone usage has soared in recent years, with some 72 million active connections recorded by 2018, but most consumers use very low-cost devices like the N13,000 smartphone rolled out by Google and Japanese manufacturer, Freetel in 2017.
TV and Video
- The main contributor here is Pay-TV subscription revenue, which surpassed $500 million in 2018. StarTimes is the market leader in the pay-TV segment, but many subscribers take only entry-level packages, meaning that MultiChoice continues to produce the highest Average Revenue Per User (ARPU) because of the important sports content on its SuperSport channels.
- It noted that there is huge long-term potential for Over The Top (OTT) video once significant investment in infrastructure is made, but current internet limitations would see it struggle to make an impact over the forecast period. For instance, iROKOtv, which was launched in 2011 primarily to showcase Nollywood movies, stopped its streaming service in 2016 before it relaunched as a download service, as most of its activities now come through Wi-Fi, rather than over cellular networks.
It added that the presence of the Nigerian national team in the 2018 FIFA World Cup boosted viewing figures and opportunities for advertisers.
- Internet, Out-of-home (OOH), Radio, TV and Video are the four advertising segments in Nigeria, with TV accounting for 37% of the total in 2018, or $156 million of the total advertising revenue of $419 million. The proportion is expected to increase to 38% by 2023, as the newspaper is predicted to continue its long-term decline.
- TV market- there has been an emphasis on terrestrial channels, as advertisers seek to reach the largest possible audience. TV advertising remains the mass-market approach, as the digital transition initiative of the federal government is incomplete. If completed, the transition will provide more thematic channels and opportunities for targeted advertising, but Nigeria remains lagging behind the advertising levels reached in the West.
- While TV is expected to stand as the ad leader till 2023, in terms of net additions to revenue, its counterpart, internet ad, would add $60.7 million in absolute terms in 2023 against TV’s $60.2 million. The Google Partners programme, which was launched in September 2018, is expected to boost Internet ad, as it aims to develop awareness and expertise among businesses.
- The OOH is not left out among the revenue makers. The second-largest segment (in 2018), has several headways for future growth, as it is highly fragmented, typical of the pattern in less mature markets, with a very wide range of operators in all niches of the market. The report stated that the entry of JCDecaux (one of the largest global outdoor advertising firms) in 2017, signalled international confidence in growth prospects of the advertising segment in Nigeria.