September 21, 2017//-Kenya’s entertainment and media ( E&M) industry reached worth US$2.1 billion in 2016, up 13.6% in 2015. Revenue is forecast to grow at an 8.5% compound annual growth rate (CAGR) over the next five years, hitting the US$3 billion mark in 2020, and totaling US$3.2 billion in 2021.
Internet access is the most established industry within the Kenyan market, boasting the largest revenues and one of the highest growth rates to 2021.
The Kenyan entertainment and media market was worth US$2.1 billion in 2016, up 13.6% on 2015. Revenue will grow at an 8.5% CAGR over the next five years, hitting the US$3.0 billion mark in 2020, and totalling US$3.2 billion in 2021.
This is according to PwC’s ‘Entertainment and media outlook: 2017 – 2021: An African perspective’ released today.
Internet access is the most established industry within the Kenyan market, boasting the largest revenues and one of the highest growth rates to 2021. It will also be the first subsegment in which revenues hit US$1.0 billion, which it will reach in 2020. Mobile Internet access is the main revenue driver, as smartphone adoption increases in popularity.
Over the forecast period, high-speed mobile Internet connections will rise at an impressive 84.9% CAGR, while the number of mobile Internet subscribers is set to more than double over the next five years, reaching 33 million in 2021.
In response to increased mobile Internet access, Malaysian video streaming service iFlix announced in June 2017 its plans to enter the Kenyan market. Following the lead of SVOD giants like Netflix and Amazon, iFlix hopes to capture a slice of the market, offering both local and international content to the Kenyan audience, at a significantly lower price than other subscription-based services.
iFlix will cost between US$2-US$4 a month and allow consumers to download content in low, medium or HD format. The rise of the smartphone in Kenya will also contribute to growth across other media sectors, with newspaper provider Nation Media Group developing a mobile-friendly app to encourage digital readership of its news content and the social/casual gaming market expected to rise at a 22.4% CAGR to 2021, as Kenyans gain access to mobile app stores and mobile data costs fall.
Radio advertising revenue will grow year on year to 2021
Total advertising revenue reached US$1.0 billion in 2016 and is set to grow at an 8.0% CAGR over the next five years, fuelled by Internet advertising’s CAGR of 13.6% over the forecast period. Prior to 2016, Kenya’s largest advertising market was radio. Considering its small economy, Kenya has the largest radio advertising market in the Middle East and Africa region, and the 14th-largest in the world.
By 2021, it will generate more radio advertising revenue than Italy, a country with a bigger population and an economy more than 20 times larger. According to analysts at Bizna Kenya, low costs and robust listenership are key pull factors to businesses looking to advertise on Kenyan stations. Due to the range of radio stations in the country, advertisers can reach key demographics, meaning targeted and more effective ad campaigns.
Internet advertising is one of the fastest-growing sectors of the market. By 2021, revenue will hit US$227 million, making it the thirdlargest advertising category in Kenya. International players have begun to rear their heads, with Swedish phone-call filtering firm Truecaller announcing in May 2017 that it would begin offering ad opportunities to local Kenyan companies on its mobile app.
Despite year-on-year growth beginning to slow by 2021, advertising revenue is set to increase as Kenya’s media industry continues to expand. There remain several small, but growing untapped areas, such as the cinema market, which will rise quickly, while the emergence of global corporations in the country will help to propel revenues higher still.
African Eye Report
