South Africa’s R200 billion entertainment industry

South Africa’s entertainment and media (E&M) industry is set to grow to over R230 billion in the next few years. This is according to PwC’s Africa Entertainment and Media Outlook.

PwC said growth in South Africa’s E&M market stabilised to 8.8% in 2022, down from 15.4% in 2021 when the market rebounded after the end of the Covid-19 pandemic. 

However, growth continues to be healthy and will outpace the global average for every year to 2027. 

PwC estimates that the industry’s total revenue will increase from R176.7 billion in 2022 to R231.2 billion in 2027, a compound annual growth rate (CAGR) of 5.5%. 

“The market will see rapid growth in over-the-top and cinema, but the largest revenue gains will come from growth in the Internet access segment, as new users take out subscriptions to mobile and fixed broadband services, and existing customers upgrade their packages,” PwC said.

An OTT media service is offered directly to viewers via the Internet. South Africa has the largest OTT sector on the continent, generating R4.3 billion in 2022. 

The country’s growth in this segment in the coming years will be bolstered by fierce competition between global platforms. 

“African streaming platforms have tailored themselves to African viewers with local content to compete with services that boast an established global footprint.”

“A challenge for OTT companies looking to succeed in Africa will be ensuring their content is easily consumable through mobile devices, given how much more abundant smartphone ownership is.”

For example, PwC said OTT platforms must be optimised to ensure services consume less data while providing adequate viewing quality. 

Video currently constitutes the largest share of data consumption in South Africa, which aligns with global trends.

South Africa also leads the continent in video games and esports revenue as the industry skyrockets in 2022. In particular, esports soared, with revenue up 30% year-on-year.

Music streaming subscription revenue in South Africa is also set to rise at a 10.5% CAGR to reach R1.1 billion in 2027.

While many E&M segments will grow rapidly over the next few years, PwC said the print-reliant newspapers, consumer magazines and books segment would be the only category to decline. 

Revenue in these segments will fall at a -2.1% CAGR to 2027 as consumers increasingly look to digital alternatives. 

According to a 2023 survey by the University of Oxford and the Reuters Institute, 90% of South Africans access news content online, compared to just 30% who choose print.