South Africa’s streaming boom

South Africa’s entertainment and media sector is expected to boom over the next few years, largely driven by streaming services and internet advertising.

PwC’s most recent Africa Media and Entertainment Outlook for 2024 to 2028 expects South Africa’s entertainment and media sector to achieve a compound annual growth rate (CAGR) of 4.2% over this period – outpacing the expected global average of 3.9%.

The report also expects the sector’s revenue to grow from R295.3 billion to R363.2 billion over the next five years.

It explained that streaming services and internet advertising will expand the most because of more stable internet connectivity and 5G adoption in South Africa.

Since December 2024, more South Africans have been using 4G than 3G. Furthermore, nearly 50% of South Africans have adopted 5G, which translates to much faster internet speeds and stability compared to the prevailing 4G and LTE connections in the country.

In South Africa, video is the largest content category consumed, with a share of data consumption of roughly 82%.

PwC estimates that video will make up about 84% of data consumption by 2028, followed by communications and games at around 7% and 5%, respectively.

South Africans particularly favour videos on social media platforms like TikTok and Instagram.

Furthermore, streaming is expected to grow quite rapidly in the country over the next few years.

PwC expects the streaming market to grow at a compound annual rate of roughly 8% to produce a revenue of R6.8 billion.

Since significant investment has been made in infrastructure and content for streaming, it is expected to gain 1.6 million additional subscribers by the end of 2028.

For example, MultiChoice recently made a R6.9 billion deal with NBCUniverse’s Peacock to provide content software and services to Showmax for seven years.

In South Africa’s advertising market, digital advertising accounts for 59% of ad revenue. PwC predicts it will make up two-thirds of ad revenue by 2028.

This is due to innovation in digital advertising, such as smart TVs, paid search, and digitising billboards to optimally target consumers.

Smart TVs, which allow traditional TV and streaming to coexist, will be particularly good for South Africa’s entertainment and media sector. This is because they will allow for growth in advertising and streaming across the country.

The PwC report also took note of start-ups finding innovative ways to create free ad-supported content on smart TVs.

These innovations will see smart TV advertising revenue more than double between 2023 and 2028, from R237 million to R628 million.

Additionally, paid search is expected to grow at a CAGR of about 9%. Google has a monopoly in the paid search space, with 99% of paid search spending going to the tech giant.

Less than 1% of paid search marketing revenue goes towards retail paid search media advertising, where companies advertise their products on online retailers and marketplaces.

However, there is some hope for growth outside of Google, as Amazon, which launched in South Africa in 2024, is driving growth in the retail paid search media advertising segment.

In addition, digital out-of-home (DOOH) advertising, which is simply the digitising of traditional billboards and static advertisements in shops, is also an expanding sector.

DOOH is the only digital advertising sector that falls outside the scope of digital advertising, but it had a revenue of R1.1 billion in 2023.