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Elsa Majimbo, stuck at her home in Nairobi due to the Covid-19 pandemic and feeling isolated like millions around the world, started posting comedic clips on Instagram. Majimbo, laughing maniacally while eating potato chips on his bed, quickly built up a loyal following.
Two years later, she has 2.5 million followers on social media platforms; magazine covers; fashion campaigns; and a new home in glitzy West Hollywood. Like many African creators, from YouTubers and gamers to musicians and actors, Majimbo embodies the dizzying developments in the continent’s entertainment and media industries.
Amid the rapid adoption of digital technologies, the shift in behavior brought about by the Covid-19 pandemic and the stagnation of companies such as Netflix, YouTube and Facebook in Western markets, the future growth path of a dynamic industry may run through Africa.
As a result, Africa’s fragmented entertainment and media industries find themselves at a crossroads. As African consumers invest more of their time and money in media, companies will need to be more nimble. While all agree the industry is embarking on a period of massive expansion on the world’s fastest-growing continent, the underlying volatility means many companies will be left behind.
“The entertainment industry in Africa is still nascent, and we’re only scratching the surface of what investing in African creativity can achieve,” says Marie Lora-Mungai, media entrepreneur and CEO of Africa-focused production company Restless Global. company. The tech giants “know that their next billion users will come from Africa, which is why they are all investing heavily in the continent’s internet infrastructure”.
Entertainment and media cover a range of sectors, some of which are deeply entrenched in Africa, while others are products of the digital revolution heralded by the mass adoption of smartphones. Newspapers and magazines, traditional TV, live music, film, radio and street advertising remain strong on the continent, especially in less developed markets. In the long run, however, they are no match for new industries, including video and music streaming, Internet advertising, and social media.
Other media subsectors, such as mobile gaming, are only just beginning to gain a foothold on the continent, thanks in part to the pandemic and related lockdowns, which have upended lifelong routines. Covid-19 “forces people to decide what is important and what is not”, says Sipho Fakela, Africa’s leading media consultant. Many of these new habits have stuck.
some must grow
The continent’s most developed economy is driving phenomenal growth in entertainment and media in Africa. South Africa, its most industrialized country, is its most structured market, with mature creative industries and a strong talent pool for film, animation, design, games and music. It even has its own streaming service, Showmax. The advent of 5G technology in South Africa looks set to give the industry a further boost by increasing internet speeds and lowering prices.
Nigeria, with its large young tech-savvy population, is Africa’s entertainment powerhouse, dominating music, film, fashion and even the visual arts.
Meanwhile, Kenya, East Africa’s economic juggernaut and entrepreneurial hub, has huge potential for entertainment and media companies.Last year Netflix released its first Kenyan series, a gritty family drama called country queen. Highly artsy Ghana also showed great potential.
Smaller markets including Rwanda, Côte d’Ivoire and even Benin could also help drive the industry’s growth, industry experts say. Dakar, the capital of Senegal, has become the cultural capital and leading sports center of West Africa. Outside of sub-Saharan Africa, Egypt, Morocco, and Tunisia showed strong growth in games, visual arts, and animation, respectively.
Markets such as Namibia and Botswana are still five to six years behind markets such as South Africa, Fakela said, largely due to high prices for streaming data and slower digitization — which has left people reliant on traditional media, including newspapers and radio.
According to the mobile network industry body GSMA, only 28% of sub-Saharan Africans Connect to the Internet by the end of 2020. In some third-tier markets, the state still has a lot of control over the media — though things are starting to change, Fakela said. “The cheaper data becomes, the more viewers you’ll get through,” he said. “It creates more fragmentation, but I think it reduces media costs.”
Africa’s entertainment industry is building itself, says Lora-Mungai. “About five years ago, governments and development finance institutions such as Afreximbank, the International Finance Corporation, the French Development Agency and its subsidiary Proparco, and the African Development Bank – all of which started to seriously consider the creative sector as a source of growth and job creation, “she says.
Monetization on the move
At the same time, improvements in internet penetration, smartphone ownership, online payments and monetization tools have given African creators access to global online markets. Platforms such as Instagram and YouTube have provided African creators with monetization tools such as mobile payments and advertising during the pandemic, she said.
As a result, South Africa, Nigeria and Kenya will see strong entertainment and media revenue growth from 2021 as all three major markets emerge from the pandemic, according to a report by global consultancy PwC. However, Covid-19 has also exposed fissures in the sector, with some subsectors benefiting from behavioral shifts while others have failed. For example, some former segments such as gaming have become more prominent, while some established industries such as newspapers have declined.
The advertising industry, which was hit the hardest by the pandemic but has experienced its biggest rebound since then, will see rapid growth in the coming years.PwC report claim By 2026, 79.7% of South Africa’s entertainment and media revenues will come from internet advertising, as consumers spend more time online and advertisers follow suit. “I think the competition in the next five to 10 years is likely to be between Google and Facebook and Netflix or Amazon Prime, rather than Netflix and the local national broadcasters,” Fakela said.
Other industries poised for rapid growth include music and video streaming, whose revenue growth is expected to outpace traditional TV subscriptions in Africa’s largest market by 2026 — though TVs will still be much bigger. For example, streaming revenue in Kenya is expected to reach $8.8 million by 2026, while TV subscription revenue will hit $420 million, according to PwC. Likewise, music streaming is the fastest growing segment of the Nigerian music market, with the country’s artists including Burna Boy and Wizkid topping the global charts.
In a sign of changing times, President Biden’s US-Africa Summit When traditional industries such as mining and agriculture were discussed in Washington, D.C., in December, Burna Boy had just sold out Capital One Arena near the nation’s capital.
games are serious
Mobile gaming is also growing rapidly. Today, two in five South Africans play games regularly, compared with one in five Nigerians and Kenyans. african proincluding Beast of Kenya and Arrow have attracted a large number of fans.
Non-fungible Tokens (NFTs) It is another small but fast-growing industry in Africa, with Nigeria being the sixth largest NFT market in the world and South Africa being the twelfth largest.
Facebook owner Meta told PwC that its proposed virtual reality “metaverse” could contribute about $40 billion to sub-Saharan African economies by 2032. A report by business intelligence firm Ornico found that more than 16 percent of South African consumers had participated in a “virtual world” in the past year. In 2021, Africa’s first Metaverse Ubuntuland will be launched, and MTN Group and advertising company M&C Saatchi Abel have already purchased the plots.
In contrast, the market share of newspapers and magazines is expected to decline. Cinemas are also likely to struggle in the long-term as streaming usage grows – although box office receipts in South Africa remain strong. Cinemas are currently popping up in cities like Dakar and Nairobi to cater to the growing African middle class.
In the continent’s largest market, the boost is coming in the form of 5G (fifth generation) Mobile data technology, which should lead to cheaper, higher-quality lag-free streaming, cloud gaming, and virtual reality. South Africa is on the verge of adopting 5G after a series of spectrum auctions. Nigeria held a successful spectrum auction in 2021.
“5G is going to play a huge role because I think it will significantly reduce the cost of connectivity,” Fakela said. “I think it’s also an economic driver because you have new business coming up because of faster connectivity and connectivity in areas that were previously underserved.”
Originality and authenticity will breed success
The companies that can succeed in Africa’s fragmented media and entertainment industry will be the ones that give African consumers what they want, not the ones that repurpose Western content for Africa. Nowhere is this trend more evident than in streaming, where the likes of Netflix, Amazon Prime and Spotify have begun to take Africa seriously.
Today, Netflix offers a vast content library, while Showmax has a wealth of original African content and global sports coverage. Disney+ launched in South Africa last May and has gained a foothold in Morocco, Egypt, Algeria, Libya and Tunisia. Meanwhile, Amazon Prime Video launched a local service in Nigeria in August, allowing customers to buy subscriptions in naira, and has established dedicated country teams for Nigeria and South Africa. A similar expansion has occurred in music streaming.
In turn, local companies are receiving record funding. African entertainment startups had their best funding year ever in 2020, raising $13.9 million, most of it from venture capital firms, according to Disrupt Africa. That comes as streaming sign-ups start to slow in saturated Western markets.
However, there is still some way to go. Streaming giants remain keen to match their investments with expected returns, Lora-Mungai said, leading to complaints from African creators that budgets are still too low compared with elsewhere.
The race between streaming giants to expand their African customer base shows that the trajectory of the entertainment and media industry is shaped by the needs of African consumers. With low barriers to entry, consumers can access a wide variety of content and services within their price range. At the same time, companies must battle fierce competition and ongoing disruption to stay relevant. For those who do this successfully, the rewards will be great.
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