Market Trends of Africa Entertainment And Telecommunication Industry
Data Access and Availability of Internet Access to Drive the Growth
- African telecommunications operators experienced positive, if muted, growth since 2018 as total subscriptions, device ownership, internet penetration, and data usage continue to increase. The increased emphasis on flexibility, freedom and convenience in when, where, and how they interact with their preferred content is driving the growth of the entertainment and telecommunication industry in the region. According to the GSMA State of Mobile Internet Connectivity 2022, report, Sub-Saharan Africa is the only region where the cost of 1GB of data as a percentage of monthly GDP per capita exceeds 2%.
- The increased availability of low-cost smartphones and improving coverage of 3G and 4G networks are driving the demand for data connectivity and the take-up of digital services. Investment in fixed wireless and fiber technologies will also help to drive the adoption of fixed broadband in the region.
- The increasing rate of development in the telecom infrastructure will create more opportunities for the entertainment industry in terms of better reach and new customer acquisitions. For instance, According to Internet World Stats, Around four out of 10 people in Africa had internet access in December 2021.
- With the emergence of digital behavior, subscription models are playing a primary role in the monetization of the digital platform with evolving technologies, thereby creating opportunities for companies in the media and entertainment industry to achieve greater operational efficiencies. For instance in February 2022 Digital TV Research forecasts 13.72 million SVOD subscriptions by 2027, up from 4.89 million at end-2021.Whereas Netflix will account for 47% of the region's SVOD subscriptions by 2027. With no Amazon Prime countries in Africa, Amazon Prime Video is forecast to have 2.18 million paying subscribers by 2027.
- Local companies, foreign investors, and global players have all made a significant investment in the continent. Domestic infrastructure sharing, cross border, and in-country mergers, and governments responding to the opportunity to regulate and to auction spectrum and licenses are some of the major factors playing a role in the growth of the telecommunication and entertainment market in the region.
Understand The Key Trends Shaping This Market
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Data Consumed through Smartphone Segment is Expected to Have Major Market Share
- Africa is the only region in the world where the youth population is increasing. By 2050 Africa's young people, i.e., those aged between 0 and 24 years old, will increase by nearly 50 percent. Africa will have the most significant number of young people. Africa's youth are critical to the continent's future when it comes to the consumption of entertainment and telecommunication services as a whole. Smartphones are becoming the most convenient devices to access various types of entertainment as the number of people owning a smartphone is increasing at a rapid pace.
- The emergence of social media is disrupting the industry and players are switching from traditional towards digital platforms, these changes are increasing their ads spend on the digital media due to which the sector is significantly benefitting from digital tools and platforms. Such shifts are facilitating efficient production, distribution, and consumption of content through mobile phones revolutionizing market growth.
- However, additional taxes imposed on internet users across Africa for social media use, IP communication, or just general data use and the turf between OTT providers and mobile operators over taxes and regulations resulting in unfair competition may negatively impact the entertainment and telecommunication industry in the future.
- Significant SVOD players are introducing pack durations and sachet pricing as part of their strategies to boost subscription rates and ensure that consumers can access preferred shows at a low cost. This move can help OTT platforms gain significant acceptance in the price-sensitive South Africa region. For example, TelkomONE, a player in South Africa's streaming market, announced the addition of premium linear channels and video-on-demand (VOD) content from the WarnerMedia library. All WarnerMedia channels, including Boing Africa, the continent's top dedicated Hollywood movie channel, TNT Africa, the home of superhero action for discriminating young people, and Toonami Africa, the fun-filled video playground for kids under 14, are now streamable.
