- Â Internet revenue projectedÂ to account for 83.9% of $2.8bn growth
A new report by PricewaterhouseCoopers has said the Nigerian entertainment and media market revenue, which rose to $3.6 billion in 2016 would increase at a compound annual growth rate (CAGR) of 12.2 per cent to $6.4 billion in 2021.Â
PwC, which revealed this in its â€œEntertainment and media outlook: 2017 â€“ 2021, An African perspectiveâ€ obtained by THISDAY, noted thatÂ due to the depreciation of the Naira, Nigeriaâ€™s E & M revenue expressed in United States Dollars was somewhat depressed when comparedÂ with last yearâ€™s figures.
The report, which is the 8th annual edition, released this month, is an in-depth analysis of the trends shaping the entertainment and media industry in Nigeria, South Africa, Kenya, Ghana and Tanzania. It is a comprehensive source of analyses and five-year forecasts of consumer and advertising spending across five countries and 14 segments.
In terms of total E&M revenue, the PwCÂ report rated NigeriaÂ as one of the fastest-growing countries among those ones itÂ considered. It, however, added that, â€œThis figure must be treated with caution, as a huge proportion of that growth comes from Internet access revenue aloneâ€”specifically mobile Internet access revenue.â€
â€œThis in itself is an interesting side point, with Nigerians embracing dual-SIM phones in order to circumvent issues with network coverage.â€
As such, the outlook on E & M explained that, out of the $2.8 billion that the Nigerian market would add between 2016 and 2021, onlyÂ $452 million will not come from Internet access revenue, â€œdampening what seems like an optimistic picture for consumer and advertiser revenue growth.â€Â
This implies that a whopping $2.348 billion in revenue would be generated from internet access within the projected period, representing 83.9 per cent of the total. â€œIndustries such as the world renowned Nollywood, for instance, donâ€™t generate that much measurable revenue for Nigerian E&M due to issues such as piracy hampering official cinema owners and film vendors.â€
However, noting that, when internet access revenueÂ was excluded from the figures, Nigeriaâ€™s CAGR droppedÂ to a less stellar 5.4 per cent, which isÂ behind the 7.7 per cent seen in Kenya, the report added that, there was still much to be positive about in the Nigerian market.
According to the outlook, â€œThe combined elements of TV and video will add nearly US$200 million to 2021. Although the breadth of Internet coverage and speed of service is not yet sufficient to support meaningful Internet video revenue, pay-TV will do well over the forecast period. Growth was low in 2016 as providers focused on low-cost entry level packages designed to entice new customers. This has helped pay-TV households to rocket from 1.9 million in 2012 to 4.0 million in 2016.â€
The latest PwC reportÂ expressed the belief that, once the emphasis shifts towards upselling households to more premium packages with wider ranges of content, HD channels and TV everywhere services, a 4.1 per cent CAGR can be expected. â€œIn music, ringtones and ringbacks continue to make good running, thanks largely to their piracy-proof nature. And in video games, similarly, the social/casual model is making gamers of anybody with a smartphone, explaining rapid rises in this metric as smartphone connections rise exponentially.â€
It explained: â€œTV is Nigeriaâ€™s largest advertising segment, with terrestrial dominant, but with multichannel rising at a double-digit CAGR to 2021 as advertisers chase the countryâ€™s increasingly large pay-TV base. Local content remains important and MultiChoice continues to add programming to its DStv and GOtv services. MultiChoiceâ€™s dedicated sports channel, SuperSport, has invested significantly in Nigerian content, particularly in football and basketball.â€
Besides, the report also projected that, â€œA healthy proliferation of radio stationsâ€”Lagos State alone has 23â€”will also take radio advertising revenue to just shy of US$80 million in 2021, while the countryâ€™s rapid rate of urbanisation in particular spells good news for OOH (out-of-home media).â€Â
â€œInternet advertising, though, is the most exciting growth area, with a CAGR of 19.5 per cent expected to propel the segment to US$157 million in 2021. Mobile Internet is seeing especially strong growth, and will overtake wired advertising by the end of the forecast period.
â€œIn March 2017, Facebook began accepting payments for advertising space in naira. Previously, prices were displayed in naira, but payments were not accepted in the currency, meaning that extra currency conversion fees and blocked transactions were commonplace. Businesses can now pay for Facebookâ€™s ad space using local debit cards, improving access to the social network for advertisers and local companies across Nigeria. This will only improve the transition of advertiser dollars to the segment, even if it may not spell ad revenue for the countryâ€™s content producers,â€ the report added.
Â The Securities and Exchange Commission banned the Managing Director of Partnership Investment Company Plc and Partnership Securities Limited, Victor Ogiemwonyi, from operating in the capital market for life. OgiemwonyiÂ was also banned for life from holding directorship position in any public company in Nigeria for his alleged unprofessional conduct in the Nigerian capital market in respect of the activities of both companies. He would also pay a penalty of N100, 000. With the ban, the commission said the companiesâ€™ operating licenses had been withdrawn, while their chairman, Henry Omoragbon, was suspended from engaging in Nigerian capital market activities for five years.
Â Oil markets were firm and remained near multi-month highs reached penultimate week as the number of U.S. rigs drilling for new production fell and refineries continued to start up after getting knocked out by Hurricane Harvey. U.S. West Texas Intermediate crude futures were at $50 per barrel at 0547 GMT, and close to the more than three-month high of $50.50 reached penultimateÂ Thursday. Brent crude futures, benchmark for oil prices outside the United States, were at $55.71 a barrel, up 9 cents and not far from the almost five- month high of $55.99 touchedÂ on Thursday. Brent was $56 the previous week.
Â Comptroller General, Nigeria Customs Service, Col. Hameed Ali (Retd.) canvassed the complete closure of Nigeriaâ€™s most important border outpost at the boundary with Benin Republic, the Cotonou border, as a solution to the problem of smuggling. Ali made the submission at the 2017 Annual General Meeting of the Manufacturers Association of Nigeria in Lagos. He said the suggestion became necessary because it was becoming increasingly difficult for the NCS to man the border due to the illegal activities of smugglers and the adverse effect of such activities on local industries and the economy, generally.
Autonomy for AuGF
Â President Muhammadu Buhari pressed for a review of relevant legislations by the National Assembly to give autonomy to the Office of the Auditor-General of the Federation. Buhari disclosed thisÂ on ThursdayÂ in Abuja at the launch of the 2017- 2022 Strategic Development Plan of the Office of the Auditor-General of the Federation, where he was represented by the Minister of Finance, Mrs. Kemi Adeosun. The president said there was need to give the AuGF adequate powers to carry out his mandate in all the arms of government.
Â The Nigeria Investment Promotion Council said its target was to attract about $25 billion in foreign direct investment as the Nigeria-U.S. Investors Roundtable opened in New York. NIPCâ€™s Chief Executive Officer, Yewande Sadiku, said the councilâ€™s target from the forum was expected to surpass that of the Economic Recovery and Growth Plan. Minister of Industry, Trade and Investment, Okechukwu Enelamah, who spoke at the opening session of the forum, also said the federal government was deliberately investing in the development of infrastructure to attract investors to the country. â€œNigeria of the future will be dramatically different from the past,â€ the minister told participants at the forum held on the side-lines of the United Nations General Assembly meeting.