Business
Nigeria: Internet penetration expected to boost online entertainment revenue to $8.5 billion by 2018
Jason Njoku, founder and CEO, iROKO Partners
The Internet will be a key driver for the Nigerian economy – Africa’s largest economy, where the number of mobile Internet subscribers is expected to surge from 7.7 million in 2013 to 50.4 million in 2018.
Nigeria’s entertainment and media revenues will reach an estimated US$8.5 billion in 2018, more than doubling from the 2013 figure of US$4.0 billion at a compound annual growth rate of 16.1 percent.
“This represents one of the fastest growth rates in the world,” said PwC in a recent report.
The report also predicted that television in the form of advertising and subscriptions and licence fees, will also become a US$1 billion-plus market in 2018, while the market will grow steadily.
According to recent data released by the Nigerian Bureau of Statistics, motion pictures, sound recording and music production represent 1.2 percent of nominal gross domestic product (GDP), amounting to just under US$ 6.1 billion.
The bureau, in its 2014 second quarter report issued in the Nigerian capital Abuja, said that motion pictures, sound recording & music production and entertainment & recreation represent two of the 13 new economic activities in the new GDP.
Nollywood, Africa’s largest movie industry in terms of value and the number of movies produced per year, has witnessed a massive evolution in recent years.
Following the recently released national accounts for the second quarter in 2014 by the bureau, telecommunications posted the strongest growth in the non-oil sector, at 6.2 percent and the private sector consumption has been identified as the single largest growth driver in the expansion and development of the tech sector in the country.
Analysts attribute growth in the movie industry to the rising Internet usage and smartphone penetration in the country, as Nigerians are now able to patronize Nollywood using video-on-demand (VoD) services.
According to Jason Njoku, co-founder and CEO of iROKOtv, “the audiences are in place and the content catalogs are expanding, but we are working with a bandwidth-light audience in Africa, so we’re waiting on cheaper and better broadband across the continent to make VoD even more successful.”
The music industry on the other hand, has also witnessed tremendous growth. A recent album – Ascension, released by Tuface Idibia, is said to be the world’s 12th bestselling album, according to iTunes Nigeria. The Internet has allowed performers to make their work just as available as the music of the most successful musicians. Since it has become simple to get music published, a wave of new performers and new styles of music has become available to the public.
Digital music distribution outfits have sprung up over the last few years, making it possible for the spread of local Nigerian music online and for investors to tap into an estimated US$10 billion digital market globally.
New technology and freelance studios have made it much easier and more affordable to record and produce music without ever needing to go to a professional studio. All of these new trends in the entertainment industry are a result of the Internet. The ability to not only download but share and promote media contents to anyone, dramatically changes how performers go about pursuing their careers, say analysts.
The broader conclusion is that the non-oil economy continues to drive growth, and is being driven itself by robust demand. In the last eight quarters with the second quarter of 2014 inclusive, real growth in the non-oil economy averaged 9.3 percent.
Source: Business Day