War for eyeballs hots up in SA’s television industry
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SA’s film and television industry has the potential to grow by close to R100bn over the next five years, according to data from consulting firm Accenture.
Roman Magis, principal director for video, advertising and content at Accenture Africa, says its research shows that by embracing digital technologies, SA’s broadcasters could generate an additional R93bn in value by 2026.
That additional benefit could come from advertising revenue as well as investment in local film productions — particularly from global streaming platforms with deep pockets.
Local players who invest in technology such as digital platforms of their own also stand to benefit — from additional advertising revenue as well as growth in customer numbers.
However, Magis warns that as much as there’s an opportunity for the local industry, Africa’s players need to make sure they can capitalise on it or risk being outpaced. The way to do this is by investing in online platforms.
"The entry of global players is threatening the local SA market share and forcing local media organisations to rethink their traditional business models to take up the competition in the global context," he says.
Accenture’s data says the SABC, the public broadcaster, "has held a monopoly share of the industry," covering 77%-91% of the population. It has sustained itself mainly via advertising revenue, which made up 70% of its earnings of R6.46bn in 2019.
Competition for the now cash-strapped public broadcaster has so far come from free-to-air player e.tv, with a 90% reach and R1.6bn in revenue; as well as pay-TV provider MultiChoice, which has a population reach of only 15%-20%, with 8.4-million local customers.
However, pay-TV operators earn only a portion of their revenue from advertising. This may seem more sustainable, but "they too have been disrupted by newer models", such as digital broadcasting platform Netflix.
And the pie for advertising revenue seems to be getting smaller in favour of online platforms.
According to the National Association of Broadcasters, revenue from TV advertising grew from R6.6bn in 2014 to R7.5bn in 2018, reflecting a 3.3% compound annual growth rate in comparison with 14% growth during the pre-2014 period. Overall, television revenues comprising subscriptions, advertising and licences amounted to R35.4bn a year.
Magis says interest from international companies is a big opportunity for the local industry.
"Amazon is not as present in SA, but Netflix has become quite embedded. It has indicated that it is going to have ...
Roman Magis, principal director for video, advertising and content at Accenture Africa, says its research shows that by embracing digital technologies, SA’s broadcasters could generate an additional R93bn in value by 2026.
That additional benefit could come from advertising revenue as well as investment in local film productions — particularly from global streaming platforms with deep pockets.
Local players who invest in technology such as digital platforms of their own also stand to benefit — from additional advertising revenue as well as growth in customer numbers.
However, Magis warns that as much as there’s an opportunity for the local industry, Africa’s players need to make sure they can capitalise on it or risk being outpaced. The way to do this is by investing in online platforms.
"The entry of global players is threatening the local SA market share and forcing local media organisations to rethink their traditional business models to take up the competition in the global context," he says.
Accenture’s data says the SABC, the public broadcaster, "has held a monopoly share of the industry," covering 77%-91% of the population. It has sustained itself mainly via advertising revenue, which made up 70% of its earnings of R6.46bn in 2019.
Competition for the now cash-strapped public broadcaster has so far come from free-to-air player e.tv, with a 90% reach and R1.6bn in revenue; as well as pay-TV provider MultiChoice, which has a population reach of only 15%-20%, with 8.4-million local customers.
However, pay-TV operators earn only a portion of their revenue from advertising. This may seem more sustainable, but "they too have been disrupted by newer models", such as digital broadcasting platform Netflix.
And the pie for advertising revenue seems to be getting smaller in favour of online platforms.
According to the National Association of Broadcasters, revenue from TV advertising grew from R6.6bn in 2014 to R7.5bn in 2018, reflecting a 3.3% compound annual growth rate in comparison with 14% growth during the pre-2014 period. Overall, television revenues comprising subscriptions, advertising and licences amounted to R35.4bn a year.
Magis says interest from international companies is a big opportunity for the local industry.
"Amazon is not as present in SA, but Netflix has become quite embedded. It has indicated that it is going to have ...
