Technology has brought sweeping changes to the look and form of modern entertainment. The possibilities of digital technology promises to take the Nigerian entertainment industry to a new level as investors from other sectors, particularly the Telcos, are now looking to diversify into the industry.
The combination of high Smartphone internet penetration in Nigeria, stronger competition and rapidly falling prices is forcing Telcos in the country to adapt and quickly embrace the potential investment opportunity of the Entertainment industry.
“You have to find growth in actually selling services or participating in services revenues,” says Sifiso Dabengwa, MTN’s Chief Executive Officer in an interview. “It’s going into the services, whether it’s e-commerce or its distributing music, or let’s say, entertainment.”
In July this year, MTN Nigeria launched “Music +”, a streaming service for local music, where it uses partnerships with Tiwa Savage, Praiz, Davido and other Nigerian artists to enable subscribers to stream their songs from N120 ($0.73).
In the first month of its launch, Music+ attracted 350,000 customers, offering a service similar in concept to Apple’s iTunes, but with a local focus.
They have been particularly successful in Nigeria, Africa’s largest economy and home to a quarter of the company’s subscribers, which is a testing ground for a number of MTN’s plans.
Founded 20 years ago, MTN is reaching the limits of traditional growth – customers using their phones more. As a result, the company is attempting an ambitious transformation that is seeing it move ever closer to the entertainment business; providing access to music, and in the future, movies.
MTN is now looking to roll out similar services in other African markets, having recorded a huge success in the Nigerian market.
Nigeria’s entertainment and media revenues will reach an estimated US $8.5bn in 2018, more than doubling from the 2013 figure of US $4.0bn at a CAGR of 16.1%.
“This represents one of the fastest growth rates in the world,” said PwC in a recent report.
The Internet has had a ripple effect across a number of sectors and will remain a key driver for the Nigerian economy, where the number of mobile Internet subscribers is anticipated to surge from 7.7 million in 2013 to 50.4 million in 2018.
The Nigerian Bureau of Statistics (NBS), in its 2014 second quarter report issued in Abuja, said that motion pictures, sound recording music production and entertainment recreation represent two of the thirteen (13) new economic activities in the new series by NBS, representing 1.2 per cent and 0.1 per cent of nominal GDP respectively.
Of all industry roller coasters, the music industry must be the wildest. The music industry has witnessed a tremendous growth. Recent album (Ascension) released by Tuface Idibia, is said to be the world’s 12th bestselling album according to iTunes Nigeria.
While the entire entertainment landscape has been transformed by the spread of technology, it’s the music industry that’s been most profoundly affected.
Digital music distribution outfits have sprung up over the last few years, making it possible for the spread of local music online and for investors to tap into an estimated $10 billion digital market globally.
Omobola Johnson, Minister of Communication Technology, at the recent DEMO Africa 2014 event, stated that technology represents a significant opportunity for the African continent. The minister also identified the profound increase in Smartphones and tablets as a reason behind the Internet revolution in Africa.
“The increase in the number of mobile subscribers has fuelled increases in mobile internet use in Africa and we are considered to be at the cusp of a mobile internet revolution”, Johnson said.
Nigeria’s Nollywood, Africa’s largest movie industry in terms of value and the number of movies produced per year, has witness a massive evolution in recent years and analysts have attributed growth in the movie industry to the rising internet usage and Smartphone penetration in the country as Nigerians are now able to patronise Nollywood’s video-on-demand (VoD) services.
According to research by Ericsson, video is the fastest-growing internet activity in Africa. The Nigerian VoD space is led by iROKOtv whose founder and CEO, Jason Njoku, in a recent interview revealed that 80 percent of its viewers did not have access to pay-TV due to prohibitive costs.
“VOD is far more accessible, it is considerably cheaper and it can be watched on the go, which considering the burgeoning mobile market – set to hit 600 million handsets in Sub-Saharan Africa by 2020 – is critical, as the mobile phone will be the dominant hardware of choice for accessing content,” he said.
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.