What Africa’s Investors are looking out for in Entertainment and Media
When a market boasts $3.8 billion in spend with a Compound Annual Growth Rate (CAGR) eclipsing 15.7%, I notice.
Growth of this magnitude happens with the maturation of market-moving forces: consumers, technology, infrastructure and governmental support. Essentially, the seed of marketplace success finally has the right soil to grow.
And that’s what makes the above figures so awesome, and frankly, appetizing.
In Nigeria, these billions spent refer to the Entertainment and Media market. Without exception, E&M segments are rocketing up a hockey-stick growth curve and are forecasted to continue among the top two fastest growing E&M spend markets for the next half decade. More remarkable is that, according to PwC1, internet makes up nearly 50% of this spend.
Said another way: Internet-segment spend was nearly $2 billion last year – with only 3% of Nigerians having fixed broadband access, and even then that access being centered in the largest metros. This means that multiples of billions in spend, with healthy growth forecasted, is basically driven by mobile internet users. Digital content and the subsequent advertising and brand exposure are, for the first time, accessible by the majority of Nigerian consumers, on their mobile devices.
Showing no signs of letup and maintaining incalculable reach, here are the digital media trends I’m looking out for as an investor.
Global as a market
I’ve written before about Africa’s potential to boast more billion-dollar startups than anywhere else on the planet. Taking it a step further, I’ll wager that many of these success stories will exist as digital media plays. The requisite developed economy trappings (access to capital, infrastructure, education) that perennially inhibit massive scale are muted in the digital world.
Application and cloud delivery, with accessible markets in the billions finally level the playing field.
Tress, a hairstyle inspiration and community app for black women, reaches an underpenetrated and underserved global market. Although originally built for the African consumer, digital reach has opened up access to users in developed markets making the platform scalable by serving the hair-care needs of black women globally. Word of mouth and localized applicability (tagging salons and locally available hair products) have allowed the platform to become relevant no matter the user’s geography.
Whereas peripheral markets have generally been consumers of content or laggards from true innovation standpoint, the global market dynamic enabled by digital’s rise mean that emerging technology can finally come from emerging markets. Virtual and augmented reality, for example, are globally evolving with an entirely decentralized ecosystem of research and design, marketing and consumption. Why not a Virtual Reality/Alternate Reality lab in Lagos? Imisi 3D is doing just that by building a community of VR content creators in Nigeria, incubating VR/AR businesses and content, and marketing these to a global audience.
Traditional Content Goes Digital
The extinction of traditional media and its tried-and-true methods of information delivery, seemed a surety with the digital revolution dawn. But, it didn’t die, it just got savvy. As Ogilvy Media Influence remarks “Traditional media companies evolved from being in the paper business, to being in the information business.” Instead of blunt campaigns with untargeted, non-personalized and limited segmentation, traditional media has wizened up – serving the right content, in the right format, to the right segment at the right time. Often digitally.
Sliide App, with over 40,000 monthly active users, is changing news consumption by introducing lock-screen content delivery. With users themselves pre-selecting categories of interest (with ESPN, Vanguard, BBC and The Guardian as participating publications). Sliide modernizes distribution of traditional media and creates an unprecedented level of engagement with a three-pronged approach of friction-less mobile delivery, personalization and rewards. Udiit.com represents the coming-of-age of traditional content delivery. The digital content provider allows religious institutions to reach a wider audience and helps church-goers discover and download sermons on their mobile devices. While niched, Udiit is transformational in its approach to content consumption, broadening addressable audiences via the power of a digital dynamic.
Empowering through Digital
As media delivery changes, digital enhancement has raised personal, civil, commercial and social empowerment to unprecedented levels. Connectedness, enhanced by digital, grows transparency and opportunities for education and awareness.
If knowledge is power, then digital channels are the current: She.Leads.Africa is leading a charge of business-launching, career developing, world-changing and woman-focused communities. The digital extension of a movement targeting millions of women with live mentorship, training and inspiration, She.Leads.Africa is afforded immediate scale because of digital reach.
Targeting the Nigerian audience, BudgIT provides a platform for every citizen to access and understand public budgets. Transparency is a meaningful step ensuring government budgets are efficiently implemented for the benefit of the population on a whole.
Data and analytics to drive revenue
The rise of digital campaigns have allowed data on consumer behaviour and market performance to become accessible for the first time on the continent. Obvious beneficiaries of this data are digital advertising companies, yet other companies are leveraging data to drive their bottom line. Maliyo Games creates entertainment apps gamifying the everyday Africa experience. From swatting mosquitoes to running the rush hour gauntlet on an okada, their content story lines represent shared fights, values, visions and experiences of Africans. Relatable content encourages viral sharing. And analysis of engagement data means that content is built to keep users engaged longer while in-platform advertising reaches users with targeted effectiveness.
Asoko Insight capitalizes on data scarcity in Africa by offering subscribers data and analytics on private companies across Africa. It does this by mining digital channels, aggregating and offering hard-to-access, verifiable information. Their platform is the most robust on the continent, distilling firmographic and market activity data for investors, market participants and government officials. Packaging data with interactive, digital delivery is advantageous to anybody trying to do business on the continent and breeds smarter trade relationships and efficiency.
The inevitable ongoing fixed broadband penetration and an anticipated 31% of mobile internet user rate growth, highlight what has become priority to me – and obvious to anyone logging into Facebook, reading the news, or instinctively sneaking a peek at an SMS over dinner: digital content, and the subsequent advertising opportunities are everywhere.
For more perspective on Africa’s digital wave join me at Social Media Week’s panel on “What Africa’s Investors Are Looking for in Digital Media”, February 27 in Lagos. We will be discussing everything from hot trends to regulations and insider advice on getting an early-stage media startup funded.