How Multichoice built a $2.1 billion market value in Nigeria’s E&M sector
Nigeria has gained a reputation as one of the fastest-growing Entertainment and Media (E&M) markets in Africa. Specifically, its film industry has become a significant cultural institution in its own right, earning fans throughout Africa and beyond, while creating opportunities for the development of niche and targeted advertising and new markets.
According to PwC Entertainment & Media Outlook, 2019–2023, Nigeria’s E&M market is dominated by Internet revenue, and having reached US$4.5 billion in 2018, its E&M revenue will rise at a 19.3% CAGR to reach US$10.8 billion in 2023. Specifically, the report said Nigeria will become a US$10 billion market by 2023 (before the outbreak of Covid-19 pandemic).
However, the ostensibly excellent growth rate must be put in the context of how much of this figure comes from Internet access revenue as it stood at US$3.1 billion in 2018, and will rise to US$8.7 billion in 2023, according to the report. In other words, 69% of Nigeria’s E&M revenue came from Internet access in 2018, and the figure will rise to 81% in five years’ time (2023).
Established in 1993, Multichoice Nigeria had a 7-year lead time, before the Millennium Development Goals (MDGs) became a guide and used those years to build a solid business that combines profit and purpose. Today, that business represents what shared prosperity is, having created the right mix of opportunities for its people to grow, while helping to build an industry that ranks as the second-largest in the world and the most loved in Africa.
For 27 years, Multichoice Nigeria has made significant contributions to the growth of the Nigerian economy, especially the country’s E&M sector. At the heart of this investment are entrepreneurship and employment opportunities through multiple channel distribution platforms and a commitment to the continuous growth of the sports, technology, film and video sectors through infrastructural development.
Accenture in its new report for Multichoice between 2015 and 2019 estimated that about $428million has gone into the local content production business of Multichoice, mostly in developing local creativity and building the production infrastructure to support it. To put this investment in more perspective, it directly translates to 117,459 hours of local content which is huge both on African and global scale, and definitely more if the organisation’s 27 years is brought into view.
The PwC outlook also revealed that outside of Internet access, TV and video would be pushed towards US$1 billion in revenue by 2023 after adding US$172 million in five years. The main contributor in the outlook is pay-TV subscription revenue, which surpassed US$500 million in 2018. The outlook says StarTimes is the subscription TV market leader in the pay-TV segment, but adds that many subscribers take only entry-level packages, meaning MultiChoice continues to produce the highest Average Revenue Per User (ARPU) because of the important sports content on its SuperSport channels.
As Multichoice continues to build more credibility for the entertainment and media industry in Africa, through its investment in local content, future talents, even award shows, it is also ensuring the market for the content they produce grows on the other hand. This process has required a strong supply chain and Multichoice Nigeria has proven equal to the task investing over $1 billion in their distributor, supplier, even installer network in just the last 5 years.
Whether this ecosystem model works is a question their recently released socio-economic value report put together by Accenture and covering the last five years of operations answers perfectly. The contribution of an estimated US$2.1bn to the Nigerian economy between that 5-year period shows that they understand the role they play in achieving a prosperous Africa based on inclusive growth and sustainable development.
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