Local radio markets expected to grow by 4%
SOUTH Africa’s radio market is on a decline as online streaming services are chipping away at its market share.
A report by auditing firm PwC on the entertainment and media outlook between 2016 and 2020 said the radio market was expected to grow by a compound annual growth rate of 4 percent between 2016 and 2020 and would be worth R5.3 billion by 2020.
It gives a consumer and advertising spend forecast in media and entertainment for 11 segments in South Africa, Nigeria and Kenya.
Vicki Myburgh, entertainment and media industry leader for PwC Southern Africa, said 2015 marked the second year with lower growth “which may indicate some of the pressure that traditional advertising mediums are experiencing as advertising budgets increasingly move towards the Internet.
“However, radio still plays an important role in the South African advertising market, accounting for around one-tenth of total advertising expenditure in the country,” Myburgh said.
In 2015, total radio revenue grew by 0.6 percent, reaching
R4.3bn. PwC said radio was still a popular medium, with 87.7 percent of South Africans tuning into the radio on a weekly basis. It said the number of radio stations also continued to grow. Another 38 stations were created in 2015, and by March 2016, South Africa had a total of 296 stations – 40 commercial and public broadcast stations and 256 community stations.
“In terms of general trends over the five-year forecast period, with smartphone and tablet uptake set to increase dramatically, radio broadcasters will need to respond quickly to smartphone proliferation, and harness the opportunities offered by mobile Internet devices to create new services to lure in listeners and advertisers alike as a means of driving long-term growth,” said Myburgh.
“But these broadcasters will have to move quickly, because what presents itself as an opportunity also poses a threat as online streaming services compete in the same space. Music streaming providers could in fact prove to be the next radio broadcasters.”
She said the digital shift could boost both listening hours and audience sizes. Markets with an active digital strategy could increase usage within this segment. Growth in car ownership in emerging markets would create further demand for radio services. “Incar radio listenership will also increase in line with the growing urbanisation, especially in emerging markets, as car owners will spend more time in their vehicles,” Myburgh said.