Connect with us
nairametrics

Blurb

Nigeria’s Entertainment & Media industry to hit $10 billion by 2023 – PwC 

Nigeria’s Entertainment and Media industry is expected to rise from $4.46 billion in 2018 to $10.5 billion by the end of 2023.

Published

on

The Afrocentric Sounds are revitalizing the British Music industry and the Economy, Nigeria’s Entertainment & Media to hit $10 billion by 2023 – PwC 

Nigeria’s Entertainment and Media industry is expected to rise from $4.46 billion in 2018 to $10.5 billion market by the end of 2023, as disclosed in PwC’s recent Entertainment & Media Outlook report.

The report, which was released in October 2019, disclosed that the market is dominated by internet revenue, as it presently contributes about 61% of the sector’s revenue, followed by Television and Video, which is expected to push towards $1 billion in revenue by 2023, after adding $172 million in five years.

Highlights 

Internet 

  • The report stated that while mobile internet access is now theoretically almost everywhere in Nigeria, in practice the quality and reliability of service is highly variable. It found that there are only 1.3 million high-speed mobile internet connections, compared with 65 million low-speed connections.
  • All of the major telcos have offered 4G service since 2016, but it remains limited to certain areas of the country, though the network is steadily expanding. For instance, in May 2019, Airtel announced the extension of its 4G network to the cities of Enugu and Uyo.
  • The 4G rollout has proved challenging for Telcos as well, and the commercial viability of the service in the nation is yet to be demonstrated. Smartphone usage has soared in recent years, with some 72 million active connections recorded by 2018, but most consumers use very low-cost devices like the N13,000 smartphone rolled out by Google and Japanese manufacturer, Freetel in 2017.
Nigeria’s Entertainment & Media to hit $10 billion by 2023 – PwC 

Kids using Internet

TV and Video 

  • The main contributor here is Pay-TV subscription revenue, which surpassed $500 million in 2018. StarTimes is the market leader in the pay-TV segment, but many subscribers take only entry-level packages, meaning that MultiChoice continues to produce the highest Average Revenue Per User (ARPU) because of the important sports content on its SuperSport channels.
  • It noted that there is huge long-term potential for Over The Top (OTT) video once significant investment in infrastructure is made, but current internet limitations would see it struggle to make an impact over the forecast period. For instance, iROKOtv, which was launched in 2011 primarily to showcase Nollywood movies, stopped its streaming service in 2016 before it relaunched as a download service, as most of its activities now come through Wi-Fi, rather than over cellular networks.

It added that the presence of the Nigerian national team in the 2018 FIFA World Cup boosted viewing figures and opportunities for advertisers.

GTBank 728 x 90

[READ MORE: New PwC outlook examines how changing media trends affect advertising)

Advertising

  • Internet, Out-of-home (OOH), Radio, TV and Video are the four advertising segments in Nigeria, with TV accounting for 37% of the total in 2018, or $156 million of the total advertising revenue of $419 million. The proportion is expected to increase to 38% by 2023, as the newspaper is predicted to continue its long-term decline.
  • TV market- there has been an emphasis on terrestrial channels, as advertisers seek to reach the largest possible audience. TV advertising remains the mass-market approach, as the digital transition initiative of the federal government is incomplete. If completed, the transition will provide more thematic channels and opportunities for targeted advertising, but Nigeria remains lagging behind the advertising levels reached in the West.
  • While TV is expected to stand as the ad leader till 2023, in terms of net additions to revenue, its counterpart, internet ad, would add $60.7 million in absolute terms in 2023 against TV’s $60.2 million. The Google Partners programme, which was launched in September 2018, is expected to boost Internet ad, as it aims to develop awareness and expertise among businesses.

Nigeria’s Entertainment & Media to hit $10 billion by 2023 – PwC 

  • The OOH is not left out among the revenue makers. The second-largest segment (in 2018), has several headways for future growth, as it is highly fragmented, typical of the pattern in less mature markets, with a very wide range of operators in all niches of the market. The report stated that the entry of JCDecaux (one of the largest global outdoor advertising firms) in 2017, signalled international confidence in growth prospects of the advertising segment in Nigeria.

GTBank 728 x 90

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

1 Comment

1 Comment

  1. Sharon

    May 2, 2020 at 2:58 pm

    Found it quite useful. Thanks

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blurb

Why Treasury Bills at 2% is actually a good thing

While the current prevailing rate of 2% might not be good news for investors, the low rates could be better for the Nigerian economy.

Published

on

Implications of the new CBN stance on treasury bill sale to individuals, Nigerian Treasury Bills Market Witnessed Bullish Run on High Liquidity Last week

Latest stop rates from the Nigerian Treasury Bill auction held last week revealed some of the lowest rates for the nation’s T-Bills market in recent times. The 91-day bills had stop rates of 1% and the 182-day bills was also 1%. For the full year, the 364-day bills had an equally low rate of 2%. This is actually a good thing, as investors will become more creative, amongst other benefits.

If you were a frequent Treasury bills investor in the pre-COVID-19 era, you will most likely agree that one of the favorite markets for risk-averse investors, has taken a major dip over the past year. In 2019, the rate was as high as 13.029% – enough to give you a fighting chance with the equally high rate of inflation, as opposed to a savings account offering around 4%.

READ: FG liberalizes the Mining sector, grants 5 years tax concession to miners

However, while the current prevailing rate of 2% might not be good news for investors; theoretically, the low rates could be better for the Nigerian economy.

Double digits risk-free rates impede development

At the very basic level, having a risk-free investment that yields a guaranteed interest rate of about 15%, means that investors can put in their funds and fold their hands. Therefore, the option of making less risky investments become less alluring, as the lower rates can easily be mitigated by the relative safety of the principal (and return!) – something many businesses cannot boast of today.

GTBank 728 x 90

READ: NB Plc to raise additional N20 billion from its N100 billion Commercial Paper

Put simply, why should business owners risk employing people and possibly make losses, when they can invest in Treasury bills? After all, they too are exposed to the same inflation rate.

Unsurprisingly, this has contributed its own fair share in impeding the growth of the nation. Think about the percentage of the income of Nigerian financial institutions like banks that are from Treasury Bills. Conservatively, Nigerian PFA’s also have a significant percentage of their funds in Treasury bills – doing little and gaining little. It is always about the “cheapest to deliver.”

GTBank 728 x 90

READ: U.S public listed company allocates $425 million into Bitcoin

No society can effectively spur development with only safe investments, as it comes with its own benefits like creating more jobs, building the stock market, and ultimately strengthening the industries in the country.

‘Model’ economies have really low risk-free interest rates

Some of the largest economies like the US, Japan, and Germany are known to have some of the lowest rates for risk-free assets. Whilst their rates cannot also be isolated from their equally low borrowing costs, the facts are crystal clear.

From a demand and supply standpoint, at 15%, it means that what the government is willing to pay to get capital is high. This makes it even more expensive for the government to fund infrastructural development.

READ: Safest, regulated Cryptocurrency, Arcoin backed by U.S. Treasury securities

Jaiz bank ads

From a private sector standpoint, it is by taking risks that angel investors emerge, companies get seed funding, and further development is enhanced. Without this development, very few jobs will be created. Interestingly, most of the countries with the highest amount of venture capitalist investments have some of the lowest rates for risk-free assets.

Fidelity ads

How investments should be done

There is an old investment strategy known as “Carry Trade.” The way it works is simple – you borrow at a low-interest rate, convert the borrowed amount into another currency, and invest in assets that provide higher rates of return in that currency. If Treasury Bills offer such high rates, “foreign investments” of this nature will not aid in the overall development of the economy. As long as the exchange rate is stable, investors get to make a killing with no value-added. This is just one of the many lapses of investing in high risk-free assets.

READ: Crypto: Popular Hedge Fund, Grayscale record best quarter ever

With the rates low, people can now invest the way investment should be done. Investors will now be forced to be creative. Consequently, this will birth even further infrastructural developments. For example, with this rate sustained, mortgage-backed securities and other forms of infrastructural funding can now take place.

Though, it is not without its own limitations, keeping the free money low is always a better option.

Continue Reading

Blurb

#ENDSARS Protests: Why this is different

The #ENDSARS is not just a protest about rogue police officers, it is larger than that and this is why.

Published

on

In June 2019, the Hong Kong Government revealed plans to implement a controversial law that allows the extradition of Hong Kong citizens to mainland China.  

As the government dithered, pockets of protests broke out, which triggered clashes with Policemen that most protesters viewed as excessive. Within days, protesters went from a few thousands to over 2 million, the largest in the history of Hong Kong.  

By the time the government decided to pull back the bill; the protesters, many of them young, were already demanding for more than just a withdrawal of the bill. They wanted the police investigated and prosecuted for using excessive force, amnesty for protesters, and a right to vote for all.  

The protests lasted for about 6 months only to be dissipated by social distancing requirements, due to the COVID-19 pandemic. Before then, protesters had grounded the economy, which drove the Hong Kong economy into a recession and $3 billion in stimulus.  

Nigeria is experiencing its own version of protests similar to that of Hong Kong, except that it does not have any money to inject as stimulus. The latest protests were triggered by anger over the alleged violent killings and extortion by the controversial anti-robbery unit of the police, known as SARS or FSARS.  

GTBank 728 x 90

For years, young Nigerians, mostly via social media, have called for the unit to be disbanded and rogue elements in the force brought to justice. Despite repeated promises by the government, they have failed to heed to their demands, triggering a new wave of protests that has now spread across the country. 

From demanding an end to SARS, prosecution of rogue police officers, and reforms; Protesters are more emboldened, threatening to continue if all their demands are not met. The government is scrambling to contain a situation that is escalating and could dangerously metamorphose into violent clashes with authorities, leading to loss of lives and destruction of properties 

There is also fear that this week’s protest could be sustained for more days, if not weeksYou only need to look at the economy of the Nigerian Youth to understand why this is such a critical moment. 

GTBank 728 x 90

According to data from the National Bureau of Statistics, Youth unemployment is at an all-time high of 34.9%, making up 64.3% of total unemployed Nigerians. University students have also been at home for months, due to the 7 months ASUU strike.  

Their parents are also facing tougher economic conditions with inflation rate galloping past 13%, after multiple devaluations and the removal of fuel subsidy. It was just a matter of time for them to find a rallying point to vent their frustration. 

There is still a window for the government to deescalate tensions, and it is not just by accepting the terms of protesters on paper and making bogus pronouncements. Nigerian youths want concrete actions and it starts by making immediate changes in the leadership of the Police – the rogue unit in particular. Officers suspected of murdering innocent Nigerians need to be made to face justice.  

The government also needs to urgently resolve its dispute with the Academic Staff Union of Universities (ASUU) on the Integrated Payroll and Personnel Information System (IPPIS). Students and young Nigerians also need to be offered grants and palliatives to help them cushion the effects of an economic crunch that is in no way their making.  

Proceeds from the Nigerian Youth Investment Funds should be disbursed immediately to those who have applied. The government also needs to introduce student loan schemes for millions of Nigerian youths, who can’t afford to pay for quality university education.  

Jaiz bank ads

The National Assembly also needs to introduce laws that protect young Nigerians from police brutality, status profiling and wrongful arrest. Investments in mega tech hubs across the country, establishment of recreation zones in major cities must be carried out by State Governments, to keep them engaged in activities that can better their lives.  

Fidelity ads

No investor, local or foreign will put money in any country where its youths are in long-drawn protest with the governmentAs the economic cost of the protests for the last few days continues to mountthe negative effects could be more dire than a deeper recession. 

#ENDSARS does not just represent a protest against rogue Police officers; it is a symptom of the poor state of the economy, which for months has only gotten worse. Fortunately, the agitation can still be managed but time is running out.  

Continue Reading

Blurb

Thrive Agric: “Where is my money?”

AgriTech firms make promises of mouth-watering returns, but what they do not reveal loud enough is just how risky the investment is.

Published

on

Fund a farmer, make a profit! Thus, says Thrive Agric, a popular AgriTech company that crowdsources funds from investors in exchange for a profit. The business model appears simple and easy for any basic investor to understand.

When you invest through them, they pool your funds along with other investors and then invest the collective sums in farms across the country. When the farmers harvest, they sell the farm produce at a profit, receive the cash, and split among investors who contributed to the pool. The company keeps a commission for itself. It all makes business sense, except for one thorny challenge – It is highly risky.

Explore Data on the Nairametrics Research Website

Last week, a Twitter user posted a tweet demanding a refund of his investment in Thrive Agric – almost a million naira. The company lamented that they could not pay him, because they had experienced losses due to the COVID-19 pandemic. The investor was taking none of the excuses, resulting in a name and shame on twitter that has since gone viral.

READ: Nigeria’s Broadband subscriptions peak at 82.7m – Prof. Danbatta

GTBank 728 x 90

AgriTech Investments as they have come to be known has gained popularity as a viable investment option for Nigerians, who are still afraid of investing in the stock market. The largely unregulated sector leverages technology, an easy and relatable business model, and the promise of a mouth-watering return to yield-hungry investors. What they however do not reveal loud enough is just how risky the investment is.

Farming in a country like Nigeria is a highly risky venture that relies on a value chain that is fragmented, full of middlemen, and largely inefficient. Nigeria’s average yield per hectare is one of the lowest in the world, largely due to lack of farming inputs such as fertilizer, irrigation, and insecurity.

READ: We wanted to help users pay themselves first – Piggyvest

GTBank 728 x 90

AgriTech firms like Thrive Agric face these risks when they pool money from investors and pass on to farmers. Though part of their role in the investment scheme includes monitoring how the funds are utilized by farmers, they have no control over several risk factors such as the impact of COVID-19, which they alluded to as the challenges for not being able to pay investors.

Perhaps, if they disclose the inherent risks in the business, investors will be better informed and size up their risk against the returns. A cursory look at the company’s website reveals there is nowhere that it is mentioned that there is a risk of not getting all or part of your money when you invest. It probably would ruin the pitch if they did.

READ: Livestock Feeds: How this company survived over half a century producing animal feed

This is why when you visit their website and that of their competitors like Farmcrowdy (who pioneered this business) what you see are testimonials of just how well the investments are doing. You could argue that they had not defaulted in any of their previous rounds, so there was no need to say otherwise.

However, alerting investors about the inherent risks in a crowdsource investment scheme is not only responsible but a matter of best practice and compliance. The Security and Exchange Commission (SEC), noted this in its draft Exposure on Proposed News Rules guiding crowdfunding. Section 9a (iv) states that the crowdfunding company is expected to share a general risk warning on participating in funding through the company’s platform.

Jaiz bank ads

READ: Where to invest your N5m to N500m safely and securely

Fidelity ads

It also requires in Section 14 that they must publish on their website that “Investing through an online portal is risky and Issuers raising funds through the portal include new or rapidly growing ventures,” and that “Investment in the businesses hosted on the portal is very speculative and carries high risks; Investors may lose their entire investment and must be in a position to bear this risk without undue hardship.” This proposed compliance requirement is not been done by most AgriTech firms.

If this had been published on its website and duly communicated to its potential investors, we may have avoided the embarrassing and reputation damaging question that any fund manager wants to avoid – “Where is my money?”, especially if they don’t have it.

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
Stallion ads
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement