Humble radio drives Kenyan media into billions

September 21, 2017 in Business, Communications, Finance, Markets by Editor

September 21—The Kenyan entertainment and media (E&M) market was worth $2.1 billion in 2016 according to a new report by PricewaterhouseCoopers (PwC) South Africa. This is up 13.6% on 2015, but the key ingredient of Kenya’s media industry is the continued earning power offered by the humble radio set.

Kenya has the 14th-largest radio advertising market in the Middle East and Africa region.

The financial consultants say this total E&M revenue will grow at an 8.5% compound annual growth rate (CAGR) over the next five years, hitting the $3.0 billion mark in 2020, and totaling $3.2 billion in 2021. PwC South Africa surveyed Ghana, Kenya, Nigeria, South Africa and Tanzania.

Total advertising revenue in Kenya reached a billion US dollars in 2016 and is set to grow at an 8.0% CAGR over the next five years, fueled by Internet advertising’s CAGR of 13.6% over the forecast period.

In comparison, Tanzania’s total E&M revenue stood at $504 million in 2016, but is set to more than double to $1.1 billion in 2021, a 17.2% CAGR over the next five years. The symbolic crossing of the $1 billion mark is set to occur in 2021. This is significant growth from 2012 where the industry stood at just $175 million.

Prior to 2016, Kenya’s largest advertising market was radio. Considering its small economy, Kenya has the largest radio advertising market in the Middle East and Africa region, and the 14th-largest in the world.

However, by 2021,PwC South Africa say it will generate more radio advertising revenue than Italy, a country with a bigger population and an economy more than 20 times larger.

According to analysts at Bizna Kenya, low costs and robust listenership are key pull factors to businesses looking to advertise on Kenyan stations. Due to the range of radio stations in the country, advertisers can reach key demographics, meaning targeted and more effective ad campaigns.