An in-depth look at investment in some of the continent’s most promising entertainment industries reveals areas of growth, challenges and what the future might hold.



Africa’s heartbeat is in rhythm with the passion, culture and creativity of its people. On a continent of 1.4 billion people according to estimates by the United Nations (UN), there are effectively 1.4 billion stories to tell, each one unique and brimming with potential.



The question is: what is the narrative, and who is telling the story? 



Africa’s prospects in creative industries like art, fashion, film and television, crafts and architecture, among others, are well-documented. An oft-quoted fact comes from the United Nations Educational, Scientific and Cultural Organization’s (UNESCO) 2021 report African Film: A Booming Industry. It illustrates the potential in the film and audio-visual industries, which could result in generated revenue of $20 billion per year.



Speaking on the outlook for entertainment and media in Africa over the next few years, Charles Stuart, PricewaterhouseCoopers (PwC) South Africa’s Entertainment and Media Partner, says to FORBES AFRICA:



“We look at consumer spend in terms of what’s covered from a cinema perspective. [It] is growing; it’s just taking longer to recover to where it initially was. Is cinema dead? No, we are not seeing that.”



But where is investment for this forecasted to come from? With the growth of video-on-demand (VOD) and over-the-top (OTT) services, and a burgeoning appetite for authentically African media and content, venture capital (VC) is poised to be at the forefront of development on the continent, for film and television in particular.



<h4 class="wp-block-heading has-text-align-center" id="h-show-me-the-money-jerry-maguire-1996">“Show Me The Money” (Jerry Maguire, 1996)</h4>



The African Private Capital Association (AVCA) indicates that 58 private capital investments, with a total reported value of $346 million, were recorded in Africa’s creative industries over the last decade (2012-2022).



“Starting from a low base of only four investments in 2012, private capital investments in Africa’s creative industries more than tripled, reaching a total of 13 in 2022,” says AVCA.



Notably, VC investments attracted the largest share of these. They accounted for about 67% of the total number over the 2012-2022 period, followed by private equity investments at 33%.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“WE LOOK AT CONSUMER SPEND IN TERMS OF WHAT’S COVERED FROM A CINEMA PERSPECTIVE. [IT] IS GROWING…
<cite>Charles Stuart, Entertainment and Media Partner, PwC South Africa</cite></blockquote>
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“These investments spanned various sectors, including the development of online gaming platforms, music and video streaming developers, operators of music websites, live broadcasting, film streaming platforms, providers of advertising and marketing services, and clothing designers, among others,” says AVCA.



Jeff Schlapinski, Managing Director, Research, at non-profit, independent membership organization, Global Private Capital Association (GPCA), echoes these sentiments. 



“Africa’s VC investments in media and entertainment companies reached $31.2 million across six rounds in 2022, a new record in terms of deal value.”



However, Schlapinski notes that investments into this sector have, historically, represented a very small percentage of investment activity in Africa’s venture ecosystem (~1% of the $2.75 billion invested in VC in Africa in 2022, according to GPCA).



“The significant growth of the venture capital asset class in recent years, along with the increased allocation of capital towards technology or technology-enabled businesses, has contributed to the growth of investments in this sector as well,” says AVCA.



<h4 class="wp-block-heading has-text-align-center">Economies In The Spotlight</h4>



According to AVCA, the increase in the number of investments in Africa’s creative industries strongly indicates investors’ increasing interest and recognition of the sector’s potential. A handful of countries attracted the biggest chunk of that investment over the 10-year period (2012-2022).



“In terms of their geographic distribution, South Africa has attracted the largest share of private capital investments in Africa’s creative industries at 24%.” Following South Africa is Egypt, accounting for 14% of these investments. The country has also emerged as a significant technology hub on the continent in recent years.



“Nigeria and Kenya, two of Africa’s largest private capital markets, have each accounted for 10% of these investments,” says AVCA. Speaking on 2022, in particular, Schlapinski notes that the markets that led VC investments in media and entertainment – in terms of deal value – were South Africa with $22.5 million, Nigeria with $5.7 million and Egypt at $2 million.



They represent three of the four most active countries for overall VC investment with Kenya rounding off the top four.



<h4 class="wp-block-heading has-text-align-center">The Redefinition Of Main ‘Stream’</h4>



Regarding three of sub-Saharan Africa’s emerging economies, namely South Africa, Nigeria and Kenya, streaming service, Netflix, released its Socio-Economic Impact Report earlier this year, where it reveals its impact since entering the market.



Over the 2016–2022 period, it invested $175 million in content and in the overall creative environment in these countries specifically.



South Africa received the bulk of this investment, accounting for at least $125 million. In addition to that, over the same period, it invested in upwards of 425 licensed titles in these economies, further opening up the market to a host of proudly African films and television series.



Expanding on PwC’s outlook for Africa, Stuart says that success for OTTs necessitates an understanding of the type of content you put out there.



“You can have a wonderful distribution platform [but] if you’ve got nothing good to show – which is part of cinemas’ challenges over the last while; some of those big titles and also the lack of big titles has worn out in terms of what we’re seeing.”



He emphasizes the fact that content is always going to be king.



“Coming back to Africa, the culture and the richness and the heritage that we have, if you drive around, you’ve got Shaka [iLembe], there’s Rosemary’s Hitlist (both documentary series) advertised on billboards. You’re seeing the importance of local content to the success of your streaming platforms. Initially, when a Netflix entered Africa, it didn’t do really well. All it was doing is, ‘here’s the international content’. People were familiar with it but we like our African stories as well,” says Stuart.



With streaming platforms, the cost base is mostly fixed, so, in reality, he says that it’s the subscriber base that drives the growth.



“How do you really translate things into profit? It’s getting more people to subscribe to your service. What they were lacking a lot in the early days was this local content – that really resonated with it. What many of the streamers have learned is that it is about finding that balance between your international content, supplemented with your local content. When you look at a lot of the communication coming out of Apple, Netflix, Amazon, there’s continued communication around the fact that they are investing in local content.”



Stuart adds, “There’s still opportunity for your local players but it’s not an easy industry. For every bit of content that ends up on Netflix, there’s probably 10 pieces of content that doesn’t end up on Netflix.”



<h4 class="wp-block-heading has-text-align-center">A Continent Up For The Challenge</h4>



The African Export-Import Bank (Afreximbank) recently took an in-depth look at the continent’s Culture and Creative Industries (CCIs) in its African Trade Report 2022: Leveraging the Power of Culture and Creative Industries for Accelerated Structural Transformation in the AfCFTA Era.



It noted that some of the obstacles hindering the growth of CCIs include policy frameworks, finance, infrastructure, intellectual property rights, standards and norms in the area of cross-border trade, accurate data, language barriers, colonial legacy and an extroverted model.



Furthermore, it states that “a positive outcome of the pandemic has been the necessitated shift to digital solutions and online streaming, which has helped boost the performance and resilience of creative industries underpinned by digital models and platforms”.



While Africa does have its fair share of challenges, PwC’s Africa outlook for 2023-2027, which is expected to be released in September, sheds light on infrastructure investments, particularly in the telco space, which has a fundamental impact on streaming platforms, data consumption, and the growth of mobile gaming on the continent.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“AFRICA’S VC INVESTMENTS IN MEDIA AND ENTERTAINMENT COMPANIES REACHED $31.2 MILLION ACROSS SIX ROUNDS IN 2022, A NEW RECORD IN TERMS OF DEAL VALUE.”
<cite>—Jeff Schlapinski, Managing Director, Research, GPCA</cite></blockquote>
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“For the first time, in this year’s entertainment and media outlook, there’s a telco outlook that has gone with it. One of the aspects that has been covered as part of that telco outlook this year is telco capex spend – how much are the telcos actually looking to spend from a capex perspective in the various markets,” says Stuart.



A glance at the numbers in the assurance, tax and advisory services provider’s Perspectives from the Global Entertainment &amp; Media Outlook 2023–2027: Resetting expectations, refocusing inward and recharging growth for the three aforementioned sub-Saharan African regions seems to indicate an appetite for investment. This includes the convergence of the creative and technology industries.



“When we look at capex spend – and there is some further breakdown in terms of broadband, mobile broadband – in Kenya in 2022, there was $470 million worth of spend in the capex space and that’s going to grow each year at around 2.2%. By 2027, telcos are forecast to be spending around $520 million on their capex infrastructure in Kenya. The vast majority of that – about 85% – is going to be in the mobile space. That probably comes as no surprise given the strong mobile- first characteristics that the market has.”



Stuart adds: “Nigeria is going to be spending more than three times that, so almost $2 billion by 2027. There is a lot of investment in Nigeria. You’ve got your big players – Glo, MTN – they’ve been spending in terms of upgrading the network. They’re already sitting at about



$1.8 billion and it’s going to be a bit above and below that over the forecast period; fairly consistent with that level. Again, the vast majority of that is sitting in the mobile space. South Africa is spending $1.6 billion and that’s actually going to drop a little bit over the forecast period. It makes sense in a way because a lot of the 5G stuff is already in progress. There’s a lot of spend happening at the moment but over time, that does mean it will slow down.”



Data consumption is expected to continue its increase, leaving telcos with solutions to find from an economic and infrastructure perspective. “The challenge that telcos and, particularly, the content providers have is the monetization of that because [it’s] very expensive to upgrade this. There’s obviously downward pressure on data prices but money needed to be spent to upgrade the infrastructure to cater for the increasingly data-heavy world that we live in.



About 80% of data consumption is sitting in the video space, and there are various other categories around communications, music etc. Does it mean that people are watching more than listening to music? Not necessarily. Video [is] just much more heavy from a data usage perspective,” says Stuart.



<h4 class="wp-block-heading has-text-align-center">African, Tech Savvy &amp; Proud</h4>



Another notable point in the report is the impact of the continent’s youth on the growth of the mobile gaming sector.



“The fastest growing segment of video games we’re seeing is in what we call casual and social gaming. That’s your Candy Crush, it’s mobile games that people either play on a free-to-play model or ‘freemium’ where it’s free to start but then you might start paying for things down the line. A lot of that is also funded potentially through advertising that appears in those games so that’s where a lot of that growth is coming from,” says Stuart.



These developments have also opened up an emerging avenue in the cinema space and he adds that this could create opportunities in emerging economies that are primarily tech and mobile-focused.



“Video games are seen as one of the access points to the youth. [They] engage in it and we’re seeing things expanding. During Covid, the Fortnite platform, which people access from a video games’ perspective was used to host music concerts – Travis [Scott], I think, was who appeared on the Fortnite platform and had thousands and thousands of people watching his show, whereas you previously wouldn’t have seen it. There’s a bit of multi- functionality within the video games space.



“What we are seeing in the cinema space is interesting. We’ve always had, traditionally, other sorts of areas like Lego, and then you’ve got Lego: The Movie. We are now starting to see video games that have movie titles and movie franchises attached to them. Why? Because you’ve got this audience that’s already engaged with your content in the video games space and how do you try and stay engaged with them but in a different media format? It could be a series on OTT or it could be an actual big screen film. Maybe that’s some sort of element of opportunity within Kenya and Nigeria – as video games continues to grow, that could help to spur some growth as that content is repackaged into the cinema space,” Stuart concludes.

singer on stage with crowd reaching for him

Where Does Venture Capital Feature In Africa’s Entertainment Sector?

It’s the inevitable cost of fame. Recounting one’s success story for the nth time and sounding like a scratched record.
Lira, born Lerato Molapo in Ekurhuleni in the East of Johannesburg in South Africa, has done it too, countless times, and relates it again – how she came to be a singer – in one breathless sentence. At 16, she was in the final year of high school in South Africa when she teamed with her best mate and two other friends from church for a singing competition. That night, they walked away with awards for best composition, best performance and best vocalist.
That night, a star was born.
In the present, Lira has performed all over the world, and has almost a million social media followers – that new measure of creative capital.
The accolades have come thick and fast: a Black Entertainment Television (BET) Awards nomination as ‘Best International Artist’ in 2012; performances with the likes of A-listers Alicia Keys, Shakira, K’naan and John Legend at the FIFA World Cup opening in South Africa in 2010, a big role in an Italian feature file, The Italian Consul, and a performance, in a David Tlale-designed gown, at President Barack Obama’s inaugural ball in 2013 in the United States (US). It was not just Lira’s, but South Africa’s wow moment on a global stage.
“I was performing for all kinds of races and that bridged the race lines for me. It was the first time that I saw something that transcended all boundaries,” says Lira.
She launched her American album Rise Again in the US in 2014.
As an undergraduate student, Lira studied finance and used her skills to exchange for recording time at a local studio. It resulted in her first demo at the age of 18. Then she put her music career on hold, finished her degree, started working and saved all her money, almost every penny she made.
“No one gave me the idea that I could go into music. I was into finance – general finance and auditing. I turned 22 and decided I would take five years to get it out of my system. I cashed in on my pension and made sure I could survive for a year. Two weeks after I served my notice, I landed a deal. I was exceptionally lucky,” she says.
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When she submitted her resignation, she created a five-year plan for her music career. In 2000, she was discovered by music producer Arthur Mafokate, who signed her to his record label, 999 Music. She released her debut album, All My Love, in 2003. Despite earning accolades at the Metro FM Awards, South African Music Awards (SAMA), Channel O Reel Music Awards and topping charts, it was “a disaster”. Her idea of how it would all play out was quickly shattered – and it broke her.
“My first deal was a disaster, they exploited me. It crushed my spirit so much that I slipped into depression. It took two years to get back on my feet. They just want to make money out of you, they want control over you.”
She left 999 Music; teamed up with keyboardist Victor Mngomezulu, bassist Tshepo Sekele, and producer Robin Kohl; and signed to Sony Music Africa and released Feel Good in 2006. A huge success, it led to multiple nominations and wins at SAMAs. The following year, the album was released in Italy, where its title track gained massive airplay.
In 2006, she started her own label Otarel Music in South Africa to house all her business interests. In 2011, she launched the label in the US. Otarel Music was responsible for the publishing of her musical works and her management company. The singer and songwriter outsourced her publicity and co-produced her own music.
“Mediocrity had become the norm but excellence is part of my brand value. I remember when I quit my job in the financial space, when friends would ask what I did, I would say I am a musician. No one would take us seriously. We have to be able to take ourselves seriously. I now do keynote speeches at high-level events, I speak as a businesswoman in the music industry. It is the one thing I am proud of, it is a model that I have built,” she says.
One of only two wholly black-owned labels in South Africa, she learned from other labels and modeled her business on them. With Lira as the sole attraction, she has built a brand around herself with a multi-million rand company which has consistently seen a 20% profit growth in the last six years.
“Every time we have a tour in the States, it is self-funded, it is completely my brand. It is incredibly difficult to build a brand for an artiste. Artistes have to see themselves as a business. I couldn’t baby another artiste, I mentor a lot of people and consult on that level. I recommend that artistes manage their own business,” she says.
She splurges on her business and her image. She’s adamant she has found the secret to the glamorous life without racking up debt. Her brand is centered around being innovative and creating an image she can export.
“The best thing is being able to control my career, as an artiste, you want to express your creativity. I’ve been able to imagine and fund the kind of live performances that I want. We were the first people to spend money on a big production. I was the first African artiste to produce a full HD production. We used a RED camera and we held the record for having the most RED cameras in any production in the world. The only other production that beat that was The Hobbit. That’s the kind of excellence you push for,” she says.
For many African artistes, gaining traction in the US is daunting. For Lira, who has a large following in Africa, growing her brand internationally is a slow process but since going solo, she aims high.
“My brand works beautifully because of the visual products I put out. My intention was always to produce products of a global standard. People take me seriously because they can see that. When people google Lira the quality of my work speaks for itself,” she says.
“For three years, I built my business up. Within a year, I doubled my income. This whole diva tactic doesn’t work for me. Stars that succeed know that without your customers you will not have business,” she says.
Her next project is a seven-part TV show, Dream Chaser, which traces her story and what goes into building a brand out of a musician. Based on years of footage of Lira’s performances, the series shows everything – Lira with warts and all. She has been dubbed one of South Africa’s biggest acts – and wealthiest. Her following ranges from grannies to young executives to CEOs.
“The truth is I could retire. I don’t know what my net worth is but I have been debt-free for nine years. Well I guess my company turns over R7 million ($522,411) and I’m the only artiste. If I was in the US, I would probably be in the league of Beyoncé,” she says.
Lira may be one of South Africa’s highest-earning female artistes but she struggles to balance fame, wealth and her image in South Africa. For Lira, South Africa’s legacy doesn’t allow her to be ostentatious.
“We all love the underdog. As soon as you are successful, nobody likes it, they want to pull you down. It’s just the nature of us as South Africans. We cannot be happy for you if you rise too quickly – we’re not happy, we reject it. We just don’t like to celebrate each other’s success. It’s okay for you to know that I’m successful but not how.
“You will never know what car I drive, you will never know where I stay, you will never know what shoe I buy. I’ll never show off these little things because I still need to be close to the people. Your maid will come to my show, your mom who is struggling – those are the people who draw inspiration from what I do,” she says.
“In this country that’s what we’re like as a people. If people found out, that’s it, I must just go find another place to go make a living somewhere else,” she says.
She’s managed to secure her wealth and has built up a large following for her business model and investment knowledge. She sees money, wealth and self-respect as inextricably linked. Her views on money read like a self-help book. She’s clued up on making her wealth grow.
“I am successful because I work hard and I am very good with money, I’m very good with it. People don’t know how to deal with money. We don’t think we deserve, so when you have it, you will squander it. You will buy things that you think will fill what’s missing in your core person. You start using it to patch those spaces, that won’t last of course. You fill in what’s missing instead of dealing with who you are, when you deal with yourself, you will recognize how you use money to correct what is wrong with your person. As soon as you change that, you are awake.
“Everybody takes their cut and the last person you will honor is yourself – if at all. That’s how much we dislike ourselves. People think they are not linked. I will probably do a lot more with my little seven million than people who earn 20, 30 or 40 million because of my relationship with myself and how I use my money.”
Each concert is carefully orchestrated to deliver a deliberate punch of music. From conceptualizing to the actual stage performance, attention is paid to every detail and making sure her audiences experiences the wow factor. She has spent R700,000 ($52,240) producing a show at South Africa’s Carnival City as a local artiste with a two-hour performance. She’s got a 12-man team from stylists, makeup artists to light and sound technicians. Her show had a built stage and screens set up but Lira says her efforts go largely unnoticed and that there isn’t money available for African artistes. It’s a sentiment shared by many. Her commitment to delivering value for money is to make sure that the show will be top-notch.
“Chris Brown comes in, it’s just him and a DJ. I, with all that money cannot charge R500 ($37) which would make sense for me. For Chris Brown, the minimum ticket is R650 ($48) – he’s drunk, he’s swearing, he’s high, he performs for 45 minutes and South Africans will pay for it. That is the truth of my reality. I am done with entitlement. I realized I’m working so hard to reshape a certain consciousness. It took me time to get South Africans to trust me with their R200 ($14) to see just me. My returns are ridiculous so I do it for the love, for the brand-building,” she says.
“People are struggling to put food on their tables. But you’ll find more cellphones in Africa than people so we foolishly spend on showy kinds of things. We’re very twisted in that way,” she says.
Lira admits to being a dollar millionaire, but doesn’t foresee the billionaire pop star emerging out of Africa any time soon. Equivalent in status but the differing contexts of the US and South Africa translate into different ticket prices. She envies the returns of international artistes.
Her best experience was in Brooklyn, New York, at Beyoncé’s concert where patrons paid R11,000 ($820) for VIP tickets. Lira’s reality sits in direct contrast. R975 ($72) was Lira’s most expensive concert which included a VIP package. Lira has earned the trust of her South African audience – and it’s paid off. A concert ticket would cost R200 ($14), and R300 ($22) for the golden circle. But in order to do well, she estimates she would have to charge R500 ($37) for every ticket in order to keep her own label.
“It is very limited here. You get tired of scraping by because you always work so hard. You invest in your career but the returns are tricky. When I see my balance sheet at the end of the year, it almost feels like a miracle that you did so well but it is a worthwhile pursuit.”
A collaboration with Pharrell Williams would cost $250,000; John Legend is $100,000. There aren’t any collaborations on the cards – she doesn’t think it’s worth it yet. For now, she wants to be a household name all on her own.
Aside from her property which boasts a fully organic food garden, a filtered water system and a view to die for, Lira’s biggest splurge has been shoes.
“I have dropped some ridiculous amounts on shoes. I will never do that again. I do spoil myself on holidays, amazing holidays. I was in Paris with my husband and I did splurge on shoes. I spoil myself plenty on stuff that I really want,” she says.
“My fans are predominantly female and I have built myself as a wholesome brand. It would be out of character for me to be showing off my wealth. It’s not taken positively,” she says.
With Lira, it’s about brand management and investing for the present and the future. It is rare for an artiste to display financial wizardry and musical flair. And master both.

Tag: Entertainer

FORBES AFRICA SOCIAL MEDIA

Where Does Venture Capital Feature In Africa’s Entertainment Sector?

‘I Speak As A Businesswoman In Music’