5G attack, the five major trends of the future entertainment economy
5G is entering all aspects of our lives in an intuitive and sensible way. According to research, in 2025, 57% of global wireless media revenue will be realized through the use of ultra-high bandwidth functions of 5G networks and 5G running devices.
And 5G technology brings not only "speed", but also new business models and immersive interactive experiences - video, games, music, advertising, AR and VR industries will undergo fundamental changes, content and audience distance will be Greatly shortened. Ultimately, 5G will add a new and tangible dimension to people's entertainment.
Recently, Intel commissioned Ovum, the world's leading telecommunications industry consulting company, to release "How 5G will Transform the Business of Media & Entertainment", and Huaying Capital's refined and integrated report content, let us explore the revolutionary impact of 5G on the entertainment industry.
5G blessing, the future 5 major trends of the entertainment industry
5G will expand the media industry volume
In the next few years, 5G technology will bring huge market growth to the media and entertainment industry, and the global mobile media market will double in size in the next decade, reaching $420 billion. The media companies that first accept the relevant business model will be the head winners.
By 2025, 5G will generate more revenue than 3G/4G revenue globally; by 2028, 5G new net revenue will reach 200 billion US dollars.
Global media revenue trends in 3G/4G and 5G network environments
5G will provide a new way of media interaction
5G technology will greatly facilitate AR/VR application development. Between 2021 and 2028, these applications will generate more than $140 billion in cumulative revenue and quickly grow into a new channel to reach consumers.
AR technology will bring people a new way to connect media through virtual goods, virtual characters, and enhanced context information. The creation of 3D content and an ecosystem that manages such content is also critical to fully exploiting this market potential.
Highly responsive tactile equipment combined with VR capabilities – such as the dazzling tactile feedback package in “Top Players” – will provide a new sensory dimension for media consumption. This new VR experience will emerge in 2025 and bring in more than $5 billion in annual revenue by 2028. By 2028, China will become the world's largest VR and AR market with direct revenues of more than $15 billion.
Characters wearing high-responsive tactile equipment in "The Number One Player"
5G empowered digital advertising market
Traditional display ads will better transform social and media immersive experience ads. 5G will also help address the key challenges of today's mobile advertising competition, such as scale and communication efficiency.
Mobile terminal advertising shows that the future will bring huge revenue opportunities to the advertising market. It is estimated that by 2028, the global market will reach $178 billion.
5G will become the main competitive asset of network providers in the media, B2B and B2C fields
5G - the best witness of the video industry's great changes, in the future, mobile video revenue will increase by the transmission speed brought by 5G technology, achieving huge growth. From 2021 to 2028, its compound annual growth rate will reach 85%.
With a wider coverage, 5G will bring economies of scale to network providers' TV products and form a strong competitive relationship with IPTV, cable TV, and satellite TV. At the same time, in the B2B field, 5G will help operators achieve mobile media growth through OTT video services.
OTT is the abbreviation of “Over The Top”, which is derived from sports such as basketball. The original meaning is “over the top pass”. Here, it refers to providing various application services to users through the Internet. This kind of application is different from the communication service provided by the current operator. It only uses the operator's network, and the service is provided by a third party other than the operator. At present, the typical OTT business has an Internet TV business, Apple App Store and so on.
The game will be at the forefront of innovation in the 5G era
By 2028, AR games will account for more than 90% of AR revenue in the 5G era (about $35.7 billion). Fast response and high-resolution live streaming will also help unlock mobile clouds and games. By 2028, the total revenue of 5G mobile games (including AR and cloud games) will exceed $100 billion.
Entertainment revenue increase and change: Who is the cash cow of the 5G era?
The report predicts that after several years of development, 5G will fully realize its industrial transformation potential from 2022, and people will see its significant impact on traditional media and AR/VR scale use.
At the same time, new applications such as 3D holography, tactile clothing, and advanced interactive entertainment will also appear. By 2028, immersive and new media applications will reach unprecedented scale, generating more than $67 billion in revenue each year – the equivalent of the mobile media market (including video, music, and gaming industries) that could be created throughout 2017. value.
5G media revenue sources can be divided into:
Enhanced mobile media (video, music, games)
Mobile advertising marketing
Home broadband and television
Immersive media (AR, VR, cloud games)
The “new media” here refers to new applications that 5G technology is spawning in the future (not yet officially available) and may include self-driving car entertainment, 3D holographic technology display, and tactile equipment.
The impact of 5G on media revenue in 2016-2018
From the perspective of value, the most affected by 5G is the advertising market.
The revenue of 3G and 4G mobile advertising continued to decline, and the revenue of 5G mobile advertising increased rapidly. This was mainly due to the increase in the use of video services, the emergence of immersive products driven by 5G and the resulting social integration.
For enterprises, if they can't access 5G network fast enough, their business model and profitability may face greater risks.
The average monthly traffic of 5G users will increase sevenfold in the next decade, and 90% of them will be consumed by video. By 2028, only consumers' spending on video, music, and games on mobile devices will nearly double, and the global total will reach nearly $150 billion. The driving force to help achieve this tremendous growth comes from the following:
Enhanced Mobile Broadband will provide a seamless, high-quality experience for streaming media such as Spotify and Netflix , and the global paid video, music and gaming market will double in the next 10 years, from $77 billion in 2018 to 2028. Nearly 150 billion US dollars.
With lower traffic costs, future carriers will be able to offer truly unlimited mobile data packets so that users can better use the more expensive media.
Advertising such as bundled sales and real-time data analytics will bring a new business model and will also drive consumer spending on 5G media services. By 2018, 5G bundled consumer package revenue will account for 27% of global mobile video and music revenue (approximately $11 billion).
The entertainment industry's revenue is increasingly dependent on mobile, and the profitability of new industries such as AR and VR continues to strengthen.
In the long run, the entertainment industry will also usher in a new way of realizing it.
Tactile devices connected to 5G will be able to provide a new sensory dimension to the media experience. Some new touches (such as heat, stress, etc.) can be tied to the weapon upgrade of the action game; the film industry can also use this technology to add a new sensory experience dimension, which can also open a new realization on top of the original income. the way.
5G will drive further developments in in-car entertainment, 3D holographic displays and live sports experiences, and generate $43 billion in revenue. Moreover, the evolution of the new media experience is very valuable to consumers, such as new media that benefit from 5G technology blessing, fans will be closer to their idols.
Ericsson has applied 5G network equipment to real-time interactive live broadcasts of Korean winter sports events, bringing viewers a high-definition interactive experience, including providing athletes' perspectives and real-time switching between multiple shots on the scene.
In the collective start-up project, “panoramic imaging” allows the viewer to follow the footsteps of a particular player, rather than just locking the picture in the lead group or being limited by the angle of the TV broadcast selection.
5G will also fully develop an immersive interactive experience, in which hardware and network capabilities will help. According to the report, the annual revenue of AR, VR and cloud games will increase by nearly 2400% in the next 10 years.
VR and AR are increasingly becoming the preferred entertainment method for Chinese consumers.
Multi-dimensional integration: three major changes in advertising/games / new media
In addition to the growing use of media platforms in mobile devices, 5G will bring many new opportunities and new ideas in the next 10 years –
The new form of advertising
Traditional forms of banner advertising will be transformed into mobile images and video; digital and social advertising transformations: integration and customization based on immersive experiences;
Real-time measurement of advertising effects through eye tracking, biometrics, etc.; new types of advertisements in the form of AR/VR;
AR, VR, and haptic technologies bring new ways of interacting and monetizing; the emergence of low-invasive advertising brings more opportunities for advertising-sponsored-based services (such as ads in Netflix).
5G helps reduce the load delay of cloud games on mobile devices; the emergence of haptic devices and VR changes the gaming experience. 5G-driven AR game revenue will account for more than 90% of all AR game revenue;
Virtual objects will be used in AR and VR games; for example, cloud-based gaming-based gaming experience enhancements will drive subscriptions; haptic devices can extend the payment dimension.
a virtual environment as a new media channel
New ways for consumers to interact with content will emerge; immersive experiences increase user engagement; create a true channel of communication between idols and fans;
At the same time, virtual items can be purchased through the application, or bundled with other digital media (such as movies, music, etc.); users with higher value can be priced according to the event or time; the new advertising mode appears;
The combination of haptic equipment with 5G networks will give consumers a sense of touch through the Internet; the new sensory dimension will bring a new way of entertainment profitability; different levels of sensory experience can be given different levels of price.
Focus on the underlying technology: 5G enabling potential can be expected
Looking back to the underlying technology that supports the world of entertainment, 5G will also benefit from related technologies such as network access, mobile edge computing, and network slicing.
In the 4G era, LTE technology is widely used at present. In terms of the network access speed we are most concerned about, 5G technology has a significant improvement over LTE technology: 5G transmission speed can exceed 1000 MB per second by using advanced antenna technology, improving air interface and accessing new frequency bands. Bit (1Gbps), which is equivalent to 10 times that of many current LTE networks.
In fact, the changes that 5G technology brings to the network itself go far beyond content access, and it will bring major transformations to other aspects of the network, such as mobile edge computing and network virtualization.
Moving edge calculation
Mobile edge computing (MEC) can help reduce network content latency for better content distribution.
Many 5G application dimensions, such as autonomous vehicles, AR/VR and drones, require low latency and high bandwidth, which means that data processing needs to be done at the edge of the network, not in the cloud. Taking VR as an example, in order to create an ecosystem that creates, manages, and distributes around 3D content, the Giants have worked hard on MEC computing, and have established mixed reality capture studios such as Intel and Microsoft.
Network slicing allows operators to classify different service categories on a public infrastructure. For example, with slicing, operators can guarantee a download speed of 1 Gbps bandwidth for a group of subscribers; and at the same time, provide different sets of surf speeds for another group of subscribers based on demand - both will be implemented on the same physical network at the same time.
5G ecosystem evolution
what does this mean? According to the survey, more than half of the people are willing to connect and access TV and video services through 5G. Wireless service providers can, therefore, bundle sales with 5G networks.
Verizon and AT&T have now invested in the US to replace traditional home Internet services with 5G. By 2028, nearly 9% of broadband homes in the United States will use 5G as their primary broadband connection, resulting in nearly $9 billion in revenue.
About the future: preparing for technological innovation
Ten years ago, when the 3G wireless network was first introduced, no one could predict the boom of today's mobile Internet. Without the 4G technology, today's well-known companies such as Airbnb, Uber, Netflix and Spotify have great success. Nothing to say.
The innovation of technology in the world will always exceed our imagination.
While these changes are not a one-size-fits-all, as more and more 5G technologies continue to be applied, more and more "updated" applications and business models will be unlocked.
As Ed Barton, principal analyst at Ovum Entertainment, expressed in this report: Next-generation wireless networks will drive diverse digital innovations and lead an exciting new world where business leaders and countries need to prepare for this.