How 5G is set to change the TV landscape

*This blog post first appeared on the Massive Interactive blog. Massive was acquired by Deltatre in November 2018.

It’s here. Finally, after years of hype and industry experts heralding it as the ‘next big thing,’ 5G looks ready to take the world by storm.

Well, in select cities, anyway. Can’t be too greedy, right?

Verizon, AT&T, EE, Sprint, T-Mobile and Optus are just a few of the network operators who have committed to deploying the technology in some capacity over the next twelve months. And while we are still a few years away from the levels of coverage we currently enjoy today with 4G, these small initial steps indicate we are moving in the right direction. 

So what does this mean for the future of television? How will 5G impact the way the world consumes entertainment? And what can operators do to prepare? Here are a few of our thoughts.

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#1. Media consumption is going up, up, UP!

It shouldn’t come as a surprise that (much) faster download speeds, lower latency, and higher quality video will encourage growing levels of media consumption. It’s estimated that by 2028 each consumer of 5G will use an average of 84.4GB per month, up from just 11.7GB in 2019. 

90% of this figure will be attributable to online video.

With this growth in consumption comes proportional revenue boosts. Research from Ovum indicates that 5G will grow the global media market over cellular networks from $170 billion in 2018 to over $420 billion in 2028. Consumer spend on entertainment will double in size over the next ten years, hitting $150 billion globally.

What are the fundamental drivers behind this opportunity? We’ve already mentioned better speeds and seamless 4K quality with minimal buffering. But as the cost per bit delivered comes down (Verizon reports expectations of 40% or more per year) operators will be able to offer much more affordable mobile data packages suited to heavy media usage. And as the competition between operators heats up, so too will user adoption of 5G and all of the media consumption benefits it provides.

#2. Opening the doors for new media interaction

Virtual Reality. Augmented Reality. Live Experiences. All of these stand ready to be revolutionised by the advent of 5G technology and operators stand to gain significant market share if they can get it right.

Let’s look at VR and AR. It’s not an exaggeration to say that the future of both industries is tied closely to the fate of a robust 5G network. According to a report from Qualcomm, for both to unlock their true potential they need:

• More capacity at a lower cost. Around 50 to 200 Mbps for next-gen 360-degree video - 5G should far exceed this.
• Low latency. The success of VR & AR lies in its ability to make the user feel immersed. Lag can be ruinous, if not outright make the consumer feel sick.
• Uniform experience. Consistency in quality, anywhere and everywhere, by users who are always on the move.

Sound familiar?

As 5G capacity grows, VR will have the capability to go mobile, free from the need for a device like a PC or gaming console that has a large amount of processing power to work effectively. AR experiences will be possible anytime and anywhere, regardless of how crowded the area is with other individuals using the same application. Live streaming of a sporting event over social media, utilising VR for true immersion, will become a reality. All of these use cases and more will contribute to revenues of almost $50 billion in 2028.

But the benefits are not just one-way. VR and AR will help drive 5G adoption from the get-go. As operators invest in producing and marketing next-generation immersive video content, users will quickly come to find that their current 4G networks are unable to support the additional bandwidth, driving them to take out shiny new plans that can accommodate.

Another exciting area of opportunity sits in live entertainment, particularly with sports. 5G will unlock many immersive and collaborative viewing experiences that until now have been little more than theory. For instance, as the high bandwidth of 5G makes it more cost-effective for multiple video streams to be sent over the network, expect to see more operators offer 4K multi-angle coverage or enhanced graphical overlays that update with the player or social information in real-time.

This type of innovation applies to the in-stadium experience as well. Improvements to geolocation services that help fans locate each other in larger crowds, enhanced seating and concession experiences and innovative uses of user-generated content captured and shared in the moment all become achievable with fast mobile broadband speeds.

#3. A fresh take on advertising

The impact that 5G will have on advertising will be swift and impactful. Ovum pegs an extra $100 billion added to mobile display advertising revenues over the next 10 years, driven by the incremental usage of video services, the arrival of new media formats and the accompanying social media integrations.

With speeds up to 100 times faster than 4G, we can expect to see basic improvements, such as speedier ad load times on desktop and mobile. And with zero delays, visitors to OTT services and websites are less likely to click away to the competition, and maybe even think twice when it comes to installing ad-blockers – after all, loading delays are one of the primary reasons to use one in the first place, according to this study by IAB.

But this is just scratching the surface. With faster load times comes higher resolutions, meaning it will soon be commonplace for advertisers to market their wares in 4K or utilise interactive media formats like VR to tell cross-channel stores and build stronger relationships with their prospective customers. By 2025 it may not be uncommon for technologies like eye-tracking and biometrics to be employed to add an extra level of depth to real-time dynamic management of ad effectiveness.

In the medium-term, a quick-win for many brands will be the transition from static banner-based advertising to rich media advertisements like video or moving images baked directly into the user interface of an OTT video service.

#4. Winning back OTT market share

Perhaps the most exciting opportunity of 5G for mobile operators around the world is to use it as leverage to grow adoption of other products and services within their portfolio – namely television and OTT video.

Despite being the backbone upon which other sectors have built their fortunes, many of the world’s largest communications companies have struggled to capitalise on their own digital transformation. It is perhaps then ironic that as the carriers of the world’s internet OTT (“over-the-top”) traffic – estimated to reach the equivalent of 3 trillion minutes per month by 2021 – many telcos have failed to position video as a core service within their portfolio effectively.

Sure, they’re in the game, but largely they are losing out to the competition - companies like Netflix, Amazon, and Hulu have all taken the opportunity to step in and fill the gaps, capturing huge market share through the process.

5G offers an occasion to hit the reset button and start bringing online video customers back into the fold. The technology itself will ultimately become commoditised over the long-term – fast speeds and low latency a must, not a maybe. But as a critical differentiator in the short-term, bundling 5G mobile packages with attractive content propositions, either owned or in aggregate, is a sure-fire way to bolster the bottom line and boost consumer ‘stickiness’.

Hey. Why not check out our white paper “How to Win the War in OTT Video: What Telcos Need to Know About UX”?

Key Takeaways

So, it’s clear that 5G stands ready to make a massive impact on the online video industry. Here's a summary of what we expect to see.

• 5G will turbo-charge video media consumption worldwide, driving bumper revenues during the process.
• The technology will open new ways for consumers to interact with media through things like virtual and augmented reality, and live in-stadium experiences.
• Digital advertising in its current format stands to be revolutionised as traditional display advertising is replaced with more interactive forms of content.
• Network operators and telcos have an opportunity to leverage the introduction of 5G as a core differentiator in tandem with best-in-class online video experiences.