Tag: ABI Research

A.I. and Machine Learning to Boom in Media and Entertainment Industry in 2022

Artificial intelligence and machine learning in the media and entertainment industry will boom in 2022, according to ABI Research’s new white paper 70 Technology Trends That Will—and Will Not—Shape 2022.

In the white paper, ABI Research analysts identified 35 trends that will shape the technology market and 35 others that, although attracting huge amounts of speculation and commentary, are less likely to move the needle over the next 12 months.

The role of A.I. and machine learning will increase significantly in 2022, with revenue forecasted to surpass $9.5 billion in 2022 when video ad tech is included, according to the white paper. Due to competitive pressures from direct-to-consumer services, incumbents (i.e., pay-TV operators, broadcasters) will have to reduce costs, limit churn and extract as much value as possible from existing customers. A.I./M.L.’s role here will increase to better target households with promotions, automate more workflows, and better secure the operators’ content and services, according to ABI.

A.I./M.L. will also play a growing role in the ad tech space to improve personalization and contextually aware advertisements and serve as grounds for differentiation. This is especially critical following changes to third-party tracking devices (i.e., Identifier for Advertisers (IDFA) and third-party cookies) and increasing focus on privacy, according ABI. The corollary of these trends is that the ad market will not suffer as severely as some had feared due to the changing privacy landscape.

“The fallout from COVID-19 prevention measures, the process of transitioning from pandemic to endemic disease, and global political tensions weigh heavily on the coming year’s fortunes,” Stuart Carlaw, chief research officer at ABI Research, said in a statement. “This white paper is a tool for our readers to help shape their understanding of the key critical trends that look set to materialize in 2022 as the world begins to emerge from the shadow of COVID-19. It also highlights those much-vaunted trends that are less likely to have meaningful impact in 2022.”

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On the other hand, the metaverse won’t arrive anytime soon, ABI predicts. The metaverse, despite all the headlines and investments, will not arrive in 2022 or within the typical five-year forecast window. “The metaverse is still more of a buzzword and vision than a fully-fledged end goal with a defined date of arrival,” according to ABI. “What we have today is a number of tech companies building their version of a ‘metaverse,’ but this multiverse is not fully interconnected, does not yet widely employ open standards, and certainly has not fully embraced Extended Reality (XR) — all tenets of the metaverse vision (some would also add the crypto economy to the list, which is also not in place).”

It may take the better part of a decade before that “completed” form of the metaverse begins to take shape, ABI predicts. When the metaverse does arrive, it will truly transform the way we live our lives and, in the process, generate tremendous opportunities for a host of technologies, including 5G/6G, edge and cloud compute, XR, and A.I./M.L., according to ABI.

Analyst: New Game Consoles to Boost Unit Shipments 6% in 2020

What a difference a year makes. With Microsoft and Sony poised to launch next-generation video game platforms, new data from ABI Research suggests 40 million combined units of the PlayStation 5 and Xbox Series X and Series S will ship by the end of the year. That tally is 6% higher than combined unit shipments in 2019, when gamers held off buying hardware and software — sending the gaming industry into a months-long funk.

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In addition to the new consoles and relevant content, the ongoing coronavirus pandemic has seen a surge in video game use in the home, driving sales of software, hardware and accessories throughout much of the year. With millions of consumers forced to stay at home in the first few months, game downloads and the number of active gaming users significantly increased. The demand for game consoles also increased in the first quarter of 2020, but supply chain disruption resulted in lower unit shipments. As operations resumed nearly back to normal in the second quarter, game console makers reported higher unit shipments in the second quarter.

“In addition to increasing demand in gaming, long-awaited next-generation consoles are targeting launch in November 2020, which will further drive the game console market,” analyst Khin Sandi Lynn said in a statement. “Although governments are reopening economies, still-imposed travel restrictions can impact logistics. Game console makers need to prepare for efficient production, content creation, and distribution plans to avoid supply chain shortages, especially during the holiday season when sales will peak.”

The Xbox Series X launches Nov. 10, and the PS5 bows two days later on Nov. 12.

ABI: 2020 Will Be the Year of Direct-to-Consumer Video, Not 8K TV

With the pending arrival of NBC Universal’s Peacock streaming service and WarnerMedia’s HBO Max, 2020 represents a major step toward an over-the-top video future where more content goes direct-to-consumer, reaching 900 million subscriptions worldwide, according to new data from ABI Research.

The research firm contends more consumers will be moving away from the traditional pay-TV bundle, while content access becomes more fragmented and consumers are presented with a growing list of distribution options.

“The ability to pick and choose which channels of content best fit [one’s] needs will only become increasingly more important,” Michael Inouye, video and cloud services principal analyst, said in a statement.

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The growing penchant among content owners to DTC is creating a more challenging market for “virtual multichannel video programming distributors” (vMVPDs). As a result, ABI said subscriber bases in some of the services have slowed, if not declined. The arrival of more DTC services in 2020 will further fragment the content landscape, making it an increasingly crowded space as more services vie for consumers’ content budgets.

Separately, the firm says rollout of next-generation 5G networks will accelerate. Analyst Khin Sandi Lynn said implementation of 5G fixed wireless access (FWA) will be great news for consumers. 5G FWA garners high interest from operators to replace last-mile fiber connectivity for residential broadband services.

“This allows greater service coverage and improved network delivery for customers served,” Lynn said.

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While there are still barriers to adoption, similar to traditional 5G (infrastructure is expensive and time-consuming to scale), many other operators and equipment vendors have already been trialing 5G FWA deployment across different regions, according to Lynn.

“Qualcomm’s recent announcement of 5G FWA partnerships, with more than 30 OEMs and ongoing spectrum acquisitions by operators indicates that the ecosystem is getting ready to speed up the rate of deployment,” she adds.

Meanwhile, Lynn said 8K rollout will remain largely industry hype.

“Announcements of 8K televisions by major vendors earlier in 2019 attracted much attention and raised many of questions within the industry,” Lynn said. “The fact is, 8K content is not available and the price of 8K TV sets are exorbitant. The transition from high definition to 4K will continue in 2020 with very limited 8K shipments — less than 1 million worldwide.”

Pay-TV Fighting Back with OTT Video

NEWS ANALYSIS — Consulting firm PricewaterhouseCoopers just issued a report contending over-the-top video revenue, spearheaded by subscription VOD stalwarts Netflix, Amazon Prime Video and Hulu, is projected to top $30 billion by 2022.

Indeed, SVOD revenue represented nearly 80% of OTT video revenue in 2017 — a percentage that is expected to inch past 81% by 2022 fueled by original programming.

So, what is the pay-TV ecosystem — which lost about 3 million subscribers in 2017 — doing in response? Jumping on the OTT video bandwagon.

Rollout of standalone online TV platforms such as Dish Network’s Sling TV, Charter’s Spectrum TV Plus and AT&T’s DirecTV Now will contribute to the global pay-TV market, including satellite, cable, and IPTV services, generating $295 billion in revenue by 2022, according to ABI Research.

“OTT is becoming a preferred video viewing platform due to its low-cost and availability on multiple devices without a long-term contract requirement,” Khin Sandi Lynn, industry analyst at ABI Research, said in a statement.

Pay-TV operators — notably Comcast Cable with its X1 set-top — are embracing broadband to provide OTT service together with traditional TV.

Swedish cable operator Com Hem recently launched Android-based TV Hub, which allows subscribers to access linear TV channels and streaming services. Broadband-based set-top boxes are a good option for pay-TV operators to compete with OTT service providers while maintaining customer loyalty, according to ABI.

“Pay-TV and OTT offerings can vary dramatically between regions and between countries in terms of content availability and price,” said Lynn. “OTT adoption in mature markets will impact pay-TV adoption there, but the more reliable delivery and all-in-one nature of pay-TV will prove valuable in those developing markets.”

 

Report: Augmented Reality Retail Adoption to Be Driven by Online Shoppers

Augmented Reality will see major adoption in the retail sector, driven more by use by online shoppers and the retail workforce, rather than use by customers in the brick and mortar environment, according to ABI Research.

AR experiences can prove extremely useful for online customers unable to interact with the physical products they intend to purchase, according to ABI’s Augmented Reality in Retail report.

ABI forecasts that, by 2020, 3% of e-commerce revenue will be generated because of augmented reality experiences. That equates to $122 billion in revenue worldwide.

“The relative ease of integrating AR into existing m-commerce platforms and the impact this can have on the user experience will largely drive customer demand,” said Nick Finill, senior analyst at ABI Research, in a statement.

The benefits of using AR will not overcome the barriers which exist in physical retail, however, which is inherently less reliant on the use of a mobile device.

“For consumers in brick and mortar stores, however, AR can disrupt the customer journey and provides little additional value overall,” Finill said in a statement.

For the in-store employee, AR promises to deliver operational efficiencies and raise the quality of the service delivered, according to ABI.

Smart glasses from manufacturers such as Vuzix are already starting to be used by retail employees to assist with front- and back-of-store operations, according to ABI. ABI forecasts that by 2022 more than 120,000 stores will be using AR smart glasses globally, with deployments evenly split across Europe, North America and Asia-Pacific. This will be driven by the need for efficiency savings to compete with rival retailers and the online sector generally.