Interviews

The Metaverse, streaming, wearable tech: Deloitte expert on the tech trends that will accelerate in 2022

  • Sync NI caught up with Paul Lee, Deloitte’s Global Head of Technology, Media & Telecoms (TMT) Research following a presentation in Belfast to get further insights into some of the key trends outlined in Deloitte’s annual TMT Predictions report.

    Paul, you talked about how the cost of acquiring a customer is very high for streaming services so it’s likely they will start charging more to cover the costs of content and introduce advertising. Do you think we’ll see more services launching, or do people only have the appetite to pay for a certain amount of subscriptions?

    I would certainly say there’s probably a limit to the number of services people will subscribe to. However, I do think there are quite a few more services that are going to be launched this year and in years to come. There will be some that are purely subscription based but also some that are additive because they are quite specialised. Specialist SVOD (subscription video on demand) is still in its nascency.

    Another big category will be sports. There hasn’t been very much sports SVOD because technically it is very hard to deliver, particularly when you’ve got the delay between what you see and when it happens. There is a delay in satellite broadcast of a few seconds because of the path. When it’s online the delay can be minutes, and in a game like football, in a couple of minutes you could have two goals. But the latency is getting better. You’ll see sports SVOD emerging as well as specialist SVOD.

    We do expect to see advertising SVOD emerge. That’s where you have advertising paying for everything or reducing the price. For example Disney has talked about later this year releasing Disney Plus with an advertising funded tier in the US. If that’s popular it will likely be extended to other markets.

    One model would be to pay, say, half price in exchange for having some adverts and another model could be that you get content free but you have a lot of adverts. Or you may have it ad funded but only have half or two thirds of the catalogue so that if you want to see everything you pay half price for some ads or full price for no ads at all. I expect the majority of consumers will consider some form of ad-funded tier.  

    People are used to advertising everywhere – on the street, in the cinema – it is part of society. Not having advertising is the anomaly as opposed to the rule. Consumers will need to accept the trade off between adverts and content.

    Do you see more convergence between the gaming world and other forms of media? You talked about how games companies are now growing faster than most media groups – do you expect more crossover?

    Gaming was once seen as frivolous, or even as a problem child. That’s not the case any longer. We do see some commonality in terms of, say, special effects in video games. Video Games are mostly up to 4K and they’ll move to 8K quality. The current later generation platforms support 8K, which also supports the trend towards much larger screens.

    Video games are becoming more and more photorealistic and there are a lot more special effects in movies, so there is definitely a symbiosis there. The better video games become in terms of photorealism, the better the special effects can become in movies.

    One of the trends that’s emerging with films and TV is that rather than having green screen and doing lots of post-production, is having video screens behind the actors and creating the special effects already there. The ability to create synthetic but realistic backgrounds is something you can apply into video games, TV and movies.

    You highlighted that it's 50 years since the first games console launched. You don’t see them falling out of favour any time soon?

    I don’t think so. Consoles are very powerful, leading-edge devices and there is a large base of people who use them. Also, people with older generation consoles very often move to the newer generation of consoles over time. Revenue per user is much higher than for mobile or PC gamers and the addressable market keeps going up.

    Consoles are also winning out versus cloud-based gaming. If you were to deliver an 8K experience via cloud gaming you need to have a really high bit rate to support that. With 4K you need to have up to 50 megabits per second to deliver the stream of a game. The problem with video games is that the background changes a lot so you need a high bit rate. With drama you will often have a static background and just a talking face, so the bit rate can be a lot lower due to there being much less information.

    It’s a lot easier for games to be played on a device and for changes to be sent through to a central server. Cloud gaming is also only a small percentage of the market and we know that gamers like to have other people to play against.

    You talked about how the Metaverse currently means something different to whichever vendor is talking about it and said it’s less likely to achieve widespread uptake if it is dependent on wearing some sort of hardware. Why is that?

    I think that whenever you ask people to change behaviours it makes it a lot harder for a market to succeed. Generally, people are resistant to change and when they do change they like their change to be very steady and slow. Moving from standard definition TV to HD and then 4K is a natural progression and easy to do because you don’t have to change behaviours very much, whereas if to experience something you have to put on an apparatus, that’s a bigger change.

    It also deletes the person next to you because it is fully immersive and I think people enjoy the reactions of those around them. If you think of going to watch a football match at a stadium as a visual spectacle, it is probably diminished because you’ve got a very limited field of view. But you have the aura of being with other people and their collective reaction. Or take the example of going to a concert at a stadium concert; you could say it is actually irrational because you can’t see the act except on a screen. You end up watching a very large screen, but because you’re immersed in a crowd of people, that makes the experience memorable. Deleting the collective emotional reaction would diminish the experience for a lot of people.

    You could say, “let’s do face to face meetings in virtual reality” but then if you’ve got an avatar, that’s not that person, so that again is a deletion of some of the experience.

    There are people who expect virtual reality to take off very soon, but for a hardware vendor to go into any new category you’ve got to have a clear addressable market.

    On the theme of wearable devices, you talked about health and the opportunity that exists for anyone who can capture the right data. What did you mean by that?

    Any form of data that can be tracked and aggregated could be very valuable for health services in terms of preventative medicine, but at present there is very little data on most people between the ages of 10 and 50. Smart watches, fitness bands, etc have to date mainly been adopted by the very fit, so their data tells us very little in terms of what is happening to the average person before they fall ill or suffer an injury.  Those people may subsequently adopt usage of a fitness tracker, as part of rehabilitation or recovery, but what we need is more tracking of people before they “break”.

    It is not impossible. With iOS you have the ability to share your data with specific apps and most of those apps are private companies, but they could also be national health systems. I think if you can communicate what the benefit would be of sharing data with them, it could be a great thing.

    For a national health system there is a fantastic opportunity to understand better how people really are from a health perspective, because we don’t know at the moment. There are vast gaps in our knowledge between the really fit people and the people who have already had a health scare. What’s the benefit of knowing that fit people are fit? The benefit is in knowing more about the people in between those groups to work out how to help them stay healthy.

    About the author

    Aoife is a Sync NI writer with a previous background working in print, online and broadcast media. She has a keen interest in all things tech related. To connect with Aoife feel free to send her an email or connect on LinkedIn.

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