January 23, 2020

5G Impact on Content, Media and Advertising Monetization

Mobile Time and Media Spending Shifts Are Key to Driving 5G Innovation

In a recent blog post titled “Monetizing Premium Video Content over 5G,” we highlighted the strong consumer appetite for video content and live events, particularly sporting events, showcasing some early 5G benefits: 4K video; near real-time live streams; and immersive virtual reality (VR), augmented reality (AR) and 3D capabilities. We know by now that 5G has the potential to deliver faster, higher quality content and more interactive and immersive experiences across an increasingly wide array of device types.

These benefits, when coupled with faster ad load speeds, more consumer touch points (IoT, smartphones, cars, public surfaces) and better data for targeting (e.g., AI, location, etc.) will enhance consumer content experiences, opening up better advertising and monetization opportunities. So, it comes as no surprise that 5G is ripe for business model innovation by communications service providers (CSPs) and mobile network operators (MNOs) as well as media and entertainment industries and advertising companies.

5G stands to impact monetization opportunities for a host of players across the ecosystem. For CSPs and MNOs, this affects core 5G network services, customized bundling of digital features and services, and content and advertising. However, realization of 5G potential and associated revenue opportunities will have to fall in step with network build-out, services commercialization and device seeding timelines, as well as associated advertising delivery and measurement capabilities.

We saw this as consumer media consumption shifted to smartphones and the advertising dollars went with it. Total digital ad expenditure in the United States (US) was expected to reach US$129.34 billion in 2019 – or 54.2% of total ad spend – with mobile representing more than two-thirds of that spending –  or US$87.06 billion (eMarketer). 5G networks will only further enable this new capacity to innovate and add value to mobile advertising.

5G Impact on Business Models

The delivery of lower-latency, higher bandwidth connectivity at decreased costs should enable new business models to flourish in 5G. These models will evolve over time, influenced by the commercialization of 5G capabilities, associated cost structures and B2B/B2C ecosystem participants. There are a few indications as to how this might impact business in content, media and advertising based on existing models and what 5G might enable:

  • Immersive, interactive entertainment experiences could be integrated at a variety of public venues. Sporting events, concerts, and festivals could have AR, VR, and 3D incorporated into the in-stadium and/or live-streaming consumer experience, and the venues, along with CSPs, content owners/rights holders, tech companies, brands and advertisers could participate in digital monetization opportunities.
  • Telcos could avail data/intelligent advertising analytics capabilities to others, or leverage it themselves for their own advertising efforts, including capabilities enhanced by 5G (e.g. AI, location).
  • Mobile AR/VR capabilities integrated with location could provide advertising/marketing opportunities for nearby brick-and-mortar retail, restaurants, etc.
  • We can even look to the gaming sector to leverage 5G capabilities to drive new experiences and ways for consumers to pay for it with ad-supported business models.

Enabling CSPs to Participate in Emerging Business Models

The CSP position in 5G is front and center, what with network connectivity, digital features/services, and content and advertising all becoming part of a new monetizeable platform. As we look to the market leaders to leverage 5G network capabilities to capture new revenue share, it will be the CSPs that leverage both BSS and OSS to deliver customized bundles and digital services personalization who will see the most success. Supporting and reaping the complexity of advertising-supported business models only adds to the revenue potential upside.

To learn more about 5G impact on content, media and advertising monetization and how Netcracker can help you create an end-to-end monetization environment that helps maximize the value of services that 5G networks can offer, check out our offering page.

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