Streaming Media
Self-driving cars may be a decade (or longer) away from the commercial mainstream, but the potential of a new mobile entertainment environment is too great for the automotive and computing industries to ignore. The in-flight entertainment (IFE) industry is being transformed too, with seat-back systems and BYOD for personal streaming using new satellite bands and 5G. Connectivity—and seamless connectivity at that—is the common denominator as the transport industry races to deliver on consumers' demand for interactive smartphone-style experiences wherever they go.
The importance of this potential and its money-making horizons was underlined at CES in January 2020. Keynote speakers included Ola Källenius, the global chair of Daimler and head of Mercedes-Benz, and Delta Air Lines CEO Ed Bastian—whose appearance marks the first time an airline representative has headlined CES.
In-Vehicle Infotainment
In-vehicle infotainment (IVI) is an emerging market that includes a combination of systems—such as head-up displays (HUDs) and transmission control units (TCUs)—that are used to deliver entertainment and information to the driver and the passengers through control elements and audio/video interfaces like touchscreen displays and voice commands. A 2017 MarketsandMarkets report estimates that IVI will reach $30.47 billion by 2022 from $15.2 billion in 2016. Research and Markets forecastst that IVI will total $58 billion by 2022. Intel suggests that autonomous driving will spur a new "passenger economy" worth $800 billion by 2035 and an eyewatering $7 trillion by 2050.
Intel's figures, composed with Strategy Analytics, predict that the time we all used to spend commuting will free up more than 250 million hours a year in the world's most congested cities. It splits the resulting bonanza into business (43% of the $7 trillion) and consumer (55%) categories.
Of the latter, Intel predicts an addressable market of $200 billion that will emerge as pilotless vehicles transform the "cabin" into an immersive entertainment platform. Scenarios 50 years hence painted by Intel include onboard beauty salons, fast-casual dining, remote vending, and mobile healthcare pods. Vehicles, it says, will become "transportation experience pods."
When fully autonomous vehicles go mainstream, it will present a new medium for creatives. "The in-vehicle experience is the most important differentiating feature for car manufacturers," says Ivan Dimkovic, senior solutions engineering manager and co-founder of Cinemo, a German IVI solutions developer. "Screen real estate will increase, and the general aim is to convert as much space as possible into some entertainment enabling device."
Seamless Connectivity
Rear-seat video content as part of IVI has been around for nearly a decade, primarily through discs and video stored on phones and tablets (BYODs). Live streaming arrived with 4G, initially through BYODs such as tablets. Recently, vehicles with built-in 4G connectivity and rear-seat entertainment units have become more prevalent—particularly in the luxury and multipurpose vehicle categories. Inside the car, media is distributed over 802.11 Wi-Fi along with capabilities such as Bluetooth.
"Most of the major technical barriers to delivering live streaming to a vehicle have now been overcome," says Neale Foster, CEO of ACCESS Europe, a software solutions provider. "The remaining issues are primarily around the functions required to produce consumer-friendly video experiences such as the [user interface], content caching, aggregation, and OEM [original equipment manufacturer]-branded IVI apps to deliver a seamless experience for front and rear seat requirements."
GENIVI, a group of automotive software solutions suppliers, has been exploring the technologies behind graphics-sharing and a distributed human-machine interface. According to executive director Steve Crumb, a number of approaches and technologies have been identified that allow the display of graphical content on any number of screens, potentially managed by different in-car systems or brought-in smart devices. These technologies, says Crumb, eliminate the "owner-slave" model of displays and allow for any system to "paint" content on any display available in the vehicle.
"Each automaker will determine their own approach to internet-enabled media, and the features, usability, and performance of media in the vehicle will be a factor in car choice, at least for some buyer groups," Crumb explains. "Buyers want seamless access to whatever media sources they use when not in the vehicle (which can be more often for younger buyers). So, what they have on their phones, they want seamlessly available in the vehicle."
Once the sources are there, the usability of the system (how simple it is to switch sources and find and play content) will be the next most important feature. "Expect the automakers with the most advanced natural language capabilities to differentiate themselves," Crumb says. "The performance of the streaming will also be important. Does the car stay connected and recover quickly when connectivity is compromised? 5G will help, but it may not always be available everywhere."
5G Game Changer
IVI will also act as a catalyst for a wider range of connected car services, such as automatic payment for parking, charging zones, and tolls; location-dependent services like localized advertising; breakdown and recovery; and real-time traffic and route guidance. All of these services will be improved by the greater bandwidth capabilities of 5G.
"5G is game-changing," says Dimkovic. "For the first time it will allow very high bandwidth while mobile even outside of urban zones to enable 4K UHD resolutions to vehicles."
Distribution in the vehicle could be point to point or redistributed using in-car Wi-Fi hotspots. Dimkovic's company, Cinemo, supports both. "The advantage of using Wi-Fi would be a big savings on bandwidth, but the decision is up to the OEMs," he says.
What happens when we journey beyond 5G's reach? In South Korea, that probably is possible even today. In Europe, connectivity will be patchy in the immediate future.
"We employ techniques like smart caching and prefetching algorithms, which can detect if an area has good coverage or if you are about to enter a tunnel, and will prefetch data so you can continue to enjoy entertainment with a poor network connection," says Dimkovic.
Live streaming in areas with no reception will continue to present an issue, but there are techniques to address this too. "We've built a streaming stack that tries to recover as fast as possible," says Dimkovic. "If we can prefetch 30 seconds, we can build a buffer to iron out low connectivity spots. If you end up with a zero signal, we ensure the restart will be as fast as possible without [artifacts]."
The next generation of cars might enable the download of video for offline playback while traveling. It is also thought that the nature of driving journeys of different durations—city hops to longer commutes—will necessitate a different type of media. Audi calls the newly recoverable time the 25th Hour and theorizes that media formats like film are compromised by travel—in much the way we have to end a movie on an airplane when landing. "Video services will begin to be edited on-the-fly to provide content and information tailored to an individual's journey and interests," suggests Foster.
Shift to Mass Market
IVI is now a major selling point at the premium end of the market. Tesla announced that its infotainment displays would enable YouTube and Netflix streaming support, although company boss Elon Musk suggested this would only be possible initially while the vehicle is stopped, indicating that safety regulations were the only thing standing in its path.
Multipurpose vehicles are also building in IVI as an option. In the midrange to budget market, though, most IVI is an after-market purchase or fulfilled through BYODs, but it's also where the biggest shift will occur.
"The goal is to provide a better-than-home experience in terms of the type and variety of content," says Foster. "This will span video, audio, and game streaming. The video element will include [video on demand], tailored short-form content, and services. Users will be able to build their own IVI content bundles—or take their existing home bundles and extend it to the car in a ‘follow the subscriber' model."
The confluence of different trends—electrification, autonomous driving, and car-sharing models—means the amount of screen time that passengers spend in vehicles will increase dramatically to watch movies, play games, and do work. Its why developers like Cinemo are investing in the cloud. As soon as autonomous driving gets the regulatory greenlight, video will be switched on for the driver too.
"When it comes to the experience itself, OEMs want it to be first class," says Dimkovic. "The car is not a cheap investment. 4K, 7.1 audio, and multizone (isolated streams for different passengers) must be enabled, no matter how many displays. Users should also be able to share content seamlessly while the system respects content protection rules from content providers."
With data from Counterpoint suggesting that 75% of cars will be connected to the internet by 2025, the vast majority using 5G networks, that's potentially a billion IVI monthly subscriptions up for grabs.
In-Flight Connectivity and Entertainment
In-flight connectivity (IFC) is set for takeoff. After decades of high equipping costs during which passengers were reluctant to pay high prices for unreliable performance, airlines are optimistic that a new wave of technologies, moves to standardization, and the consolidation of operators with connectivity providers have potential to launch untapped revenues.
Wi-Fi in the sky has historically fallen far short of expectations on reliability, speed, and coverage. That's increasingly marked as passenger interest has shifted from data to voice, from talking to browsing either using the onboard IFE systems or their own devices. In short, there is latent demand to make cellular and Wi-Fi connectivity as seamless and high speed in the air as it is on the ground.
Only a quarter of commercial aircraft currently offer IFC of any kind, according to U.K. satellite communications specialist Inmarsat. This is why broadband-enabled in-flight revenue was only $900 million in 2018 compared to revenue from other "ancillary" sources like in-flight retail, baggage fees, and ground car hire, which is estimated to hit $134.8 billion in 2020.
And yet, according to "Sky High Economics" a report created for Inmarsat by the London School of Economics (LSE), broadband-enabled revenue for airlines could reach a stratospheric $30 billion by 2035. This figure includes potentially lucrative deals with partners, advertisers, and sponsors, whom Inmarsat assumes won't wish to be associated with substandard onboard connectivity.
The entire commercial airline industry wants to reach this destination, but different groups are taking different routes to get there. The Seamless Air Alliance (SAA), which counts Delta Air Lines, Etihad Airways, OneWeb, Panasonic, Sprint, and Airbus among its members, thinks the answer lies in promoting open standards. Building every aircraft the same way can lower the cost of manufacture because standards allow airlines to plug and play equipment rather than custom-install every wire and rivet. Integration of connectivity products includes suppliers of airplanes and airplane radios, Wi-Fi, and IFE. The SSA has published specifications that cover network architecture, onboard radio access, and authentication and regulatory constraints.
A study released by the SSA in March 2019 concludes that technology standardization could increase the value of the IFC market by $11.4 billion. Inmarsat, which is not part of the SSA, comes up with a similar figure. It believes that greater digital connectivity in flight diagnostics, airline manufacture, and flight disruption management could deliver efficiency savings (in fuel as much as anything) of $15 billion a year by 2035.
Encouraging BYOD benefits airlines that are looking to divest themselves of the cost and weight of outfitting aircraft with seat-back screens. The SSA wants to create industry standards that enable travelers on any flight to go online with their own devices—without struggling through complicated sign-ups or costly paywalls.
Monetization is the other big challenge. The LSE/Inmarsat report predicts that broadband-enabled ancillary revenues will derive from four main areas: in-flight broadband upgrade charges, ecommerce with real-time offers, advertising, and premium content. The latter is in line with wider trends and could bring in $1.4 billion in revenue (of the $30 billion total) by 2035. Getting there means offering premium on-demand content not already available via the IFE system—streamed to the aircraft rather than already installed on it.
Another monetization option is W-IFEC (wireless IFE and connectivity) bundling, in which IFC purchase is a precondition to access premium streamed entertainment on BYODs. Inmarsat calls this an ideal model for short-haul carriers without embedded IFE systems.
The third monetization option is live entertainment. The obstacles to this may seem far more challenging than those for on-demand, but Inmarsat has demonstrated the possibilities. In September 2019, a Singapore Airlines plane flying at 35,000 feet broadcasted a live interview for Sky Sports with the Alfa Romeo Formula 1 racing team. Signals were relayed over Inmarsat's Ka-band GX Aviation satellites to a SITAONAIR portal, which acted as a mobile hotspot onboard.
Inmarsat contends that airlines haven't got connectivity right to date because they lack global, dedicated coverage. It says, "Instead, their providers rely on leasing capacity across a patchwork of satellites from multiple operators, the vast majority of which are dedicated to services other than aviation. The nature of this stratospheric quilt means that as planes try to disconnect from one satellite network and connect to another, airlines risk those signal drop-outs that are so frustrating for passengers." Inmarsat will be launching a series of satellites in the Ka band in 2023 that are capable of delivering thousands of spot beams simultaneously to increase capacity per aircraft and offer global coverage.
Satellites remain the primary means of delivering in-flight high-speed broadband. OneWeb and Airbus have developed OneWeb constellation, which comprises hundreds of low-Earth-orbiting (LEO) micro-satellites. They orbit 2,000 kilometers above the Earth rather than the 36,000 kilometers at which geostationary satellites operate. OneWeb claims this proximity will shorten data-transmission times and provide faster connectivity not just to aircraft but to ground cells as well. These satellites are key to helping bring 5G to the skies, and OneWeb and Airbus aren't the only organizations that are looking to take a lead.
In-flight broadband connectivity company Gogo plans an air-to-ground (ATG) 5G network launch in 2021 across the U.S. and Canada. Its partners, Cisco, Airspan Networks, and First RF Corp., will be responsible for onboard system hardware, software, and antennas, including a proprietary modem.
The network's Air5G platform will provide 5G virtualized-RAN (radio access network) base station technology that uses Massive MIMO (multiple input, multiple output) antenna arrays for increased capacity. Gogo says in a press release that the platform also "features advanced beamforming and tracking techniques, capable of communicating with an aircraft travelling in excess of 750 mph, at long range, all while providing an enhanced mobile broadband 5G experience."
Gogo further explains that "belly-mounted airborne multi-band antennas" will connect its onboard 5G system to the Gogo 5G network on the ground—which already consists of more than 250 cell towers. Gogo will continue to employ its 3G and 4G networks as backup to the 5G network.
In concert with arguments for 5G's terrestrial impact, a 5G ATG network should deliver operational advantages, including lower OpEx and lower latency.
Network slicing, another familiar 5G concept that dedicates bandwidth for applications, is expected to be used for 5G ATG connectivity. The SSA says that aeronautical broadband radios facilitate network slicing through controls being developed by groups such as standards body SAE (Society of Automotive Engineers) International.
Connectivity providers are battling for airline customers. "Sky High Economics" suggests that those who make the leap now by investing in connectivity will be able to grab a piece of a market it values at $33 billion purely in terms of passengers electing to pay for journeys that offer superior IFC. Today, states the report, 12% of less-engaged passengers are willing to switch allegiance to an airline that offers reliable Wi-Fi.
This demand will only rise as the first truly digitally native generation, Generation Z (born between 1997 and 2012), becomes the largest group of air passengers in the next decade, growing the value of loyalty to $45 billion—and that's on top of the $30 billion in upgraded broadband-enabled revenues.
Airlines in Asia-Pacific have the largest growth potential. Of the $30 billion estimate, $10.3 billion is pegged to Asia-Pacific, $8.2 billion to Europe, and 7.6 billion to North America.
Despite global concerns over air-travel carbon emissions, Inmarsat projects air traffic to double by 2035, when there will be 7 billion people in the air annually. That's a lot of capacity that will need to be filled.
"Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content, and e-commerce packages," says Alexander Grous, author of "Sky High Economics." "Broadband-enabled ancillary revenue has the potential to shape a whole new market, and it's something airlines need to be planning for right now."
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