Preparing for the Hybridverse: Mixed Realities and Diversified Business

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As we know, the future of live entertainment is exclusive, multipurpose, and hybrid — a blend of the real and digital worlds. Less clear perhaps is what Media & Entertainment companies can do about it.

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“Only some streaming services providers are big enough to compete globally,” Deloitte concludes in its latest global look at the macro trends impacting M&E. It predicts more M&E activity from consolidation among the largest players while smaller providers may need to decide whether they want to compete as content aggregators, or instead become pure creators selling original content to the leading services.

Large studios also need to determine if they are suited to being content aggregators and streaming providers, or if they should focus on content development and licensing.

Certainly, reliance on a single line of business could become “increasingly risky,” the analysts say, with one strategy being to expand portfolios across entertainment categories to access younger audiences with new social media and gaming offerings.

“By the end of this year, top streaming providers might look more like digital platform companies, with premium SVOD and advertising-based video on-demand (AVOD) capabilities, user-generated content, gaming properties, and social integration.

“This evolving business model will likely test the willingness of shareholders to underwrite expansion, so pressures on profitability may become even more significant.”

The need to diversify lines of revenue holds true in the live events space too — notably physical venues like sports arenas. Here, Deloitte recommends opening up to experiences (such as meet-and-greets), live perks (like giveaways), or digital experiences (supplemental AR/VR capabilities).

“Interactive mobile experiences, such as AR/VR experiences, gaming opportunities, or deals and promotions, could be accessed exclusively by in-person attendees — before, during, and after the event — to supplement the experience." 

Indeed, those companies and venues that can “master the art of integration” stand to benefit the most because of their ability to cater to the broadest population of consumers.

“Experiences that embrace a hybrid approach, integrating in-person experiences with options like remote viewing, live streaming, and virtual co-presence, can appeal to both those who can’t wait to leave home, and those who’d prefer to stay within their own four walls.”

“Experiences that embrace a hybrid approach, integrating in-person experiences with options like remote viewing, live streaming, and virtual co-presence, can appeal to both those who can’t wait to leave home, and those who’d prefer to stay within their own four walls."

A revamping of business model also means considering how pricing tiers, paid content, and loyalty programs can help companies reach larger audiences and retain them longer.

In this regard, a key trend highlighted in the report is that of “shoppable media” — described as an interactive buying experience sitting at the intersection of content and commerce.

Digital commerce spaces such as mobile apps and websites are prime real estate for shoppable content; one click, in-app purchases, for example.

“Video streamers who enter this realm might be forced to make significant investments in infrastructure and technology that enables a seamless and integrated shoppable media ecosystem on their existing platforms. It may require rethinking integration across content, buying supply chains, and payment systems.

“And with the rise in popularity of AVOD services, shoppable media could be integrated into advertising models and interactive ad formats to bolster engagement and sales. This tactic could be especially important for retaining audiences that might otherwise wander off to social media or gaming,” Deloitte suggest.

“More broadly, shoppable media may shift the commerce ecosystem to favor smaller, more nimble creators, rather than more established brands. M&E companies that are willing to adapt and reinvent may be first in line.”

Nonfungible tokens play a strong role here in blending content with commerce and the virtual with the real.

“NFTs’ ability to bridge the physical and digital worlds is why they’re increasingly seen as part of large-scale emerging trends like Web 3.0 and the metaverse,” Deloitte continues. “In 2022, NFTs could evolve from a novelty into a utility. As social media becomes increasingly shoppable, NFTs could prove to be the key element in bringing scarcity and exclusivity to the internet.”

More content creators will likely experiment with NFTs to sell directly to fans while innovating on the kinds of additional value they can attach to the asset. Music labels and rights holders could advance efforts to understand how NFTs, and the blockchains that support them, may impact their business models. Gaming companies will likely continue experimenting with NFT virtual goods while eyeing a future of blockchain-based “play-to-earn” games.

Deloitte pushes back on the all-consuming drive to “the metaverse” as a “seeming eventuality that could take some time to fully realize.”

The consultancy thinks “money and hype will animate ‘the metaverse’ [through 2022], summoning the potential future of a 3D digital ‘place’ where people meet and interact through digital representations of themselves.” But Deloitte also believes that since the term is so encompassing and potentially transformational it will likely continue to suffer from generalization and speculation.

“For that reason, companies and investors should be cautious and disciplined in evaluating near-term metaverse opportunities.”

Trends like shoppable media, virtual meetings, social camera filters, motion capture, AR for clothing and furniture shopping, spatial computing, immersive learning, and an array of brand and enterprise experiments in AR and VR could all converge toward a metaverse.

“However, to become reality, they would require significant adoption, standardization, and interoperability, while establishing greater trust and safety.”

 

Qatar 2022: BBC and ITV share Timeline TV as joint facilities provider for World Cup coverage

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Qatar 2022 is the 15th consecutive FIFA World Cup that BBC and ITV have broadcast together, continuing their long-running and hugely successful partnership, but this is the first time they have shared back-end resources.

It is a measure of how much the technology and the economics of live broadcast have changed since the World Cup’s last outing in Russia that both free to air broadcasters felt able to rely on a remote and shared production infrastructure just four years later.

It speaks to the albert-certified environmental policies that both broadcasters have pledged to undertake with their programming as much as to the financial advantages to be had in sending fewer technical and crafts personnel out to the Middle East for a month.

“Neither broadcaster could have gone ahead with such an ambitious production plan without the other,” says Phil Bigwood, executive producer, BBC TV Football, for whom Qatar is his sixth World Cup production. “It’s been a major plus in enabling us to put more facilities in the UK and to share technical crew. We share connectivity and access to the FIFA server and elements like that to help with workflows.”

Joint technical effort

Timeline has been hired as the facilities provider for the joint technical effort. It has outfitted studios at each of the eight stadia, equipped a production gallery at the IBC in Doha and rigged another at HQ3 in Dock10 for the BBC. Both are being remote controlled from hardware located at Timeline’s truck parked in Salford. All sound, graphics, VT and vision is mixed and operated in either gallery using surface panels.

Timeline is also providing core technical crew to both broadcasters including a unit manager, camera lead and sound lead at each venue working with key production personnel such as directors hired by each broadcaster. Both broadcasters are taking the full package of HBS feeds augmented by unilateral camera teams on the ground and separate match day directors.

“Presentation is clearly different but whether ourselves or ITV are going to air with the same camera team should make no difference to the audience experience,” Bigwood says. “There was quite a strong financial consideration to having two galleries. As the tournament progresses into the last sixteen and beyond we won’t want to keep two galleries and all staff in place.”

After the World Cup draw in April the broadcasters divided their match split. “ITV had first pick this time since we had it in Russia,” Bigwood says. “Broadly, the bigger matches will be directed from Doha where the lead editorial crew is closer to on-air talent. There are also certain occasions where there are back to back matches and simultaneous matches where we could not produce it all out of one gallery. So we alternate between the two.”

Remote production

With 20-plus feeds being shuttled over redundant fibre lines from Doha to Manchester and back again, the latency was going to be critical. After multiple tests in prep, they were confident of keeping this to well below a second.

That is different on streams to iPlayer and ITVX where the BBC has felt the need to explain the noticeable delay over that of a live to TV broadcast. It fielded a blog by BBC R&D talking about the industry-wide issue of live streamed latency and the efforts the BBC itself has made to counter and improve this.

Neither broadcaster has chosen to present with an expansive virtual studio. Largely this is a cost cutting exercise but also one that emphasises the ‘at-the-game’ nature of their pundit and presenter style coverage.

Bigwood says: “The studio is literally in a box at each stadia and because of that and the intense match scheduled in which we have to derig the BBC set for ITV to rig theirs and so on there is not the time to rig a full augmented reality set.”

The coverage is drawing big numbers with over 16.59 million TV viewers watching England’s 3-0 win over Wales on BBC One. That figure does not include the number who watched on Welsh language channel S4C or viewers watching on iPlayer (neither included in Barb’s data). The BBC said its match coverage across all its platforms – TV, iPlayer and BBC Sport Online – was watched by a peak audience of 18.7 million.

ITV commercial teams will be hoping for a huge ratings boost when it hosts coverage of England’s round of 16 match with Senegal on Sunday 4 December.

The UK broadcast rights to the next World Cup in the US, Mexico and Canada 2026 have yet to be signed with FIFA, although ITV and the BBC will show both UEFA Euro 2024 and UEFA Euro 2028 under a new deal agreed with UEFA.

More than a decade ago, both UEFA and FIFA failed at the European General Court to reverse the UK’s free-to-air protection for all matches at the men’s European championship and World Cup.

FIFA is anticipating revenues from broadcasting rights of more than £1.9 billion in 2022.

 

Why Big Tech Wants to Control You Within the Metaverse

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In the near future, the metaverse will create an immersive barrier between the user and the natural world by mimicking and extracting content from the brain’s spatial memory networks.

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That’s a problem, if you believe neuroscientist Joshua Sariñana, who argues that our brains are being hacked by corporations like Meta who want to continue to exert mind control on our behavior in the 3D internet.

Seems far-fetched? Sariñana says this is already happening now and you don’t need Elon Musk’s Neuralink system, a physical brain-computer interface, to do it either.

It’s tactic that’s been massively successful when used against the dopamine reward system.

Dopamine, explains the Harvard Review, can provide an intense feeling of reward. Sex, shopping, smelling cookies baking in the oven — all these things can trigger dopamine release, or a “dopamine rush.”

As does our need to collect likes and followers on social media, Sariñana argues in an essay posted to Medium.

This feel-good neurotransmitter is also involved in reinforcement. That’s why, once we try one of those cookies, we might come back for another one (or two, or three).

As the Harvard Review points out, the darker side of dopamine is the intense feeling of reward people feel when they take drugs, such as heroin or cocaine, which can lead to addiction.

Sariñana says big tech companies like Google and Meta long ago worked out that neuroscience-inspired algorithms that combine spatial memory and dopamine reward prediction may be the future of social media.

Think of Pavlov’s dog. Ring a bell and pair it with food; the dog will learn that food comes whenever they hear a bell. Humans are the same. When a cue, like a bell or a computer chime, predicts a reward, the brain learns to release dopamine to the cue rather than to the reward itself.

“It’s not hard to see how a person’s phone, app icon, or some notification (even being bored) gets you to habitually check your phone because there might be some unexpected comment, heart, or video.”

In fact, there’s a link between dopamine and social app use.

Media technologies manipulate the brain’s dopaminergic system to get people to habitually respond to cues for engagement. Sariñana says researchers have validated that these Reinforcement Learning models are reflected in the behavior of social media users.

People strategize their posts to maximize their digital treats, that is, their likes, he says.

Now those researchers are training their energies on mapping the spatial awareness of the human brain to guide an AI that will prompt, guide and ultimately control what we see, experience, feel and interact with in the metaverse.

For example, a region of the brain called the hippocampus, builds our perception of context (e.g., the room you’re sitting in right now, the train you’re riding on, the queue you’re standing in) and is critical for our ability to generate spatial maps — a GPS of the mind, if you will.

“We navigate our contexts to build a mental map as we encounter new experiences. Through these processes, the hippocampus quickly integrates new information into its network and builds future models of the world (i.e., imagination).”

Sariñana reports that Google’s DeepMind co-founder, Demis Hassabis, has written extensively on the need to combine neuroscience and AI. His company is actively researching the hippocampus, and using algorithms to figure out how it quickly pulls new information into its memory network.

They have trained their RL models to simulate virtual navigation, and have combined spatial memory and RL models to show how the hippocampus predicts the future.

Figuring out where a person may want to navigate to, what they may engage with, and how they decide what to purchase is what marketers want to know when they pay Meta to align users’ attention and actions with their ads, Sariñana says.

And here’s where it gets sinister.

“The GPS of your mind will be turned inside-out and siphoned with other biometric data to support digital phenotyping.”

So-called Digital phenotyping uses sensor information from your smartphone and wearables to capture moment-to-moment behavior to train predictive algorithms. With this biometric data and electronic health records, AI technologies can predict mood and psychiatric states like depression, anxiety, psychosis, and mania.

“Already, facial expressions can accurately predict post-traumatic stress disorder (PTSD), depressive symptoms can be pulled from your texting speed, and your brain wave data can be inferred from your smartphone use; all of this information will be sewn into the fabric of your everyday habits.”

The net result is that by combining our spatial memory information, RL reward behavior, and extracted biometric data, these new AI algorithms “will all but drill into the user’s mind and go beyond symbiosis.”

Sariñana says, “The metaverse will act more like a parasite that trains its algorithms on user data, altering the path of human perception and imagination.”

Enjoy the future.

 

Discovery Phase: The Dream of a Universal Content Search

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The number of shows launched on streaming and linear TV continues to rise, and viewers have had enough. According to the new annual Hub Research “Conquering Content“ survey, more than half of consumers believe the volume of shows makes it hard to know where to begin.

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The number of new scripted TV shows alone introduced to streaming or cable/satellite services this year alone is nearly 550 — and trending upwards.

At the same time, the number of people clamoring for some form of universal search for content is climbing from 55% a year ago to 61% of those polled by Hub this year.

But current universal search listings and interfaces are underperforming. Per the report, 48% of households with a universal search capability are only using it about 40% of the time.

“That suggests that some providers, like smart TV manufacturers who utilize universal search methods, need to do a better job of making those search features easier for their customers to find or use,” says The Streamable’s David Satin. “Scrolling through streaming services looking for the same show can cause customer frustration, and may even lead to some cancelling their services when they cannot find the show they want.

When it comes to picking new shows to watch it seems that trailers remain a pretty effective way for producers and service providers to cut through the noise. Almost two thirds of us are more likely to choose a show if we can watch a trailer first, with three quarters of those (much higher than last year) who discovered a new favorite show via a trailer saying it ran automatically.

Perhaps unsurprisingly, most viewers still watch their favorite shows on streaming platforms, but streaming’s share over cable and broadcast has stagnated in 2022.

According to Hub’s numbers, the percentage of respondents who said that their favorite show came from an online source has plateaued at 75%, the same figure as 2021. Meanwhile, the number who said their favorite show was from a traditional source — also known as multichannel video programming distributors (MVPDs) — ticked up slightly from 21% last year to 23% this year.

Of the 10 most frequently named shows that viewers identified as their favorites, four of them — including three of the top five named — are available on live, linear TV: Paramount’s Yellowstone, House of the Dragon on HBO, and Ghosts and NCIS, both on CBS. “Insert overused expression here: ‘content is king,’ etc. But cliché or not, it’s clear from these results that viewers will happily go to whatever platform has exclusive rights to the most popular TV shows and movies du jour,” Hub principal and report co-author Peter Fondulas said. “Over the past few years, those shows have been increasingly offered by streaming services. But as franchises like Yellowstone and Game of Thrones demonstrate, streaming does not have a necessary monopoly on buzz-worthy content.”

 

Viewing Behavior is Changing and Here’s How Video Providers Can Adapt

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Although home entertainment is generally robust during economic uncertainty as people cut back on going out, inflation is impacting the video market. According to analyst Kantar in its year-end “Media Trends and Predictions” report, advertisers are advised to adapt spend accordingly.

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Kantar data shows that market penetration for AVOD grew from 20% in Q2 2021 to 23% by Q2 of this year. Its latest study witnesses a clear trend for consumers cancelling some SVOD services to save money and a greater acceptance of advertising. The timing is right, says the analyst, to introduce ad-funded tiers to limit price-sensitive churn.

According to Kantar the winners in the platform wars will be those deploying “windowing strategies” that strike a balance between VOD and linear.

Broadcasters are adopting the aspects of VOD strategy that best fit their positioning while preserving their points of difference. Meanwhile, VOD platforms are adopting traditional concepts like appointment TV and curated content discovery via linear channels.

The market will shift away from all-at-once release strategies and box-set binging for new content in order to maximize revenues.

But there’s a caveat. “Ad-models risk creating two types of viewers: those with less disposable income who become over-targeted by ads, and those with more disposable income, yet are harder to reach.”

The World Federation of Advertisers forecasts average inflation of 10% for advanced TV in the US in 2022 — a concept that includes addressable, connected TV streaming and VOD — compared to just 3% in 2020.

The WFA also reports high inflation for social videos. Paid social CPMs have also risen steeply since the start of the pandemic, up 33% between Q4 2019 and 2021, the report notes, with expectations that it will remain high over the medium term.

There’s even evidence of media agencies restructuring their teams to remove TV and digital silos to operate in a more holistic manner, in tune with the reality of a complex and growing AV ecosystem.

“As advertisers seek better value for their marketing investments against inflated costs, and as audiences splinter across devices and platforms, media agencies will need to adapt,” Kantar advises.

This is likely to mean further investment in digital skills with an emphasis on tech, data, analytical and mathematical experience, and potentially restructuring teams to take the necessary holistic approach to video planning that merges linear broadcast with online video.

“It will also require discarding rivalries between digital and AV teams and an end to siloed channel planning.”

Dynamic Product Placement Edges Closer

Dynamic product placement — enabling a product, billboard or screen featured within content to be substituted or overlaid with a different brand or advert — is growing. Like addressable advertising, with the right data different viewers could be shown tailored ads.

“However, technological possibilities will need to be balanced against what’s acceptable to audiences,” Kantar warns. “A negative impact may be inadvertently achieved if a placement is clearly anachronistic, jarring or out of place. Tailored content should be closely monitored.”

Growth in Smart TV Use

Kantar reckons we’ve now reached the tipping point in smart TV saturation and usage, with consumers increasingly using their TV to stream content directly, connecting via apps and inbuilt IP services.

“Indeed, data from the researcher’s ComTech tracking study shows that across France, Germany, Great Britain, Italy, and Spain 64% of households own a smart TV.”

Smart TVs are not only being used, but they’re increasingly becoming a preferred screen for viewing streamed content. In December 2021, 88% of video streamers used their TV to access content across the US, Germany and UK.

Kantar notes that, “As video delivery moves towards an all-IP future, smart TVs will have a critical role to play as the main entertainment gateway into the home.”

The Metaverse is a Media Channel

Despite the hype, the metaverse has not yet made huge inroads. However, Kantar’s study suggests it will be a high riser for marketing activity in 2023, with more thought being given to creating immersive brand experiences, virtual product testing, and branded NFTs to use within metaverse environments.

Starting from a much lower base in budgeting, the metaverse sources the fourth highest increase in budget changes for marketers.

Ahead of the metaverse in this respect — though clearly linked through platforms like Fortnite and Minecraft — is gaming. With almost 3.2 billion people playing video games in 2022, spending a combined total of $196.8 billion, Kantar highlights a growing opportunity for brands in this space.

Creative agencies are leaning into the biggest and most visually striking games to reach new audiences and add gaming. Kantar advises broadcasters to consider adding platforms like Twitch to the media plan.

 

Banking on the Business of the Metaverse

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Business leaders are being educated in the metaverse and told it could offer multi-trillion-dollar opportunities in the long term.

“From firefighting to filmmaking and manufacturing to medicine, virtual worlds have the potential to transform many aspects of daily life,” The Economist narrates in a new video, “How will businesses use the metaverse?”

The august financial publication has brought together a number of opinion formers to talk about the 3D internet evolution. Among them is Rob Bredow, chief creative officer at Industry Light & Magic (ILM), discussing virtual production [01:22].

The ability to generate realistic computer-generated worlds in real time is not only upending the finances of conventional production in Hollywood, but the graphics software behind it is the driving force of metaverse creation in every industry. Game engines can now create and apply a simulated world’s rules, logic and physics in real-time.

Rick Famuyiwa and Jon Favreau, both executive producers and directors on The Mandalorian, also share their insight [04:09].

“You can get in-camera finished VFX that can help us with the quick turnaround that television requires,” Favreau says.

We learn that about half of the shots produced on ILM’s volume stage go straight into the show, while half still need some refinement in post.

Metaverse sage Matthew Ball is on hand to describe what the metaverse actually is.

“Most big tech leaders imagine it as a parallel plane of existence, a 3D virtual simulacrum of the Earth, but with many fictional elements allowing us to do the impossible,” Ball explains [02:30].

Gaming platform Roblox is highlighted for enabling startup developers to make a business outside of the traditional giant gaming companies. Tami Bhaumik, VP of marketing at Roblox, talks more about this during the video [09:51].

Three-quarters of American kids aged between nine and 12 use Roblox, as do half of 10-year-olds in Britain. With that kind of popularity, the platform has caught the attention of major global brands. “The metaverse has found its place in the cultural zeitgeist even if nobody knows what its final state will look like,” the narrator says.

NVIDIA’s Richard Kerris also explains digital twins [12:15] — a true-to-reality simulation of a physical environment. “The way to think of it is like the operating system for the metaverse,” he shares while explaining his company’s Omniverse digital twins developer platform.

There is a potential problem, though. As of yet, the metaverse lacks an agreed standard for connecting multiple virtual worlds — like the missing HTML protocol.

“When we think about the metaverse as a 3D elevation of the internet we require the same sorts of structures,” Ball says [14:33]. “New hierarchies that allow one virtual world to know that another exists to then communicate and securely and consistently share information but almost none of that exists today.”

The race is on to develop the metaverse’s equivalent of HTML.

Kerris comments how, “The thing that makes the metaverse so impactful for everyone is the seamless ability to go from virtual world to virtual world in much the same way today we go from web site to web site.”

The Economist shares that Pixar may have helped provide the answer in the open-source tool, Universal Scene Description (USD). “It remains to be seen whether USD will become the universal protocol of the metaverse.”

The video also looks at mixed reality wearables, including augmented reality headsets as used by the US military and supplied by Microsoft in a $22 billion deal [16:26]. Medical care is also shown to benefit from AR devices used in surgery, something that is rapidly becoming routine.

These new technologies are likely to unlock new human behaviors and consequently, to unlock new revenue — but no one really knows yet what these might be.

As the metaverse grows, so do challenges. Some similar to massive improvements in computer power. And yet, despite all of its potential, The Economist warns that the metaverse is likely to share the pitfalls of the real world.

Neal Stephenson: The Success of the Metaverse is Contingent on Content

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As someone who coined the term the “metaverse,” what does author Neal Stephenson think of the nascent metaverse today?

“In general, when people talk about the metaverse they talk about the next thing. If it exists today, it is largely a pre-metaverse,” he tells a16z podcast host Steph Smith in a recent episode. The exceptions, he says. are games like Roblox.

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 “If I see someone talking about our metaverse I don’t think they get it. But if they talk about building something in the metaverse it gives me more of a warm feeling about what they are doing. Because to me, there is just one metaverse. That does not mean the same thing everywhere. It is an incredibly diverse range of experiences, but you can always get from one to another by moving around within a single unitary space.”

As to whether interoperability is actively being developed by companies like Meta, Epic Games, Microsoft and others, Stephenson says the game developers and crypto evangelists don’t speak the same language.

“It’s an abomination to bring a lightsaber into Assassin’s Creed,” he provides as an example. “Game developers are insulted by this type of aesthetic mash-up of their creations.”

On the other hand, “other games like Fortnite and Minecraft are creative mash-ups by design,” and show the kind of metaverse imagined in Snow Crash.

When it comes to experiencing the 3D internet with VR headgear, he is not a fan. “I like to have an intense experience for half an hour, like a TV show, and then you stop,” he says. He doesn’t like being socially isolated or unaware of the physical world around him. “For all-day gaming binges I don’t think it’s for me.”

Stephenson worked at Magic Leap as a “futurist” for a while, and says most of his time was spent building content applications for audiences. “You are building an experience in a game engine and for it to work the environment has to be populated by imaginary entities and things that are in the user’s environment that are identified by machine vision [on the headset] and recreated in the virtual world.”

There’s a loop running all the time where the cameras and sensors on the device are scanning the real environment and building virtual assets in the metaverse.

After discussing the changing value chain of content creators and the impact that smart contracts royalty and copywrite have on blockchain and generative AI text-to-image tools like DALL-E, he moves onto his own fronted blockchain enterprise: Lamina1.

“Making things that work for successful creators is the key to a successful metaverse because nobody will use the metaverse unless there are experiences there that are worth having. Those people are by and large those who work in the games industry today. We think there’s an opportunity to make a new blockchain that works for content creators that integrates with their toolsets so they don’t have to become crypto experts in order to do their jobs.

He adds, “Lamina1 is a proposal to hook Web3 smart contracts into creator tools so that content creators are rewarded for producing experiences that people will pay for.”

Lamina1 is intended to be carbon neutral by using a proof of stake system. He admits that, to some levels, we are still responsible for putting carbon into the atmosphere. So they’re going to design the system with carbon credit offsetting.

“There are multiple ratings agencies for carbon credit schemes. We’re also pursuing more far out ideas related to carbon sequestration — but these are in the gonzo, probably won’t work phase.”