What does it mean if, by 2020 global mobile data consumption on smartphones overtakes fixed-broadband data consumption, as researchers at Ovum now predict? It depends. What happens if the global media industry gains $765 billion in cumulative revenues from new services and applications enabled by 5G ($260 billion in the US and $167 billion in China)?
Can 5G cause annual mobile media revenues to double in the next 10 years to $420 billion in 2028 ($124 billion in the United States)?
As with all forecasts, assumptions are everything. Ovum researchers assume 5G will unlock augmented and virtual reality applications that will create more than $140 billion in cumulative revenues between 2021 and 2028 ($32 billion in the United States).
Mobile display advertising will reach $178 billion worldwide by 2028 ($66.6 billion in the United States). Ovum researchers believe 5G will have a fundamental role in transitioning traditional display advertising toward social and media immersive experiences.
Also, 5G mobile games revenue will exceed $100 billion annually in 2028 ($20 billion in the United States).
The big takeaway is that Ovum researchers expect mobile content and mobile advertising will drive potential mobile service provider revenues. How much of that increase is directly from 5G, and how much is a secular shift to mobile platforms for media and advertising is a question nobody can really answer.
In many countries where mobile broadband is the dominant way people use the internet, it should not come as any surprise that mobile internet access data volume eventually overtakes fixed network volume.
In countries where fixed network broadband is ubiquitous, the changes could be more profound.
Some coming changes are obvious. “As 5G speeds ramp up, the existing differentiation in broadband speeds by cable over cellular will likely erode,” researchers at Ovum say. In principle, that means mobile substitution for fixed access will be more feasible.
What is not so clear is what that trend could mean for incumbent and mobile suppliers of video entertainment services and apps. It is true that “5G will help operators capitalize on mobile media growth.” What that means for the fortunes of over-the-top providers, compared to linear distributors, is less clear.
AT&T, the largest linear video distributor in the U.S. market, already is committed to replacing its satellite platform with OTT streaming. The point is that the difference between linear and OTT streaming is becoming more subtle. The same owner can supply both, even if gross revenue or profit margins differ. And it already appears that video consumption on mobile devices is growing.
Depending on supplier and user behavior, more OTT streaming might displace or might simply augment consumption on any number of devices. Some suppliers might not care too much whether a customer consumes on a mobile phone, a tablet, a PC, a game console, a TV, on an auto, airline or other screen.
Other suppliers, unable to operate in an “any mode” context with ease, could suffer.
Nor is it so clear what percentage of overall consumption of augmented reality, virtual reality, enhanced gaming, in-vehicle services and so forth should be specifically allocated to 5G or mobility. Mobile phones with 5G will make all those use cases readily available. But not all new use cases can be specifically enabled by 5G.
The point is that mobile content subscriptions and mobile advertising are going to grow. Just how much, and how much will be enabled specifically by 5G, is hard to determine with precision.
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