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New 5G Edge Applications in Media and Entertainment

Mobile communication service providers have started to build out fifth-generation (5G) wireless network infrastructure. There are many use cases for this new technology. What benefits will 5G bring to the media and entertainment industry? One example: 5G will empower cloud-based entertainment on the go.

While 2019 has seen the first deployments of 5G in the consumer domain, 2020 will be the year of large scale commercial 5G rollouts across the globe. As a result of this network investment, 5G generated revenues for cloud-based entertainment services are forecast to rise rapidly.

According to the latest worldwide market study by ABI Research, 5G alone will contribute revenues of almost $1.9 billion to cloud gaming -- accounting for 42 percent of overall cloud gaming revenues, as well as $67.5 billion in cloud video -- accounting for 31 percent of cloud video revenues by 2024.

5G Edge Computing Market Development

"These numbers underline the growing demand for cloud-based entertainment services," said Leo Gergs, research analyst at ABI Research. "As an important enabler for these new entertainment services, 5G will be critical for the telco industry to unlock these immense revenue opportunities and turn them into commercial reality."

The current situation around countries imposing social distancing to fight and delay the outbreak of COVID-19 is exacerbating the demand for cloud-based entertainment as well as remote video applications, such as remote education services or videoconference and meeting platforms.

Besides, mobile network operators across the globe are already experiencing a surge of internet traffic by an average of 15 percent -- and up to 30 percent in European countries such as Spain and Italy.

Measures like school closings are providing a bump to video gaming and over-the-top streaming markets, with platforms like YouTube and Netflix reporting an increase in network traffic of 15 percent and 16 percent, respectively.

Due to current 'social distancing' policies, most of these services will likely be consumed at home, using either mobile or landline broadband, and in some cases fixed wireless access. Therefore, 5G will be an important enabler to transport these immersive digital media user experiences outside.

According to the ABI assessment, to truly succeed in the digital media domain, mobile network operators and IT infrastructure vendors need to target the emerging Enterprise use cases within the media and entertainment sector.

Gergs says, "If there is one lesson to learn from South Korean operators LGU+ or SK Telecom, it is the fact that revenues from the Consumer domain alone will not be enough to pay off capital investment for 5G network deployment."

That is why the global telecommunications service providers need to go beyond their market development comfort zone and target new digital media enterprise use cases.

To address these new media enterprise use cases, telecom infrastructure vendors and network operators will need to fully embrace a service-based monetizing strategy and depart from a traditional CAPEX intensive business model.

Outlook for 5G Applications in Media and Entertainment

This scenario should acknowledge that hyperscale cloud providers such as Amazon Web Services (via their Wavelength offering) will likely advance further into the media and entertainment domain to offer edge computing capabilities or individual network functions as-a-service.

"If the telco ecosystem does not successfully target media enterprise use cases, web-scale companies will take over the domain and push the telco industry to the side," Gergs concludes.

In contrast, I believe that more strategic partnerships will emerge between mobile service providers and hyperscale cloud providers. There are significant new opportunities for AWS Local Zones to extend compute, storage, database, or other select services closer to end-customers at the network edge. I anticipate that the Verizon and AWS partnership will set the stage for others to follow.

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