5 Things Hollywood Needs to Know About 5G

It’s either the Next Huge Thing — a technology that alters virtually every aspect of how we work, play, communicate and travel — or an incremental lift in today’s wireless speeds and feeds.

No one doubts that the implementation of 5G as the new digital standard for wireless services will change the market and make the telco giants more competitive with cable broadband.

Compared with today’s 4G, the next-gen 5G standard promises faster speeds of at least 20-fold, instant response times, vastly improved network efficiencies and longer device battery life, among other benefits. Following the first commercial 5G launches in the U.S. in 2018, mobile operators worldwide are expected to invest around $160 billion per year to expand and upgrade their networks for 5G, according to industry trade group GSMA.

Hollywood is still trying to figure out what 5G means for the content business. There’s the hype of what’s possible tempered by the reality of what’s probable.

“Everybody believes [5G] will be transformative in terms of connectivity and mobility. But it feels early,” says John Harrison, EY’s global media and entertainment sector leader. Right now, he counsels, companies should engage in brainstorming and experimentation.

Here are five 5G storylines Hollywood is watching:

The End of ‘Video Buffering’

For streaming video, the biggest 5G wins aren’t only much higher throughput speeds but extremely low latency. The 5G target for latency — the time between a device’s data request and the response it receives — is 1 millisecond or less, a massive improvement over the average 4G latency of around 50 milliseconds. It’s “as fast as your brain processes reality,” claims AT&T Business chief marketing officer Mo Katibeh.

That could solve one of the biggest frustrations for mobile video: 56% of consumers say they just give up and try again later when they encounter problems trying to watch streaming TV shows or movies, per a recent survey by content-delivery software company Penthera. “We laugh that our 2-year-old son will never know what ‘video buffering’ is,” says Zeda Stone, CEO of RYOT, Verizon Media’s immersive-entertainment production arm.

The advent of 5G will push mobile content consumption even higher. Consider Disney: Overall, more than 70% of the company’s content today is accessed via mobile, versus less than 40% four years ago, says Aaron LaBerge, chief technology officer of Disney’s Direct-to-Consumer and International segment. “If you look at Disney from a historical perspective, improvements in mobile connectivity have had a profound effect on the business,” he says. “Bigger, faster, stronger is always better.”

Catalyst for New Businesses

Besides turbo-charging existing applications, market watchers expect 5G to serve as a platform for an array of new media models. Those could be everything from immersive interactive experiences across video, gaming, music and advertising — including augmented and virtual reality — to in-car entertainment in self-driving autos or even 3D holographics.

“For us, it’s a game changer,” says Jake Zim, senior VP of virtual reality for Sony Pictures Entertainment.

With the real-time interactivity enabled by 5G, Sony created a “Spider-Man: Far From Home” multiplayer VR experience, letting users become the famous webslinger, swinging through the canyons of Manhattan’s skyscrapers in a race against other players. The mobile application is possible at scale only with 5G’s very low latency to ensure seamless collaborative gameplay, says Zim: “It’s the kind of thing that makes our mouths water.”

Challenger to Cable Broadband

With 5G, home broadband access over wireless is a reality — arming carriers with a potent new weapon to take on cable operators. Verizon in fall 2018 bowed its first 5G home broadband service in four cities, with pricing as low as $50 per month and three months of free YouTube TV. The telco’s marketing message for the service, which it says offers typical speeds of around 300 megabits per second: “Cut everything you hate about cable.”

“There’s a clear risk to the cable industry from fixed 5G wireless,” says EY’s Harrison. “If I can get the same connectivity or better at home with 5G, and can take it outside the home, that’s a high potential consumer value proposition there.”

That said, there’s a question of whether 5G to the home will deliver an attractive return on investment. “It’s a big country,” MoffettNathanson principal analyst Craig Moffett noted in a recent research report. Building a 5G network that hits Verizon’s target of 30 million homes “is possible – anything is possible – but it will take a very, very long time. And it will cost a great deal of money.”

Rise of the 5G-Enabled Start-up?

In the ’90s, when the slow and clunky World Wide Web launched on dial-up, nobody foresaw the colossal rise of internet giants like Facebook and Google. In the same way, 5G is bound to spawn a new class of disruptive players, some argue.

“This happens every time there’s a new technology,” says Mike Bloxham, head of the global media and entertainment team at consulting firm Magid. Bloxham imagines a seismic shift happening when kids in their bedrooms have devices in the palms of their hands with the power of a remote studio green-screen or CGI production facility.

“You’re giving a weapons-grade creative tool to people to produce content that’s every bit as technically excellent as what Hollywood produces,” he says.

Critical Mass Is the X-Factor

Timing is the linchpin in the whole 5G equation, and nobody really knows how fast it will hit a tipping point in terms of adoption. That’s contingent on pricing models of 5G services, which are just now emerging. U.S. carriers AT&T, Verizon, T-Mobile and Sprint all expect to debut service for the first 5G-enabled smartphones from Samsung and others later in 2019 in select markets. Plus, new 5G phones will cost $40-$50 more than their 4G equivalents, per a Deloitte analysis.

But it will be several years before 5G achieves blanket coverage, and until then users will need dual-mode 4G/5G connectivity. For example, T-Mobile’s current plan is to have 5G service covering 90% of the U.S. population with more than 100 Mbps by the end of 2024.

By 2022, 5G’s initial impact will be “measurable and significant,” according to a forecast by network-systems vendor Cisco. By that time, more than 422 million 5G connections will be in service with an average speed of 170 Mbps, more than four times the average 4G speed, per Cisco’s crystal-ball gazing. That sounds like a lot of users — but even then, 5G will represent only around 3% of all mobile connections worldwide. An Intel-funded report by Ovum pegs 2025 as a tipping point, when 57% of global wireless media revenues will be generated through 5G.

“5G to me is definitely a super important evolutionary step in wireless connectivity,” says Joe Inzerillo, exec VP and chief technology officer of Disney Streaming Services. “But I don’t think it’s the atomic bomb that changes everything. It will be years in the making.”

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