Ericsson talks up VR, just as Nokia gets out of the business

It seems completely appropriate that Ericsson has “bigged up” VR experiences and how VR will reignite the campfire experience of TV, just as Nokia has dropped out of the 360 video business. The two companies have rarely been in step.

Ericsson Consumer TV and Media ConsumerLab report came out of 20,000 online interviews in 13 countries with people aged 16–69 in Brazil, Canada, China, Germany, India, Italy, Russia, South Korea, Spain, Sweden, Taiwan,
the UK and the US. Each had a broadband connection and watched TV or video at least once a week, or more frequently.

Funnily enough it pre-empted the VR conclusions by conducting some of the interviews over VR with respondents who had VR devices. It is not recorded if any of them used the Nokia Ozo camera.

Let’s be clear here – what these people believe will happen, is not a forecast. To build a forecast you have to have some understanding of how consumers imagine things will pan out, and compare it with how things have panned out in the past. This is a collection of uneducated technology opinions, on what they think they will be using in a few years’ time.

Take the claim that half of all TV viewing will be on a smartphone, a headline that many have used from the report. It said that 70% of consumers watch TV and video on a smartphone today – twice as many as in 2012. So smartphone viewing has doubled, and makes up a 5th of total viewing, around 6 hours a week. We take that to mean that a couple of 30 minute programs are watched on the phone each day, while also watching TV. Ericsson may choose to count the phone viewing, Nielsen may choose to count the TV viewing (or both). But each only has half of the engagement and for advertising revenues that’s a problem.

This leads to the next conclusion that by 2020, only 1 in 10 consumers will be stuck watching TV only on a traditional screen, a 50% decrease compared to 2010. Well that’s a straight linear projection. Our own recent Rethink TV study on “What we watch video on” reached a similar conclusion. But by traditional screen we meant, and we are sure Ericsson means, a broadcast only TV. They might watch on a connected TV, a tablet, a laptop or a phone, and more and more likely all of the above at once. So predicting the death of the coach potato is not really in line with that. If you ask anyone if they are or will be a couch potato, they are going to say no.

The next conclusion relates to content discovery with time spent searching for content rising – it has already gone up by 13% from last year and is now one hour a day. Ericsson concludes that a universal search would be good, why not make that a voice search, or a conversation with a voice assistant, about what you fancy watching.

In the 16–19 year old category more than 50% of their time is already spent
watching on-demand, up 100% – or 10 hours a week – since 2010. On the other hand 60–69 year olds, still spend almost 80 percent of their viewing time, watching live and scheduled linear TV, unchanged since 2013.

Which all leads to the far reaching conclusion that half of all viewing will be done on a mobile screen, and half of that (25%) will be done on the smartphone. And 7 out of 10 consumers will prefer on-demand and catch-up services over scheduled linear TV viewing. We would suggest that this has already happened. Anything to avoid TV adverts. We hardly know anyone who still watches them.

Finally Ericsson suggests a third of consumers are projected to use VR by 2020. The truth is that people are reading about Virtual Reality all the time and it is not surprising that they expect to be using it more and more often, especially as most people have not yet really tried out VR, and so they are keen to try. Anyone who understands the limitation of viewing VR, half blinded, with a phone strapped to your head, realizes that there is no commercial incentive to develop media for this, because the viewing numbers are going to be a low fraction of all smartphones.

Until a mixed reality format comes out of Light Field manipulation R&D, VR or 360 degree viewing, is unlikely to be mainstream. There are also many improvements with codecs and broadband throughput which need to be overcome even then. It may take off again in the 2018 time frame, but equally it may simply peter out to re-emerge down the track. It depends on the extent of investment made by content companies, which in turn relies on the new viewing paradigms, not yet invented.

We continue to be concerned that technology firms, who have only one agenda, which is to sell more stuff, hijack research, and claim that what they produce for FREE is perfectly good research. There IS a value in asking 20,000 consumers what will happen, but only when those futures do not rely on the build out of a technological eco-system – and it can happen with the way things are now and with the technology we already have. Otherwise you are asking consumers to be experts in technology, which they are not.

All we can really do is take this as yet more evidence that people are happy to watch more and more long form content on a phone, and that’s it.