While many within the telecom and media industries are still reeling over the likely AT&T / Time Warner merger, we wanted to consider the deal’s potential implications for the broader virtual reality industry.
A Stronger Business Case for 5G
The combined company will have a great hand in creating the infrastructure capacity on which consumers enjoy virtual reality experiences. In fact, as we wrote in this April article, carrier involvement in the VR/AR may prove the major catalyst for consumer adoption. For anyone who has tried live-streamed 360 video in a VR headset, it’s immediately clear that the experience will become dramatically improved by the availability of 5G wireless technology. While an exact timeframe for when 5G will be broadly available is unclear, Verizon and Samsung major carriers have already begun testing 5G.
More Investment in Premium VR Experiences
Besides increasing bandwidth, the combined company will also have a role in producing premium content. Time Warner, owner of CNN, HBO, Warner Brothers, and many other media companies, has already invested significantly in numerous VR companies through its venture capital subsidiary. Most recently, Time Warner Investments participated in NextVR’s $80M Series B round from earlier this year. Time Warner also owns a 10% stake in Hulu, who has shown a keen interest in VR content themselves. We would expect that the combined company would continue to invest in premium virtual reality experiences particularly if the industry continues to grow at the anticipated rates.
We’ve already seen carriers begin to throttle user’s bandwidths as carrier revenue pressure mount. As the most bandwidth-intensive content to be potentially streamed over mobile networks yet, virtual reality possess to be an existential threat for carriers who cannot easily create new VR-based revenue products.
To learn more about the Greenlight Insight’s outlook and analysis of the investment & acquisition activity in the virtual reality industry, order the 2016 Virtual Reality Industry Report.