Advancements in Virtual Production and Advertising: An Updated Look at the Growing Importance in?Sports.
Since publishing the article, The-growing-importance-of-virtual-production-and-advertising-in-sports, in July, LCA has received many calls and enquiries from companies and people developing and selling Virtual Production solutions, brands, and investors interested in virtual advertising. The appetite to adopt virtual solutions is strong, and the technology is improving quickly, creating solutions for multi-camera broadcasts and, most excitingly, the ability to enhance recorded and archive content.
We have updated the article to reflect those conversations and to outline the opportunities around the advancements. Undoubtedly, virtual advertising and production is the technology that has garnered the most interest in the market. It has opened up many opportunities for Sports organisations and their potential partners quicker than expected, generating investor interest?—?a sign of its growth.
The number of companies offering solutions has grown, which has provided healthy competition, technology advancements and the attention of the substantial new player in the market.
The acceleration to Virtual.
The number of broadcasters with virtual studios is too many to list. In sports, many increasingly adopt a virtual studio or environment to present the event. It’s not new, but the increase is still noticeable. In the UK, ITV Sport will present the RWC from a virtual studio in London, BBC Sport covered the recent World Cup in Australia and New Zealand from a virtual studio in Manchester until the end of the quarter-finals, and Premier League Productions have delivered their broadcasts to the international market via a virtual studio in Stockley Park. The trend is global as well; in the US, Fox Sports delivered a unique virtual set as part of their flagship NFL coverage, and across Asia, broadcasters choose virtual studios for their sports and major entertainment events. Reporters and commentators travel and work on-site while presenters and guests stay in their home country in a green screen studio with a fantastic variety of virtual backdrops to engage the viewer and tell the story.
Commercially, Sports organisations are quickly becoming attracted to the value of Virtual Advertising. Vendors such as Supponor, Uniq-Feed, Brand Brigade, Sponixtech and Vizrt have signed significant long-term partnerships with federations to replace the advertising on the LED Perimeter boards and camera carpets (on pitch advertising) inside stadiums with regionalised brand messages applied virtually. The number of vendors is increasing each year. Commercial agencies collaborate with vendors to offer commercial inventory sales alongside tech, a strong GTM strategy for federations to consider.
A Multi-Camera set up:
Speaking to federations and broadcasters, their main complaint about virtual advertising solutions is that they can only be applied to a single camera. The vendors argue, rightly that over 75% of the broadcast is delivered from the main angle camera. However, for sports like tennis, where there are plenty of close-ups of the players post rally or in Rugby, where a tighter (closer) shot of the action is used more often than in a sport like Soccer or American Football, there is an increasing need to be able to replicate the background of the virtualised angle on a tighter shot. Also, in soccer, with VAR now standard in all top-tier competitions, adding virtual advertising to the 18-yard angle provides airtime and revenue opportunities on that camera angle to a sponsor.
There are technical challenges with matching the cameras correctly to cut between the two (or more) seamlessly, and specific vendor solutions are better suited to it than others. Still, it is achievable and a terrific addition to offer as part of the list of requirements in any commercial discussion.
Virtualising recorded content: A new Goldmine:
While leading production departments, I prioritised incorporating any new technologies I was presented with across our content offerings. Consistent standards for live, post-produced, and short-form content were crucial. In the past, virtual production techniques like AR and VR were only available during live broadcasts. Adding it to recorded content is a fantastic development that should unlock more revenue-generation options.
The change in audience preferences has been a critical driver for this shift. It’s important to note that Gen Z is now the most important new market for sports organisations, so creating content that meets their needs is a top priority. Compared to millennials, this group is 10% less likely to watch sports often and twice as likely not to watch sports at all. However, half of those between 18 and 34 who watch sports prefer watching highlights over full games. Therefore, the industry must focus on virtualising highlight programs, short-form clips, and live broadcasts.
Archived sports content can be a highly lucrative revenue stream for sports organisations. Fans often enjoy revisiting memorable historical moments, such as Messi’s first goal in the MLS. This content can be utilised to promote new seasons, market upcoming matches, and leverage athletes’ NIL (Name, Image and Likeness). With the ability to add virtual advertising to a recording years later, sports organisations provide themselves with a repeated opportunity to monetise this commercial inventory. As the market for live rights fees dwindles, this presents a new and untapped market for sports owners to benefit from their archive footage.
Augmented reality (AR) and data integration are crucial in delivering real-time information visually and appealing to fans’ demands. Adding localised graphics, commentary, and advertising to live and recorded content creates a continuous, virtuous circle of revenue generation that caters to Gen Z’s habits and supports sports organisations’ revenue and budgetary requirements.
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Epic, Unreal and an Avalanche.
During discussions with investors, significant graphics and virtual production vendors, there was a sense of apprehension surrounding Epic Games and their future plans. After launching UE5 in May 2020, the company announced their intentions to become a comprehensive graphics provider, which understandably made existing vendors nervous. In November 2022, Epic Games unveiled Project Avalanche, a revolutionary platform that enables broadcasters to design and deploy an entire graphics package from a single environment. ESPN put it to the test during the Rose Parade in January 2023, and with further announcements expected from Epic’s partners at IBC later this month, a new technology with significant game-changing potential is set to become widely available in the graphics and virtual production market.
The Unreal Engine is an incredibly versatile tool that can be used for various applications, including creating immersive virtual studios, real-time graphics, interactive storytelling, enhanced sports broadcasts, and virtual reality experiences. It is user-friendly, especially for beginners who have used Unreal before, is easy to integrate into the existing broadcast workflow and has the potential to transform the way content is presented and engages viewers. It can support and deliver all virtual requirements for live and post-produced content.
UE5 is set to revolutionise the broadcast graphics landscape for two reasons. Firstly, the engine has a robust community of developers who continuously contribute to its improvement and innovation. Compared to the current market, where many broadcasters are frustrated with the slow pace of development, UE5’s community-driven approach ensures a faster and more responsive development process.
Secondly, the affordability of UE5 is a game-changer. With its vast revenues generated through gaming products, Epic can afford to set a price that suits the market. This will drive the cost of graphics down for broadcasters, making it possible for a broader range of broadcasters to access its advanced capabilities.
UE5’s powerful, easy-to-use features can significantly enhance broadcasts, creating immersive experiences and offering solutions for virtual advertising, regionalisation, language customisation, and more. As UE5 brings creative and immersive experiences to the forefront of the broadcast industry, the future holds exciting possibilities.
The Advancements in AI (Artificial Intelligence)
Supporting UE and all the other engines is AI. Thanks to AI, virtual production and advertising solutions are becoming more accessible, easier and faster to install. Software is replacing hardware, and the cloud has replaced on-premise. These technological progressions have facilitated the development of new solutions, enabling sports organisations to create compelling virtual content.
How LCA Can Help
LCA specialises in providing expert guidance to sports organisations looking to set up virtual production solutions and advertising strategies. We understand the complexities involved and can help explain the steps required, identify the leading service and commercial companies involved, and evaluate their setups. Our expertise ensures that clients are well-informed and can make informed decisions that align with their goals and objectives. By partnering with LCA, sports organisations can leverage our experience and knowledge to create compelling virtual content and maximise revenue generation potential.
Conclusion
It has been a fascinating summer hearing about the advancements in virtual production technology, and my thanks to the companies and people supporting my research. The technology has opened many opportunities for the sports industry and its potential partners. The trend is global, and the appetite to adopt the technology is strong, generating significant investor interest. The number of companies offering solutions has grown, providing healthy competition, technology advancements, and the attention of a substantial new player in the market.
As a trend, virtual production and advertising have quickly become the norm in sports broadcasting. It is complex to get right, but software and AI will reduce that, increasing its use. It supports audience trends, too. It will be the backbone behind immersive experiences, and whilst the live telecast of a major sporting event remains the most viewed, adding the ability to virtualise the recorded content is a fantastic development that should ensure consistency and increase viewership, resulting in increased revenue-generation options for the industry maintaining its growth.