Virtual Production Market

Virtual production is an innovative technique used in the film and television industry that blends real-time technology with traditional filmmaking methods. It allows filmmakers to create high-quality, immersive content in a virtual environment, which can significantly reduce production costs and streamline the production process. As a result, virtual production has become an increasingly popular trend in the entertainment industry.

One of the primary advantages of virtual production is that it enables filmmakers to visualize and create complex scenes in real-time. It allows them to use digital sets and environments, which can be modified and adapted quickly and easily, without having to rebuild physical sets. This approach can help to cut down on production time, as well as reduce the costs associated with traditional set construction.

Virtual production also enables filmmakers to pre-visualize scenes and make real-time changes to them, allowing them to experiment with different camera angles, lighting setups, and special effects. This can significantly enhance the creative process and enable filmmakers to produce more polished and visually stunning content.

Another advantage of virtual production is that it allows filmmakers to capture live-action footage on set and integrate it seamlessly with computer-generated imagery (CGI) in real-time. This approach can help to create more realistic and believable environments, characters, and effects. As a result, virtual production has become an essential tool for filmmakers looking to create visually stunning and immersive content.

The use of virtual production has also become a crucial factor in the post-production process. It allows filmmakers to begin editing and refining their content in real-time, reducing the amount of time and resources required for post-production work. This can help to speed up the entire production process and reduce costs associated with post-production work.

In conclusion, virtual production is a cutting-edge technique that is revolutionizing the film and television industry. By allowing filmmakers to create complex scenes in a virtual environment, it can significantly reduce production costs, streamline the production process, and enable the creation of visually stunning and immersive content. As virtual production continues to evolve and become more sophisticated, it is likely to become an essential tool for filmmakers looking to produce high-quality content efficiently and effectively.

In 2021, the virtual production industry witnessed a surge in demand for virtual production software solutions, leading to the segment's dominance in the market. Furthermore, it is expected to grow at a remarkable CAGR during the forecast period. This growth can be attributed to the increased demand for computer-generated imagery (CGI) and VFX in movies. With the advent of technology, the integration of next-gen technologies such as AI, ML, AR, VR, XR, and deep learning with virtual production technology has further driven the segment's growth.

The production phase of the virtual production market is projected to grow at the highest CAGR during the forecast period. This is due to the increasing usage of technology that allows for the front-loading of projects, early evaluation, and editing. Consequently, this reduces guesswork while filming and ensures a smoother phase, thereby limiting post-production expenses. Additionally, the growth in the number of movies and shows that use virtual production technology has further accelerated the demand for the production phase.

The television series segment of the virtual production market is projected to grow at the highest CAGR during the forecast period. The growing dominance of OTT platforms and their ability to reach a significant number of audiences are some of the factors driving the segment's growth. According to the Theme Report 2021 published by the Motion Picture Association, the number of online TV views in the US in 2021 was projected to be approximately ten times higher than online movie views in the virtual production industry.

The use of LED wall technology in virtual production has become a significant driver of growth in the film and video production industries. The high picture resolution of LED displays allows for professional photography to be taken from just a few meters away. With the integration of camera tracking and virtual production tools, LED walls can create immersive environments, manage lighting and color, and reduce production times and costs. These technologies have revolutionized the events business as well, enabling the display of pre-rendered content and virtual sets that replace traditional chromas. During the COVID-19 pandemic, the use of LED technology enabled virtual performances, training programs, and ceremonies to continue globally.

However, the sudden boom in virtual production has highlighted a significant restraint: a lack of skilled professionals. The integration of roles from the games industry and the shifting of roles within the film production pipeline have introduced new creative and communication challenges. For individuals with expertise in games, adapting to the virtual production environment may be difficult, and there is a shortage of trained VP technicians who have a combination of technical knowledge and understanding of 3D and game engines. This lack of skilled professionals threatens to derail the workflow of virtual production and hinders the growth of the virtual production market.

Opportunity: Growing Trend in OTT Platforms

The growth of Over-The-Top (OTT) platforms presents a significant opportunity for the virtual production market. These platforms allow for easy access to entertainment, and the ability to stream an extensive library of content on demand has disrupted the entertainment industry. With OTT platforms, movie watching has become more accessible, economical, and convenient for a larger audience. Major players such as Netflix, Hulu, Amazon Prime Video, and Apple TV+ have invested heavily in original content. For instance, the investment in original content by these companies rose from USD 1.17 billion in 2017 to USD 11.5 billion in 2021.

OTT platforms have adopted strategic developments that have led to increased demand for virtual production. For example, in November 2021, Netflix acquired Scanline VFX, a global visual effects company with studios across the world. Netflix's investment in Scanline's pipeline, infrastructure, and workforce aims to push the boundaries of the company's possibilities in virtual production.

Challenge: Issues Encountered with Virtual Production LED Screens

One of the major challenges in the virtual production market is incorporating new technologies into filmmakers' toolkits without disrupting established procedures. While breakthroughs in technology can transform the industry, they can also lead to project delays and unforeseen expenses, such as post-production adjustments.

Moiré, or aliasing, is a significant issue in virtual production technology that can manifest itself in various ways. It is a complex, repeating interference pattern created by a mismatch between the sensors of a digital camera. The problem is particularly evident when filming with LED screens for XR Virtual Production. LED volumes are constructed using individual LED tiles, each with a range of individual LED diodes. The gap between the diodes forms a complex, repeated grid pattern that collides with the camera sensor grid, resulting in the undesirable moiré effect.

To avoid moiré, pre-production decisions must consider the possibility of unplanned occurrences by leaving adequate space on the LED volume for camera and depth of focus changes. These constraints can severely limit certain camera movements and may impact whether desired views can be obtained at all.

Top Key Market Players Companies in Virtual Production Market

ADOBE INC.

NVIDIA CORPORATION

SONY GROUP

AUTODESK, INC.

TECHNICOLOR

HTC CORPORATION

VICON MOTION SYSTEMS LTD

SIDEFX

EPIC GAMES

MO-SYS ENGINEERING LTD.

PERFORCE SOFTWARE, INC.

THE WALT DISNEY COMPANY

DNEG

TILTLABS

PLANAR SYSTEMS, INC.

VIRSABI

PRODUCTION RESOURCE GROUP, LLC

DIMENSION

RECODE XR STUDIO

VÛ TECHNOLOGIES

80SIX LTD.

ROE VISUAL

BORIS FX, INC.

INSTA360

360RIZE

WÇTÂ FX

Recent Developments

The virtual production market has been witnessing several recent developments as the technology continues to evolve rapidly. Some of the notable recent developments in the virtual production market are:

1. The growing adoption of LED volumes: LED volumes have become increasingly popular in the virtual production market. They are being used to create realistic backgrounds, environments, and effects, and are replacing traditional green screens. LED volumes provide a more immersive experience and allow for real-time camera tracking and lighting.
   
2. Advancements in real-time rendering: Real-time rendering has become more advanced, making it possible to create high-quality visuals in real-time. This has reduced the need for post-production work and made the virtual production process more efficient.
   
3. Increasing use of motion capture technology: Motion capture technology has been around for a while, but recent advancements have made it more precise and accessible. This technology allows for real-time tracking of actors' movements, which can be incorporated into the virtual environment.
   
4. Investment in virtual production studios: Major studios are investing heavily in virtual production capabilities. For example, Netflix recently acquired Scanline VFX, a global visual effects company that works on several Netflix projects.
   
5. Collaborations between virtual production companies: Virtual production companies are collaborating to improve the technology and provide more comprehensive services. For example, Unreal Engine and Film Engine have partnered to offer a complete virtual production workflow.
   
6. Adoption of AI and machine learning: AI and machine learning are being used to automate certain aspects of the virtual production process. This includes real-time compositing, camera tracking, and post-production work.
   

Virtual Production Market Share:

The entertainment industry has been revolutionized by the use of virtual production technology, which has increased the demand for high-quality visual effects in movies and television shows. This innovative technology has resulted in significant growth in the virtual production market, with the availability of real-time rendering engines and virtual cameras allowing filmmakers to create stunning visual effects within their budget and in real-time, reducing the need for expensive post-production.

According to market analysis reports, the virtual production software solutions segment is expected to dominate the market, accounting for the larger share in 2021 and growing at the highest CAGR during the forecast period. The increasing demand for VFX and CGI in movies, coupled with the integration of other advanced technologies like AI, AR, VR, XR, and deep learning, has contributed to the growth of this segment.

The production phase in the virtual production market is projected to grow at the highest CAGR due to the increasing usage of technology, which helps in early evaluation and editing, focusing on front-loading projects, and reducing the need for guesswork while filming. This results in a smoother phase and limits strained post-production expenses. The number of movies and shows made entirely through virtual production technology has contributed significantly to this growth.

In the forecast period, the television series segment is expected to grow at the highest CAGR in the virtual production market. The dominance of OTT platforms and their ability to reach a large audience is among the factors contributing to the fastest growth of this segment. According to the Theme Report 2021 published by the Motion Picture Association, online TV views in the US were projected to be approximately ten times higher than online movie views, emphasizing the growth potential for this segment.

Virtual Production Market Dynamics:

The market for virtual production is experiencing significant growth, and one of the primary drivers of this growth is the increasing use of LED wall technology. LED walls have revolutionized the audio-visual industry by providing excellent picture resolution, which enables taking professional-grade photographs from just a few meters away. When combined with camera tracking and virtual production technology tools, LED displays can create new and endless experiences, such as real-time stage changes, light and color management, and immersive worlds for performers and users. This technology can also help to minimize production times and costs.

Digital projection and LED wall screens have been employed in recent years in most productions to build new virtual sets that replace traditional chromas. This has not only revolutionized the film and video production industries, but also the events business. The possibilities of virtual production are limitless when LED screens, virtual set extensions, camera tracking, and game engine technologies are combined. During the COVID-19 pandemic, LED technology played a significant role in keeping the virtual production market growth and economy going by providing the facility to conduct cross-border training programs, performances, and ceremonies via virtual products technology.

However, the shortage of skilled professionals is a major restraint in the virtual production workflow and threatens to derail the virtual production market. The sudden boom in virtual production during the pandemic highlighted the scarcity of hands-on experience for the exceedingly high demand in this field. The introduction of roles from the games industry, as well as the shifting of roles within the film production pipeline, introduces new creative and communication issues. Communication is a two-way problem for skilled individuals adapting to games and vice versa, and there is a shortage of trained VP technicians with a combination of knowledge. This creates a significant hurdle in the virtual production workflow, and efforts are required to address this restraint to continue the growth of the virtual production market.

Opportunity: Rising trend in OTT platforms

• The rising trend of Over-The-Top (OTT) platforms is creating opportunities for the virtual production market. The convenience of streaming an infinite library of movies and shows at any time has led to the growth of OTT spaces. This innovation has caused disruptions in the entertainment industry by making movie watching more convenient, accessible, and affordable for a wider range of people.
• According to the Sony Group, leading OTT players like Netflix, Hulu, Amazon Prime Video, and Apple TV+ have been investing heavily in producing original content. Over the years, their investment in original content has increased substantially with the spend valued at USD 1.17 billion in 2017 and rising to USD 11.5 billion in 2021.
• Key OTT players have implemented strategic developments that have further accelerated the demand for virtual production. For example, in November 2021, Netflix, Inc. acquired Scanline VFX, a global visual effects company with studios in several locations around the world. Scanline VFX has been involved in several Netflix productions, including Don't Look Up, The Gray Man, Slumberland, The Adam Project, and Stranger Things 4. Netflix's investment in Scanline VFX's pipeline, infrastructure, and workforce and their continued support of the pioneering work that Scanline's Eyeline Studios is doing in virtual production aims to push the boundaries of the company's capabilities.

Overall, the virtual production market is experiencing significant growth and innovation as the technology continues to evolve and improve.