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Dr. Jon Peddie is a long-time friend and expert who heads up Jon Peddie Research. The latest Digital Content Creation Market Report is over 500 pages and took a year to create. I talked with Jon about some of the trends highlighted in the report (watch the video above, transcript is below), including discussion of features like ray tracing and the use of artificial intelligence (AI) in content creation tools. Jon is also writing the ongoing Graphic Chip Chronicles for Electronic Design.
The digital content creation (DCC) market has been growing at a rapid pace as noted in the report (Fig. 1). A significant chunk of it revolves around video content, followed up by image content.
Jon also talked about how gaming, graphics, and AI is changing the tools we use and how quickly content can be created. One example was how Industrial Light and Magic helped with the creation of season two of Disney's The Mandalorian (Fig. 2). This was done using large flat-panel screens instead of green screens. This allowed the actors to see their virtual environment instead of imagining what was supposed to be where the green screen is located. It also allowed for a single video capture of the scene instead of multiple shots typically required with a green-screen background and multiple actors.
The use of AI to generate the background is part of the changes seen over the years. It's also the source of "deep fakes," which is both a boon and bust since using fake video is great for games and movies but not for news.
The report cost is a bit high for the casual reader, but hopefully our interview provides some insight as to where things are and where they're headed. On the other hand, for those in working in this market, the cost is minor compared to the details and insight it provides.
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The video transcript below has been edited for clarity.
Bill Wong: Well, as you can tell, we're doing a video, and digital content creation is required to do so. This is very big at this point. So, John, you've done a digital content creation study that has been massive. It's over 500 pages. Can you give us a little bit of insight on digital content creation and the growth that you're seeing?
Jon Peddie: The growth is incredible and the growth has been partially due to COVID. Not in the same way that PC shipments grew in COVID and then collapsed, but because of COVID and people had to stay home, they didn't go to the theaters. So instead, they started watching streaming TV and they quickly found out they've seen everything and they were saying, we want more content, we want more content.
So the studios reacted to that, and they contacted all of the creators that they could find and said, "Can you do something for us? Can you help us, you know, help us make some stuff to satisfy this demand?" And they did. So right now, we think that the demand is still high. It's not going down at all.
Right now, we think that it's probably got a growth rate of somewhere around 15 to 16%. And that's an astonishing kegger when you compare it to other industry segments. And that growth rate is a combination of finding people who can do the job, then finding the tools for them to do the job and then finishing it up and putting it into a platform that can stream it or make a movie out of it.
So you have all that plus all the normal content creation that you had to begin with, which is advertisements and commercials. And like you said, the movies that we're used to seeing. So it's just the demand is just, just extraordinary.
Bill Wong: Okay. Now, the video market is probably the biggest sector on this. Talk about that and how it's been growing.
Jon Peddie: Well, everybody today is a videographer, right? We're all, you know, taking photos and taking videos and putting it up on TikTok and places like that. And so we're all content creators. The difference is that there's three categories of content creators. So, there's the super professional, the guys that make the movies and things like that.
There's what we call the "prosumers." And these are people who make professional videos and so forth, but it's not their full-time job. They're sometimes called wedding photographers or people like that. Then there's hobbyists, which is you and me and everybody else out there that's got a phone. As you can imagine, that's the largest portion.
It's also the words quality, but those three categories have categorical differences in the software tools that they use as well, as you can imagine. And and the price that you pay for those tools. And so we've seen that market grow to try to do those. Off the top of my head, I think it's like something about $5 billion just for video composition tools. But there's a whole lot that goes into making a video.
I mean, look at you. You're going to be doing it pretty soon. The typical ratio is it's at least 10 to 1. And what that means is for every one minute of video you take, it's going to take you 10 minutes or more to to edit it, get it out, to use a documentary as an example. The documentary ratio is 1000 to 1.
And here's the hard part of that, right? When someone makes a documentary, the camera just never stops running. And they're just always capturing stuff and interviewing stuff. And then they have to go back and edit it. And and that's why it's such a long time to make a documentary. Well, the same thing is kind of true, and it scales down as you get into less, let's say, complicated things and documentaries.
So the work is heavy duty. It requires really powerful pieces because they've got to render every one of those frames. And now at 4K. So that drives it up further as well. The demand for hardware, the demand for software that can manage it, and the demand for people who know how to work the tools.
It just keeps going on and on. I mean, it's what some people would call a perfect storm.
Bill Wong: Along those ways, you talked before about smartphones being able to capture things in 4K or greater. But the other piece of the puzzle in terms of editing is artificial intelligence, some of the ways the tools are being enhanced.
Jon Peddie: Yeah. Aside from the funny things that you've seen where you can type into it first and say, " look, give me a picture." That's Brad Pitt in a German soldier's helmet wearing a bathing suit. You know, it shows where my head's going. Anyway, so you can do that crazy stuff, and that's fun. But that has about a 32nd, you know, attention characteristic to it.
You're not going to make a feature length movie doing stuff like that. But what you will do is you'll be able to place people into situations that either don't exist, or are too dangerous to go into, or you just can't get access to. And, in fact, a situation like that just happened. I don't know if you saw this in the news or not.
Someone made an artificial video of a bomb going off at the Pentagon and it hit the news. It spread throughout the web. It drove the stock market down for a day because we have a problem with total fake news like total AI-generated type things. So what I can do is draw on all the stuff that's out there on the web, you know, zillions of hours of video, and then examine it and filter out the things that you want to make a video of and then produce it.
So, a controversial point right now with content creators is are we all going to be put out of work? Because, you know, we're going to do what we have been doing. And the short, but smart, answer is no. And you'll use Ai as an assistant. You'll you'll exploit AI, not be exploited by it.
And that's how it will turn out. But it's going to scare a lot of people in between because, you know, as a famous comment I'd like to make, sometimes not famous, but that is if you don't want a robot to replace you, don't do robotic jobs.
And so if all you can do is cut and splice video together, that's your main skill set, you're out of here because that's the easy thing to replace.The thing that you can't replace is the creativity, the imagination, you know, the spark of curiosity, etc.. And that's where real creators come from.
Bill Wong: Well, talking about exploitation and creativity, gaming is a big piece of this puzzle as well. And it's utilizing technologies like ray tracing. What about that? And maybe even talk a little about where ray tracing is headed at this point.
Jon Peddie: Well, start with gaming. The thing about gaming is the studios are using game engines better and this has had a dramatic effect on production time. This sounds facetious, but today you really can make a movie in real-time, a cinematic movie in real-time, and that's got a whole bunch of components to it, which are really interesting.
One is the TV series Mandalorian. Maybe you've heard of that. Anyway, if you haven't, the Mandalorian was one of the first episodic shows to use LED back panels that had all the scenery that would be in the show. In the past, the actors would get up there and they'd stand in front of a green screen and they would have to try and imagine what the scenery should look like so that they could, you know, act appropriately and carry out their roles (Fig. 3).
Now they literally can be in the scene. I mean, they really get immersed. It changes the acting. It speeds up the process because they do one take now. They don't do 20 takes and then tweak the hell out of it and post. So that's the one thing. And the other thing is that background, that's what's being run by the game engine.
So you have that and you want to have a speeding car coming over a cliff and going down, and the thing in the screen behind you, that's all a game engine. In the past that would either have to be done in 3D modeling and would take, you know, hundreds of hours to get it right.
Or even worse, it would be a stunt driver. Meter's running. Well, he's destroying his body. So all of that stuff gets washed away and is done on the computer and it's done in an hour or two. So it's just, you know, it's incredible. Coming with that is the ability to do real-time ray tracing and really it gets a big hunk of credit for this because they developed this thing called deep-learning super sampling (DLSS).
First of all, let me back up, make sure eventually that ray tracing is a really computationally intense operation. And the higher the resolution, the longer it takes. So we want big resolution images and we want ray tracing. So they're counterproductive in that sense. Well, when using AI, first of all, they take the image and they go from 4K down to 1K HD, and then they retrace it and scale it back up.
Now, to scale it back up, they have to know a whole lot about the image that they started with. And that's where the AI comes in. The AI looks at that image that you started with and waits for you to retrace it, scaled up, and you make a picture and you cannot tell the difference. You absolutely cannot tell the difference.
They're sharp, they're fast. And so now we have a fast ray-tracing game engine technology background with real-time scenery, and we're making movies in months rather than years.
Bill Wong: It's amazing. So before we wrap up, I'd like you to talk a little bit about the market study that you did and give us a little synopsis, because it took over a year. It's 500 pages. That's a lot of details, but we haven't been able to touch on all those here.
Jon Peddie: Well, fortunately, we have a staff of very, very experienced people, and I'm not allowed to say how experienced they are because they get a little sensitive about their age. As you can see, I have a little degree here, so that helps a lot.
And the way that helps is that we know the people in the industry and there's a lot of people in the industry. But we've known them over the years, so we can very quickly get access to them, ask the appropriate questions about it, get their opinions about how the growth and so forth is going to be, and then we bring that back and we weave it all together and and try to make something sensible out of it. So it's really hard work. And then there's a little bit of, you know, opinion in there. We think that this is going to happen based on our experience.
Bill Wong: Great. I really appreciate the insights. And for those people who want much more details, they can go pick up the study from you. Thanks.
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