A recent report by Mordor Intelligence forecasts that the XR market is projected to deliver USD 44.14 billion by 2030, reflecting a massive 43.36% CAGR. Momentum around XR is clearly building across the media and entertainment space with major technology companies all investing big bucks into developing XR technologies for the consumer market.
While adoption of XR across the OTT industry is still at an early stage, it’s clear already that it has the potential to completely redefine how viewers engage with content. Personalized and immersive content brings an interactive dimension to video experiences, which creates some exciting new opportunities for OTT providers in terms of engagement and monetization.
A number of consumer XR devices are now on the market that are powerful enough to deliver high quality immersive streaming experiences, from headsets such as the Meta Quests, Apple Vision Pro, Samsung Galaxy XR that offers complete immersion, to AR glasses like XREAL’s One Pro that blends virtual overlays with the real-world environment. As technology companies continue to innovate, XR devices are becoming more powerful, lighter, and increasingly affordable. At the same time, content owners are beginning to invest in compelling immersive experiences – driving growing consumer interest and appetite for XR technologies.
Opportunities for OTT Providers
XR allows video services to create immersive experiences that truly capture users’ attention. Beyond engaging viewers on a deeper level by enabling them to experience the content rather than remain passive spectators, the interactive nature of XR opens up new and powerful opportunities for OTT providers to engage audiences in richer ways.
What this looks like in practice will vary by content type and genre. Live events such as music concerts can offer alternative camera angles alongside sponsored immersive experiences; reality TV can introduce overlaid contestant profiles, interactive polls, and live voting; while other formats are particularly well suited to interactive, gamified elements.
Producing immersive content involves a different approach to video creation and can involve specialized camera systems designed for spatial and immersive capture.
For sports content, XR can provide viewers with multi-cam experiences, real-time statistics overlays, and live spatial data visualizations, unlocking a more engaging and contextual way to experience live sport. Fans can become their own directors, freely deciding how they want to watch the game by switching between multiple camera angles, replaying key moments through immersive highlights, or even viewing the action from several perspectives at the same time. Experiencing the game from close proximity heightens emotion and intensity, making fans feel truly present at the heart of the action.
Immersive content also opens up opportunities for personalized advertising, enabling brands to create more meaningful and interactive viewer experiences. Through spatial computing, advertisers can engage audiences in ways that go far beyond traditional formats, as advertising assets can now be placed directly within the user’s physical space and immediate surroundings. Viewers could interact with a 3D model of a product such as a running shoe, examining it from every angle, holding it in their hands, or even trying it on virtually to see how it looks in real time.
Hurdles to Adoption
However, while it seems mainstream XR adoption is edging ever closer, there still remains several key challenges that need to be addressed. One of the most pressing is the limited availability of immersive content for XR device owners. At the same time, producing immersive content introduces additional technical complexities across capture, processing, distribution, and playback.
Producing immersive content involves a different approach to video creation and can involve specialized camera systems designed for spatial and immersive capture. Beyond the hardware itself, immersive production also requires new ways of working and, in some cases, different skill sets. Cameras are often positioned closer to the action to create a stronger sense of presence, and shots that work well in other viewing formats may feel awkward or disorienting when experienced spatially.
Field of view is another important consideration. Apple, for example, has placed a stronger focus on 180-degree immersive video rather than 360 degrees, as this helps guide the user’s attention toward the action. By concentrating resolution in the forward-facing field of view, image quality and detail can be optimized where viewers are most likely to look.
Immersive content productions generate significantly larger volumes of data, creating a number of challenges for content production workflows, particularly around data transfer, processing and storage. As a result, end-to-end workflows must be designed to handle and manage substantially higher data throughput and complexity. This, in turn, drives the need for greater computing capacity, optimized infrastructure, and more advanced video compression technologies, such as multi-view codecs including MV-HEVC, which are used by platforms such as Apple and Meta.
Learn and Experiment Now to Benefit Later
As the video streaming industry navigates XR’s transition from early experimentation to commercialization, it’s becoming increasingly important for video providers to position themselves early so they can benefit from this growing market. XR is unlikely to transform OTT overnight, which gives providers the space to experiment, build capabilities, and better understand what viewers actually want, as well as what works best in spatial environments.
Strategic partnerships and initiatives such as the XR Sports Alliance play a key role in accelerating the commercialization of XR experiences by providing a collaborative framework for structured experimentation, shared learnings, and ecosystem alignment.
The work happening now will influence how content is experienced in the coming years, and OTT providers have a clear opportunity to help shape that direction,while also unlocking new paths to monetization.
