A seasoned television producer friend of mine tells a great story about his biggest missed business opportunity. It was in the 1980s and he was at the Edinburgh Festival Fringe. He wandered into a small room where two young Japanese women had set up a large television set, a small PA system and two mics.

The two Japanese women then turned on the TV and began to sing along, badly, to some rather cheesy Western pop songs he knew and a few Japanese songs he had never heard of, as the lyrics were shown on the TV set.

When the women finished, the TV producer and the few other people in the audience filed out completely bewildered by the whole experience.

He later overheard one member of the audience talking to a friend saying: “You know that is meant to be the big thing in Japan.” The other replied: “Japan is very strange, singing along badly to pop music will never catch on here.”

My producer friend had, of course, just witnessed one of the first examples of karaoke in the UK. A global industry now estimated to be worth $13.5bn, and he had walked away laughing at it. Even if he had thought it would never catch on in Britain, and simply invested in Japan, he would have made millions. In Japan, the industry is now several times larger than its entire movie sector.

Are there modern equivalents? I moved to Beijing back in 2015 to find out. I now firmly believe that Asia in general, and China specifically, has a great deal to teach the UK, the rest of Europe and other established markets. I also believe that there are huge untapped media opportunities here: opportunities for media professionals in China itself, and opportunities to take successful Chinese media models and apply them in the UK.

"In just four years’ time, one out of every five dollars spent on AR/ VR will be in China, and the Asian market will be worth more than the rest of the world put together"

One example of both is augmented reality (AR) and virtual reality (VR).

China is investing heavily in both these technologies. A recent report by Digi-Capital into the state of the industry predicted that China, in terms of revenue, will soon overtake the US in the AR/VR market.

The website TechCrunch describes the business “as a golden opportunity (or threat) for domestic and international players”. In just four years’ time, one out of every five dollars spent on AR/ VR will be in China, and the Asian market will be worth more than the rest of the world put together.

The AR/VR revolution also has the full backing of local and central government. In March this year, the Shenzhen regional government, along with electronics company HTC, announced a new, $158m fund to incubate AR/VR ventures.

So, the big question for UK and other non-Chinese media companies is how to take advantage of this opportunity.

As the chief international editor for China Global Television News (CGTN), I see the primary opportunity in content production. In my experience, Chinese media organisations excel in hardware production and other technological areas. But when it comes to producing content, they lack creativity and an in-depth understanding of what audiences want.

Kevin Chen, President of Shenzhen State VR Ventures –the man in charge of that $158m government fund – echoed this sentiment in a recent interview. He said that “China is currently lagging in terms of high-quality content, which is one of the West’s major strengths”. This is also the view that an ex-Disney executive, currently working in AR/VR production, expressed to me over lunch recently. He had consulted on AR/VR projects in the US for organisations such as the New York Times but felt strongly that China, rather than the US, was where the big opportunities were.

However, the same former Disney man also offered a word of caution that US and European consumers were very different to those in Asia. He believes that AR/VR experiences in the US or Europe are often thought of in terms of something you can do at home or as an “add on” to your mobile phone. In places such as China and Japan, consumers are far more likely to go to places and pay for an AR/VR experience.

This would explain why, in 2016, Japan built a simulation airplane that never takes off: people sit in their seats and “virtually” go to their destination. And it is doing really well, having been fully booked since it launched.

China recently opened the world’s first virtual-reality amusement park, covering 135 hectares. All 35 rides feature VR experiences.

But AR/VR opportunities in China are not just at the high end. Walking around Beijing, I regularly see small booths and shops charging around $5-$10 for a 30-minute AR/VR experience. Again, China is leading the way. There are an estimated 3,000 shops offering these.

China is also looking for strong cinematic and television AR and VR content. At this year’s International Film & TV Program Exhibition, hosted last month in Beijing for the first time in its 15-year history, VR and interactive experiences were part of the programme.

Knowing the great content that UK companies are able to produce for conventional television and film audiences around the world, it is not difficult to imagine how it could be adapted to fulfil the ravenous Chinese demand for AR/VR content.

High-quality, natural-history content that can be turned into VR safaris or scuba-diving; science-fiction and fantasy content that can be brought to life; and even world-famous tourist attractions and museums that people can visit without ever having to apply for a visa. I could go on and on. Suffice to say, these would all be very attractive to Chinese audiences.

From broadcasters such as CGTN, which is looking for documentary content, to amusement parks looking for their next big ride, the range of opportunities is considerable.

I think back to my producer friend and the missed business opportunity he experienced almost 40 years ago, when he witnessed the dawn of karaoke. If I had to pick a song to sing about AR/VR in China, it would have to be Abba’s pop classic, The Winner Takes It All. 

Marcus Ryder is chief international editor of China Global Television News.