Media companies are welcoming VR with open arms (VZ)
REUTERS/Ina Fassbender
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Virtual reality will either be a rousing success or a horrible bust depending on whom you ask, but one industry is embracing this technology right from the get go.
The entertainment industry is taking VR far more seriously than previously expected. HBO and Discovery Communications announced Tuesday a $300 million investment in a 3D graphics startup called OTOY, according to the Los Angeles Times.
And on Wednesday, AOL (owned by Verizon) announced that it had acquired RYOT, a company that specializes in VR and 360-degree video production, according to the Wall Street Journal. Later that day, Sony said its ad-supported streaming service Crackle would debut a VR experience for users and advertisers.
Consumer adoption of VR tech is still in its infancy, but these companies' investments in VR tech shows that media companies are taking it seriously.
VR creates deep and immersive experiences that literally bring the user into the story, which creates a tremendous opportunity for entertainment companies to appeal to consumers in new ways. RYOT, for example, can produce content for AOL's network (which includes The Huffington Post), while OTOY will work on holograms for Jon Stewart's new HBO show.
Ultimately, these types of experiences should stimulate user engagement and viewership and even pull in new audiences.
VR also creates an opportunity for media companies to access ad dollars. RYOT can create branded VR content for AOL's client partners, while Sony will let advertisers overlay their ads inside Crackle's VR theater.
Media companies can use VR to create targeted and innovative brand placements and sponsorships to generate ad revenue. Goldman Sachs expects VR entertainment to generate $3.2 billion in revenue by 2025.
The tech industry has promoted the prospect of VR for the past few decades. But only now, with headsets backed by big names like Sony and Facebook, is VR finally becoming a concrete product with mass market potential. While VR technology is largely associated with the gaming industry, the platform offers a new set of content opportunities in entertainment, advertising, and more.
But where is it all going?
Margaret Boland, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on virtual reality content that examines how various VR headset categories will shape VR content development and looks at the trajectory for mobile gaming revenues to get a sense of how spending on VR content might develop. The report also lays out what types of content users and developers can expect on VR platforms, including gaming, video entertainment, and advertising.
Here are some key takeaways from the report:
- VR headset manufacturers are driving both the development and distribution of VR content by investing significant technical and monetary resources in developers, in an effort to build up an exclusive content library.
- High demand for VR headsets by mobile and console gamers will fuel demand for VR content. The VR content market will take an increasing portion of the mobile gaming software industry.
- Beyond gaming, VR video entertainment will remain short form until demand for VR headsets increases.
- Ads featured on VR headsets will likely have higher view-through rates than standard video ad spots.
- Other industries are also beginning to experiment with VR content. Travel companies, publishers, e-commerce merchants, and social platforms are beginning to see potential in this new category.
- VR content faces major hurdles that could keep developers from investing: The VR experience must be good enough for people to take up the devices. In addition, developers need to know that a sufficient user base exists to be worthy of the resource investment in VR content.
In full, the report:
- Provides a breakdown of each type of VR headset, what platforms they run on, and how content will differ for each.
- Includes estimates for global VR headset shipments by category.
- Includes a mobile gaming forecast to give a sense of the most important market that will drive spending on VR content in the next five years.
- Lays out what other industries are developing VR programs.
- Discusses some of the potential barriers that could dissuade developers from investing in VR content.
To get your copy of this invaluable guide to the VR universe, choose one of these options:
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the world of VR.