By Sahil Patel
At a private “CEO lunch” during the recent DEW industry conference, executives from a broad range of companies discussed the current and future state of digital entertainment. Naturally, they explored a variety of issues, from measurement to new and disruptive distribution models; but one thing, above else, was top of mind for almost everybody in that room: virtual reality.
That should come as no surprise. Ever since Facebook acquired VR technology and devices startup Oculus VR for a cool $2 billion, Hollywood can’t stop talking about VR. When Facebook announced the deal, its founder and CEO Mark Zuckerberg told analysts that Oculus is the “clear leader in something that has the potential to be the next important, or one of the next most important computing platforms.”
But what does that mean for video and entertainment?
Broadly speaking, “computing platforms” have already disrupted the worlds of film, TV, and advertising. What VR offers, though, is something completely new. It’s not just another screen to watch video content on, it’s a completely different type of video content.
It could be revolutionary, no question. Before then, though, it has a few issues of its own to overcome — chiefly, is VR even something that people want?
“That’s a loaded question because you’re preaching to the choir,” says Matt Apfel, VP of strategy and content at Samsung’s Media Solutions Center America, which encompasses the company’s VR video platform Milk VR, one of the early content and manufacturing bettors in the space. “VR is a significantly different experience from TV, or mobile video, or online video, so the big question mark going into this was: is it truly different enough to make people notice?”
To Apfel and the Samsung team, based on its initial investments in the VR space and the feedback they’ve received from those who’ve expressed interest in, seen, and/or used the Samsung Gear VR, the answer is yes.
“It becomes a question of time,” he adds. “Will it take eight months? Will it take 22 months? Will it take four years? Hopefully, it’s eight months, but I think it’s only a matter of time before people come into this ecosystem and realize that I don’t have to throw away my TV set, I don’t have to put down my phone… Eventually, you’re going to have this as another way to experience content, just in a different, more immersive way than you do on the screens that you already have.”
Thankfully, VR already has a core audience of “enthusiasts” that developers and manufacturers can sell to. Many of them are also gamers, who are pretty used to (and generally passionate about) interactive entertainment. As they have done for gaming, these individuals can play a major role in how VR content, products, and services are made.
“One of the things we don’t want is for someone to buy it without knowing what they’re getting into,” says Nick DiCarlo, who heads Samsung Gear VR. “So it was really targeting that enthusiast community — we put it out in a limited fashion and got feedback, and the feedback has been overwhelmingly positive.”
That said, for VR to succeed, it can’t become a fad; it has to be mainstream. Here, the other important element of VR as a content format comes into play. “You think of virtual reality and the first thing you think of is gamers,” says DiCarlo. “The second thing a lot of people think of is video, and video, we think, is the big opportunity because it’s something that everybody does.”
This is why Samsung and others in the VR space have been working with various premium video content
providers — from established film studios like Fox to emerging media giants like Vice Media. The hope is that by making VR appealing to content creators across a broad spectrum of specialties, their fans will follow.
“There are very few humans who have seen VR content,” says Ted Schilowitz, a futurist at Fox who was behind a short VR film Fox made as a complementary piece to the Reese Witherspoon-starring film “Wild.” “As a commercial product really starts to hit the market and more content gets generated, this is going to be another mainstream choice for entertainment.”
Of course, aside from having an audience interested in the format and engaging content that fits the format, VR needs to be accessible. There’s a few ways to do that, according to DiCarlo, from tethering it to smartphones and other consumer products that are already in the hands of millions of users, to making the input system intuitive. The Gear VR, for instance, has inputs on the side of the headset, with controls that are easy to learn and use.
All of this goes to show that there is an opportunity for manufacturers and technology developers to usher VR into the mainstream. If people are interested in the format, and affordable devices are available for purchase in the market, and talented creators are making interesting content for those devices, then VR could certainly catch on beyond the hardcore enthusiast base.
But all of that, including the revenue potential for VR creators, developers, and distributors, is still very far off.
“We’re not going to try to make a profit off the devices long term. We view this as a software and services thing,” Zuckerberg said in that earlier interview. “Where if we can make it so that this becomes a network where people can be communicating and buying things and virtual goods, and there might be advertising in the world, but we need to figure that out down the line.”
“I think we’re looking at all the different ways to monetize the platform, whether it’s through sales, through sponsored integrations in the device,” adds Apfel. “The genius of this ecosystem is that it’s so new that we’re kind of feeling our way around and preparing for lots of different monetization opportunities.”
It also serves as a temporary cover from those, like us, who like to ask questions about the viability of VR as a creative and business outlet. It’s easy to see how Facebook or Samsung might make money by selling
VR headsets, but for creative types, will it ever be as commercially viable as TV, film, and (to a lesser extent) online video? Can revenue models that have long been used on other platforms be successfully applied to VR? Will we ever see VR pre-rolls? Or will it go the way of paid content, with users subscribing to services such as Milk VR or paying for individual films and series? Or will it be something completely new?
All important questions. All that don’t have — or need — answers right now.
“However we figure that out — it’ll be a creative challenge,” says Apfel. “For us, it’s a content-starved environment, so we’re hoping to focus on content production and helping this ecosystem grow.”
This article is part of VideoInk’s “VI Goes VR” special issue, which explores the current opportunity and future potential in virtual reality for the entertainment industry.
For more insights on all things VR, join us at our special event in Los Angeles on February 26, where we will discuss and showcase what VR has to offer.