IBC
It's still very early days for Virtual Reality (VR) and there have been predictions for its disruptive impact on everything from filmed entertainment to journalism. Although it is difficult to predict the impact, it is reasonable to expect that VR will not repeat the failure of stereo 3D.
According to Ampere analyst Andrew White, VR does not compete with standard video in the same way that 3D did since there is no way to convert 360-video to 2D while retaining the original context. VR, he suggests, should be seen as an entirely new medium, running in parallel or as a companion to TV and movies, rather than as an evolution of them.
JPMorgan Securities forecasts VR to be a $13.5bn industry by 2020 mainly comprised of hardware sales topping 89.3m units. Growing sales of consumer gear are predicated on content to watch but here too production seems to be moving at an astonishing pace.
While video games remain the big initial content draw for consumer VR, likely to be given a boost when Sony debuts Playstation VR in October, movie studios and filmmakers are extending their ambition from short marketing promos to longer form stories. A first feature length VR action movie is planned for release in 2017 by cinema motion-seat developer D-Box and The Virtual Reality Company, a producer which counts Steven Spielberg as a shareholder.
To mention just two of many significant investments in this space, VR display maker HTC recently earmarked $100m for content, and Disney invested $65m in 360-video camera maker and producer Jaunt VR.
Facebook arguably kicked off the current surge with its $2bn purchase of Oculus Rift in 2014. Since then, Facebook and Google have developed an ecosystem for VR from capture to distribution. Google will next launch Daydream, an advanced operating system for Android complete with Daydream-ready phones, and motion controllers; while Facebook has its own 17-camera rig design pending. Google is also making a cinema-style VR camera with IMAX – which is launching a number of physical VR cinemas this year.
Broadcasters have spent the year road-testing VR on everything from documentaries to talk shows with most of the development focussed on live events.
“Currently, there is a joint industry initiative to make the technology work and drive uptake by enticing customers to the platform with free content,” says Futuresource Consulting analyst Carl Hibbert. “As soon as consumer payment becomes a core component, rights will become a major issue – whether that’s sports, concerts or other types of event.”
Sponsors are already investing. Automotive brand Lexus sponsored The Open Golf produced by US VR live stream specialist NextVR for Fox Sports. NextVR plans to test subscription and single view pay-per-view models this year, mostly around live music events. “2016 is a year of audience building. We are not going to put a paywall in the way of audience aggregation,” says co-founder Dave Cole.
VR opens up new opportunities in advertising on multiple fronts. “An entire industry is growing around promotional VR experiences,” notes White. “VR offers the opportunity for brands to touch consumers in ways which were previously unthinkable. With YouTube and Facebook both offering platforms for 360-video, more conventional agencies will see new channels opening up for immersive advertisements.”
Outside of gaming and entertainment VR has a future in all manner of industries from flight simulation to architectural fly-throughs. Applications in education including teaching via virtual classrooms and providing digitized campus tours to prospective students. VR is also making exciting strides in the healthcare market. Indeed, the global AR and VR healthcare market is poised to grow at a CAGR of around 17.8% in the next five years to reach $1.45bn by 2020 [Research and Markets]. Earlier this year the first live broadcast by VR of a surgical operation was streamed from St Bart's hospital in London.
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