- January 18, 2016
- Posted by: Kauser Kanji
- Category: Strategy, VPLegacy, VR (virtual reality)
VR will have its first billion-dollar-year in 2016. How can broadcasters start preparing for this new way of consuming content?
We’re barely halfway through the first month of the New Year and virtual reality looks like being an industry hot topic this year. The subject has been bubbling under for quite a while already – one only had to walk the halls of IBC last September to see that a number of high-profile industry suppliers were showcasing VR solutions that covered everything from content production to user interface to video delivery (you can read our review about some of them here) for the first time.
A small minority dismiss the idea that we will all be strapping a little box to our face to watch TV as nonsense, believing the technology to be a more intrusive version of 3D TV. But for many the conversation is much more optimistic – there seems to be a larger sense of certainty this time around that VR is going to have a big impact on the media industry and everyone should be preparing themselves for massive consumer uptake.
I’ve jotted down some thoughts below from key industry professionals on why virtual reality could potentially revolutionise the way we consume video, how it can be designed for and monetised and why it is not simply 3D TV reborn.
#1. Consumer Interest is at an All-Time High – and it’s Not Slowing Down
First, some context. Just how big is virtual reality expected to grow? There have been a number of studies released in the past few weeks which try to answer this question.
Research from Deloitte suggests that VR will have its first billion-dollar-year in 2016, with around $700 million spent on hardware and $300 million on software and content. The Consumer Technology Association, which owns and produces the industry conference CES, claims that over 1.2 million VR headsets will be shipped in the coming 12 months, representing a staggering 500% growth. The most optimistic estimates forecast that the combined AR/VR markets will be worth $150 billion by 2025.
Not bad for a technology that two years ago only generated around $90 million.
What’s fuelling this growth? The answer is two-fold:
- The availability of cheap, mobile VR headsets like Google Cardboard. These “do-it-yourself” kits are available for around $10 and hold a smartphone on which you can enjoy VR content (you may have even picked one up yourself on the Akamai stand at IBC!). Whilst these devices lack the technical wizardry seen in the Oculus Rift or PlayStation VR, they will most likely propel the initial popular uptake of VR;
- Content producers/distributors are starting to spend heavily on VR. Take, for example, a $65 million cash injection into Jaunt, a cinematic VR firm, by Disney. Or CNN announcing that it would live stream the 2015 Democratic debates in virtual reality. Or the NBA making history as the first organisation to live stream a professional sports game in virtual reality. Investments made in VR programming, both by multi-national corporations and sole filmmakers alike, will help drive innovation and incentivise consumers to get their hands on a headset and try the technology out.
This second point is important. One of the main reasons VR has a better chance of succeeding where 3D TV failed is that there is a recognition from the industry that without the content, VR headsets are essentially worthless. Phil Birchenall, Projects Director at K7 Media, told me:
There’s a notable difference between the build up to VR and the launch of 3D TV. In terms of sales, 3D compatible TVs exploded onto the high street; yet there was a dearth of content you could actually watch on these, save for a handful of blockbusters. With VR, it feels that the approach has been turned on its head. You get the sense that when VR hits the retailers there will be a flood of content ready and waiting for people to explore. Right now you can already watch 360 degree videos on a smartphone, so we’re already being conditioned.
As more and more VR-friendly content hits the digital shelves, and the availability of appropriate hardware grows, consumer interest will only continue to increase.
#2. A Cause for Differentiation
So what does all this mean for broadcasters? Won’t VR remain a niche entertainment technology, taken up solely by the hardcore gamer community and few others?
I think not and Mark Zuckerberg agrees with me. At a Facebook developers conference last year he said “when you think about virtual reality, a lot of people first think about gaming. But I actually think video is going to be more engaging in a lot of ways.”
The most common use case for VR in video entertainment is the opportunity to offer thousands of individuals match-side views from their favourite sporting event from the comfort of their own home. But this is just scratching the surface. VR will open a whole new world of storytelling and spawn a host of new communities, service providers and avenues for VR experiences that will also compete for the attention of viewers.
Niklas Björkén, Technical Director of Innovations at Accedo, believes that the broadcasters of today need to act quickly in order to get their foot in the VR-door. He said:
Video service providers are in a good position to make a statement with virtual reality. Users already have the mind set of “I go to my VOD provider to watch the latest episode of the show I love” or “I really want to watch a movie, I wonder what’s new with my VOD provider.” By getting in early, broadcasters could also cement an attitude in users that “my VOD provider is where I go to get all the latest VR experiences.”
It’s not simply a case of regurgitating existing content in a VR-friendly format however. It would be incredibly disorientating (not to mention terrifying) to watch The Walking Dead virtually. Instead, broadcasters have to create programming made exclusively for VR rather than thinking the technology is simply another screen on which to watch regular TV. Birchenall says “you have to rethink why you’re using a camera in VR, rather than just deciding what to point it at” and suggests a few great examples of how VR is currently being utilised by broadcasters:
- Discovery VR – “Perfect example of VR being used to add a dimension to a content that you‘d be unable to without the technology.”
- ABC News – “…is pushing the envelope in news reporting with VR, having launched a 360-degree tour of the Syrian capital of Damascus.”
- Red Velvet – “Scripted content is really difficult to get right in VR: how do you create an interesting narrative when the viewer is free to look wherever they want to? Red Velvet is a comedy short that achieves this exceptionally well, in what is a frankly surreal mix of The Office and performance art.”
#3. Designing in Virtual Reality
Device evolution over the past ten years has meant that designers of on-demand services have been forced to quickly adapt to compete in an everything/everywhere environment. Whilst a majority of broadcasters and service providers have deployed at least an MVP across most of the popular platforms, virtual reality is an entirely new environment in which the traditional rules of UI/UX no longer apply.
I asked Björkén to share some insight into the additional considerations that must be made when designing an interface for VR (Accedo demoed a prototype of a VR UI at IBC which you can read about here).
There is a huge difference designing for VR against other, more common platforms. There are so many paradigms coming together in a UI/UX design for VR, especially for apps. You have the 3D factor, you have the omnidirectional real estate to work with, and not least people’s expectations for futuristic UIs. For video apps, putting people on a virtual couch in a virtual room with a virtual big screen TV is only going to go so far. There will need to be more profound video app experiences to capture the audience.
A major pain point will be for broadcasters to figure out exactly how users can engage with content once placed inside a virtual environment. A number of input mechanisms are currently being experimented with in the wider VR community – joysticks, motion sensors and wireless gloves among them – and none are yet close to becoming the industry standard. Björkén predicts that it will still be “another year or two” before things settle down and a de facto input mechanism emerges.
As in most cases, simplification is often key. That’s why Accedo have been experimenting with a hands-free UI where a user can interact with the video player by simply using their gaze. The company’s ‘Project Himalaya’ enables the viewer to navigate through content catalogues, select titles and adjust settings all through the power of tracked head movements.
I got to see the project at IBC and, whilst there are still a few kinks to iron out, it was certainly an impressive first crack at VR UI design. Accedo opted to go hands-free because:
[Actively] looking at UI elements to engage with them is a fairly intuitive thing for most people, and this technique also helps us focus on the bigger picture while the VR is riding out the input fragmentation storm.
#4. Monetisation Models
The online video industry is currently at a critical point in its life – the majority of service providers around the world have now launched their OTT service on all devices, are getting to grips with legacy upgrades and are only now beginning to wonder how they’re going to start making money from their investment. The same cycle will most probably hold true for virtual reality as well. After an initial development stage, and subsequent fine-tuning, attention will be turned towards monetisation. So just how will it be done?
Birchenall, Björkén and Steve Dann, Founder and CEO of digital development studio Amplified Robot, all believe that the existing models for content will continue to thrive, particularly subscription-based services and targeted advertising.
Björkén expanded on this:
I think that as VR content innovation evolves, new business models will open up for broadcasters and service providers. It’s extremely early days, of course, and my guess is that we’ll probably see VR more as a differentiator for the content or for the service than as direct monetisation over the next 3-5 years.
A couple of people I’ve spoken to about virtual reality over the last few months have expressed a concern that the technology will go the same way as 3D TV – there will be a lot of hype, manufacturers and service providers will pour significant amounts of money into trying to make it happen but ultimately it will be shelved and forgotten.
I don’t think that this will be the case. 3D TV taught us some valuable lessons in how not to launch a new technology and broadcasters are making positive steps in the right direction to get VR going. Just how much it will transform the entertainment industry is still, of course, yet to be seen. But I have a feeling 2016 will be the year where we find out whether the technology can gain some serious momentum and change the way we consume video.
What are your thoughts? Is VR the “next big thing” or a flash in the pan? Tweet me @consultVodkr