Building the Virtual Reality Business

After years of being seen as a futuristic illusion, Virtual Reality has matured into a serious industry phenomenon, emerging as the new dimension in the converging world of media, entertainment, and technology. Widely touted as the next universal frontier that is about to be crossed, analysts predict that VR is well-positioned to revolutionize the traditional spectrum of media activity, from filmmaking to gaming, and social networking. As a result, VR has raised significant interest in the media business, specifically for its promise of total immersion. The concept of sealed-off immersive environments completely focused on user/consumer engagement, on “being there,” is an extremely valuable prospect for both storytellers and advertisers.

Accordingly, the current use of VR is heavily centered on promotional events. Content providers and IP holders increasingly entertain the services of expert producers to “VR” their marketing campaigns, to make them more interactive and experiential. Notable trends include coverage of live events, movie pre-release advertainments, extended TV experiences, and brand-sponsored initiatives. Small boutique production vendors are leading the way but key industry players like Disney and DreamWorks have recently launched in-house innovation units to invest in VR. Experimentation with and development of content is the key driver of VR but the technology’s main challenge lies in evolving from a novelty into a utility.

Virtual Reality needs a strong and growing user/consumer base to enter the mainstream. Not surprisingly, VR’s main investors are leading technology companies, especially those focused on platform and hardware services. In 2012, Facebook acquired Silicon Beach startup Oculus Rift for $2 billion, launching an industry-wide investment spree. The company has since released upgrades of its consumer headset and opened a virtual film studio to help storytellers shape content development. Oculus is an integral part of Facebook’s corporate mission strategy to make the world more open and connected, allowing users to share a place and presence, according to the company. Another major player is Samsung which seeks to leverage VR to expand the mobile web. Samsung’s VR Gear, a consumer headset, facilitates seamless smartphone integration. Additionally, the company recognized the need for content offering and struck partnerships to support its product launch with a content slate. Sony, a long-standing VR proponent, launched Project Morpheus, a headset expected to fit into the company’s multimedia strategy, most notably via the Playstation network.

The Virtual Reality business is in a crucial stage of development, with 2015 seeing the release of several direct-to-consumer initiatives. VR’s integration into existing services is designed to showcase its viability while content delivery pipelines need to be put in place to ensure broader adoption and usage. It is a time of opportunity and challenge for content and technology companies as they work to lay the foundation for VR to be more than just another fleeting gimmick.

Further Reading

Virtual Reality isn’t just for video games,” Los Angeles Times, January 2015

Virtual reality is going to change everything,” Business Insider, November 2014

The Rise and Fall and Rise of Virtual Reality,” The Verge,August 2014

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