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VR: Virtually a Reality?

Virtual Reality is becoming part of the furniture of all media business conversations in the way that 4K did three or four years ago and 3D did seven or eight years ago. Which one will VR go on to resemble – the one that is becoming a standard for TV and marks the beginning of a linear march to extreme UHD, or the one that was a fad and faded away because it was a brilliant concept weighed down by too many contradictions and compromises?
You could say the omens are not good – VR and 3D share the necessity to wear something on your face. They also share the chicken-and-egg challenge of little but very expensive content.
But that doesn’t daunt proponents such as Ike Elliot, SVP Innovation of Cable Labs, who told Cable Congress here in Warsaw that there were just two kinds of people; those who thought VR was going to be massive, and those who hadn’t seen VR yet. To prove the point, he showed videos of consumer first-timers being blown away by their VR experience driven by a Galaxy 7.
Others pointed out that unlike with 3D, it was not a standing start for VR TV as the games industry was embracing the technology now and would be handing over a conditioned audience and plenty of production skills.
Also, no one doubts the HMDs (Head Mounted Device) will get better and so will the phones that already have ubiquity among the initial target audience. So, what can go wrong? There are several non-trivial challenges in the QoS in terms of bandwidth and compression required – upstream as well as a key driver is likely to be interactivity and social features. This will be needed to get around what some perceived as another major drawback – the isolation of the current VR experience.
Then there’s the need for better 360 cameras and the workflows to go with them and the development of production techniques to use them to best effect. Alain Nochimowski, EVP Innovation at Viaccess-Orca said some of their trials showed that what worked for one event, basketball for example, was hopeless for another in terms of camera numbers and positions.
This is all pretty expensive, so what are the monetisation opportunities? All were clear that it is not yet clear who fits where in the ecosystem. Advertising is a possible revenue stream, particularly when exploiting the ‘heat map’ of engagement data that can flow out during use, but over intrusion is an obvious objection. Perhaps it will be a high-tier only pay-TV option, or perhaps selling the gold standard bandwidth needed (including via WiFi) will be the service providers’ best bet.
As Ankur Prakash, VP Liberty Global Ventures, pointed out, the bar is being set very high. Goldman Sachs has predicted VR to be a $80 billion business by 2025: Facebook is currently a $300 billion company and averages 40-45 mins attention a day from 1.5bn+ users, so will VR be achieving a third of that in 10 years?
There is no question VR is exciting and engaging, but it is exciting the consumers and the engineers the most so far. The sales forces and the business planners are keeping it under control, for now at least.

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