Conference Report: New York Media Festival 2016
The 2016 edition of the New York Media Festival took place during the last week of September. Each day of the event focused on a different area of the media industry. Day one was dedicated to music, day two to games, and day three to television.
The leading theme of the festival was virtual and augmented reality (VR/AR). In this report I highlight the key issues regarding this subject.
The definition of VR/AR is still unclear
One of the main problems of the VR/AR discussions is that VR/AR is defined in many ways. VR is usually understood as a realistic and immersive simulation of a three-dimensional environment, created using interactive software and hardware, and experienced or controlled by movement of the body. However, some people consider 360 videos watched on mobile phones and laptops to be VR as well and some not. In addition to these, there are a lot of nuanced variations of the definition as new forms of VR emerge all the time.
The same issue concerns also AR. For example, experts do not consider Pokémon Go to be a real AR product but simply a location-based application with some additional features. All in all, this situation reflects the fact that VR/AR is still relatively new phenomenon in the market and lacks standards.
The chicken and egg situation
It was stated in several discussions that the forthcoming few months are very important for the future of VR/AR as many major players will launch new equipment, platforms and content. There will be more equipment and content available for affordable prices, and there will be much more marketing than so far.
However, VR/AR is still something primarily for early adaptors and heavy-duty gamers, and average consumers do not rush to buy VR headsets and powerful laptops they still require.
As with any new media technology, in order to get the market going, good content is crucial to drive the hardware sales. And, vice versa, hardware manufacturers are not pushing hard if there is not good and attractive content available. The result is a classic chicken and egg situation.
From investors’ point of view the current VR/AR market situation is very challenging. The amount of companies dealing with VR/AR is booming, and legacy media companies are also getting into the game. There are, for example, game publishers, content producers, software and platform companies and large number of start-ups who have jumped the bandwagon.
At the same time, big companies from other business areas are also actively looking into the possibilities of VR/AR. Furthermore, consumers start producing and sharing their own VR/AR content through various platforms as well, so there will be a push from both top company and grassroots level.
Investors have to choose now between making hundred bets or just one. They can lean forward and invest now, or lean back and wait and see what happens, and make their moves only when the market is more mature. It was stated that there is nowadays a gap between the time frame expectations around VR/AR as most investors expect generally much faster results than the other parties, who predict that it will take still several years before the size of the VR/AR market gets substantial.
VR content: old, new, borrowed and blue
Good VR/AR content was generally considered to be the most important factor to raise consumers’ interest towards VR/AR equipment and services. Many speakers complained that, currently, there is too much VR content of low quality and sloppy-made 360 videos and too little premium VR/AR content available from the existing platforms.
Many players are hesitating to invest into premium VR/AR content for several reasons. Firstly, premium VR/AR content is still very expensive to produce and there are no commonly accepted technical standards and common distribution platforms in place yet.
Secondly, VR/AR is still a novelty thing for consumers and there is not yet data enough on what kind of content and in which format will work best for consumers. This depends also on the equipment people are using, as mobile phone or traditional television cannot produce the same kind of immersive experience as the headsets. Thirdly, the way of monetization of VR/AR content remains an open question. For example, how do you sell and place ads into VR/AR content and how do you measure their effects?
Different kinds of players have different kinds of VR/AR content strategies. For example, out of the major players a representative of Sony told that the company has three different lines of production: creating additional material to the previously existing material, producing VR/AR experiences for movie theatres, and original VR/AR content.
Another challenge is to explore and find suitable ways to tell stories with VR/AR. In this respect the second season of the TV series Mr. Robot is an interesting case. NBC has experimented and produced some VR content for enhancing the hallucination scenes of the main character Elliot Alderson, and tested various ways to edit and mix it with the regular material.
A look into the VR/AR crystal ball
All in all, VR/AR is still in its infancy. It will still take several years for it to take off properly, and nobody seemed to be sure what kind of content will eventually dominate the market. Some experts said that the real killer applications will probably be created by people who are still in school, because they will have a totally different kind of take on VR/AR and storytelling than the media professionals of today.
One of the speakers described that the current VR/AR discussion reminds him of the early days of mobile gaming. Most professionals said that people would never use their phones for playing games. What is needed now are efficient ecosystems and lowering thresholds to experiment and innovate.
The future of VR/AR will most probably be diverse. On the other hand, there will be a market for sophisticated headsets and premium content, which is enjoyed in solitary. However, it has already been proved that immersive experiences of premium quality can also be enjoyed collectively like in the case of Field Trip to Mars. In any case the interaction between individual VR/AR users remains a big challenge.
On the other hand, there will be a lot of less immersive and less-than-premium material available to be used mainly with mobile devices, tv sets and laptops.
When Edison launched his phonograph almost 140 years ago, he visioned various potential uses for the new technology. However, he did not foresee that his invention would be used mainly for music. Could history repeat itself and show the other way round that, after all, the biggest potential of VR/AR does not lie in media but in useful purposes in areas like medicine, construction business, travelling, and education?