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Virtual reality distribution gets real.

Virtual Reality Distribution Gets Real

November 7th, 2016   ||    by Todd Wasserman   ||    No Comments

Virtual reality distribution may not yet be high on many marketers’ list of concerns, but 2016 was clearly a breakthrough year for VR. Will this unusual new medium be subject to the kind of programmatic approach we’re seeing elsewhere?

The emergence of virtual reality distribution depends on a few things, including the growth of VR media, the development of the medium as a conduit for shared experiences rather than individual ones, and the public’s enthusiasm for the technology.

AdExchanger reports that the VR startup OmniVirt has introduced a VR programmatic platform that lets users upload VR and 360-degree content that they can customize, generate ad tags for, and distribute via the MoPub, DoubleClick, Sizmek and OpenX ad platforms. One recent campaign involved a program for GE that ran in The New York Times this summer (and was covered by MediaPost). Will more follow?

VR’s Distribution Problem

The highest-profile VR device, the Facebook-owned Oculus Rift, has been the subject of speculation in the tech industry for some time. However, its release this year has been anticlimatic—plagued by shipping problems, a higher-than-expected price, and even the political views of Oculus founder Palmer Luckey.

At a recent developers’ conference covered by Fortune, Facebook CEO Mark Zuckerberg acknowledged that the product was off to “a bit of a slow start.” Zuckerberg didn’t disclose Oculus sales figures. Facebook bought the company for $2 billion in 2014, as reported in outlets like TechCrunch.

The Oculus Rift is not the only device to suffer from tepid sales. So far, rival manufacturers like HTC and Sony have been similarly loath to release sales figures. Estimates for overall sales of VR devices this year range from 20 million units on Tractica to 300,000 units on Gamasutra.

A recent eMarketer report noted that “Early adopters like hardcore gamers may be willing to spend hundreds or thousands of dollars to get the most advanced tech, but the broader consumer population will likely opt for lower-cost mobile VR options, if any.”

Such lower-cost options include Google Cardboard—TechCrunch notes Google has shipped more than 5 million Cardboard units so far. The New York Times has shipped some 1.3 million Cardboard units to subscribers to try VR-based content, notes The Verge.

Industry Optimism and Investment

Despite slack sales so far, Google and Facebook are both bullish on VR, though neither necessarily sees it as a mass medium. A recent Think With Google post likened VR to a time machine. Similarly, Zuckerberg has described VR as a vehicle for sharing events like a baby’s first steps (reported in Campaign Live).

Beyond those uses, however, it’s easy to see how VR could be used for futuristic reporting on local news and sporting events. “Imagine joining your favorite NFL team during training camp, or being in the dugout during a MLB All-Stars game,” David Cole, cofounder of VR firm NextVR, told Virtual Reality Reporter. “This isn’t just about taking fans to the best seat in the arena, this is about taking them places they could never go before.”

The possibility of reporting news in VR has prompted publishers like The Wall Street Journal and AOL to build and acquire VR production studios. At this point, the industry is facing the classic chicken-and-egg problem with regard to virtual reality distribution: People aren’t buying headsets because there’s no compelling media.

If the past is any guide though, a hit game or movie could change all that. For proof, look at how Pokémon Go jump-started mobile augmented reality this summer. When the equivalent happens in VR, OmniVirt’s programmatic solution will be in a good position to reap the rewards.

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