Virtual reality as an entertainment medium is rapidly approaching the point of viability for publishers, with strong sales figures for Playstation VR and forecasts of widespread availability of hardware abound. Despite that, publishers looking to use VR as a means of distribution for news content are still grappling with the challenges of monetisation, with neither ad- or subscription-based models providing significant revenue opportunities.

At TMB we’re firm believers in the power and future of the medium, especially now that Facebook has thrown its weight behind social VR, so we were all over the Reuters Institute for the Study of Journalism’s latest report, entitled ‘VR for News: The New Reality?’ While the entire report is worth your time, we’ve pulled out some of the lessons we think will be relevant for our audience.

So, when will we all be consuming news content in virtual reality? 

The allure of the new

Novelty is a powerful attractor, and even if there wasn’t a compelling case to be made that VR will eventually be a lucrative investment, you’d expect to see some publishers enter the game solely to be first.

The report’s author Zillah Watson, of the BBC’s R&D lab, cites Paul Cheung, then-director of interactives and digital news production at Associated Press, as saying that part of the allure of the new medium for publishers is that they get to shape the future of the medium. At a time when most publishers are finding themselves at the mercy of third-party tech platforms, that might be enough impetus for publishers to join the discussion early.

But Niko Chauls, head of emergent technology at the USA Today Network, explains that entry into that space is an attempt to gain a foothold in an area it expects a younger audience to adopt:

“The organisation recognised a strategic opportunity to position ourselves as expert news storytellers in a new medium.

“This is having an impact on that, as is the recognition that currently the people who are consuming VR content in VR and in 360 are a new and younger audience that we want to pursue.”

That, and a number of other illuminating interviews assembled by Watson, particularly from RYOT’s Jessica Lauretti, implies that for some publishers investment in VR is as much an attempt to avoid past mistakes as it is to gain expertise in a new medium. A lot of publishers using VR see themselves as early colonists of the space, waiting for the mass market to arrive later.

The issues of the new

But, given the relatively high cost of the hardware for true VR, it might be a while before significant amounts of people arrive. Around 6.3 million VR headsets were reportedly sold last year, the vast majority of which were Samsung Gear VR models, on the lower-end of the market in terms of price.

Of the high-end models, only Playstation VR has sold more than a million headsets, aided by the strong install base of the Playstation 4, and the high-end HTC VIVE and Oculus Rift are approaching another million combined.

In our latest podcast Samantha Kingston, co-founder of VR marketer/consultancy firm Virtual Umbrella, told us that the Samsung Gear VR has done a lot to introduce the general public to the medium, but more endeavours like IMAX’s foray into VR cinema will be required to even introduce a significant proportion of the public to VR experiences.

The Reuters report notes that the Digital Production Partnership expects that the next couple of years will be characterised more by the industry gearing up to distribute and monetise VR content than by huge consumer take-up:

“The areas in which immersive technology will have greatest impact will be in non-broadcast content production – particularly in gaming, training and branded content.

“Broadcasters will continue to explore 360 ̊ video in news, current affairs and sport, where it is an affordable addition to their services that doesn’t disrupt the broadcast chain.”

But while the DPP suggests that gaming, whose audience of early adopters was the initial target demographic for the high-end headsets, will drive adoption over the next few months, there are already indications that some media companies are thinking of other mass-market applications in the short-term.

At the F8 summit Facebook, for instance, made a huge play for its social VR application Spaces, undoubtedly staking an early claim in that space. And VR boosters will no doubt have been buoyed up in the face of the issue of availabilty by endeavours like the NYT’s distribution of Cardboard headsets.

Despite that Watson cites the VR Market Review for BBC report by Tim Fiennes, which suggests that by 2022 mobile headsets like the Gear VR will be accessible to <25 percent of the British public, with the higher-end tech available to <15 percent. That’s not exactly penetration of the level of smartphones, but it does suggest that VR will be fairly widespread within a few short years.

Diversification of content types

As the technology becomes more widespread, it opens the door to monetisation, particularly in the areas of training and education. The Reuters report, however, concerns itself with news content, and notes that even within that relatively limited nomenclature there is room for diversification:

“…in early 2017, we see an enormous range of VR content. In 360, that includes everything from high-end documentaries through to short features for mobile viewing, and for hard news includes foreign reports in war zones through to live 360 coverage of events such as the Democratic Debates in 2016 and the US Presidential inauguration in 2017.”

That demonstrates that the form is as versatile as, for instance, flat video content. Additionally, many publishers are also having to consider when it is appropriate to use VR or 360 content to tell or illustrate a story, with some publishers choosing to create a VR story in concert with more traditional mediums. Marcelle Hopkins, executive producer of the New York Times’ Daily 360, explained:

“There’s some things that are better explained in words, and some that are better explained in photographs, and some with graphics, and we’re searching for those stories where we can do it better in 360.”

Some entertainment companies are also getting on board, demonstrating the versatility of the medium beyond a vector for news content. Studio Breaking Fourth, for instance, launched the play CTRL last year, which is primarily experienced through a Gear VR headset.  

As a result many VR content creators are still learning the ‘grammar’ of creating content of that type, learning lessons in everything from where the camera should be placed to make the most of 360 news content to lessons in increasing the verisimilitude of VR journalism despite some technical limitations.

Underplaying the empathy

It’s extremely difficult to explain the transformative power of the medium to someone who hasn’t experienced a project like the Guardian’s solitary confinement project 6×9. But the fact is that the medium enables empathetic journalism to a degree that just hasn’t been possible before, and publishers should be shouting that fact from the rooftops.

In the Reuters report, Watson (who was involved in the production of my go-to explanation of the power of empathetic journalism ‘We Wait’ writes:

“Marc Jungnickel from Bild says two good starting points are stories that enable people to ‘Be them or be there’:‘Be them’ provides visceral experiences such flying aeroplanes and jumping off cliffs.

“‘Be there’ gives you unique access to special locations such as a red carpet, an aircraft carrier, or the closed military base of the German military.”

There are ethical issues to be addressed, for sure. One such example is 8:46, which attempts to recreate what it must have been like to be in the World Trade Centre on 9/11.

You can argue that such a piece shouldn’t be created, whether it’s against your own personal morality or because the technology is still not up to the task of accurately recreating a real life event and therefore cheapens the tragedy. But I feel that the tone of an article about 8:46 from TheNextWeb, which states…

“While I don’t expect developers to purposefully sidestep any and all forms of violence and dramatic tropes that have become commonplace in modern games, it is worth understanding that those scenes and scenarios have a different impact when they are so close to you.”

…is exactly why virtual reality is a must for publishers. That rawness is exactly what’s needed to make audiences feel more than they ever could in another medium.

Despite that, Watson takes pains to note that empathetic journalism of the dour kind is far from the only experiences enabled by VR, stating:

“Jason Farkas, VP for Premium Content Video at CNN, stresses that, although empathy is an important component of some VR, it isn’t the only one. He wonders if an over-emphasis on empathy in the early days of VR experimentation perhaps limited the range of content explored:

“‘VR for a while was becoming the medium for showing the horrors of war, and showing struggle – a very dark medium. I think that it’s incredibly powerful on that level, but I also think that VR can be delightful and fun. You go to an animal sanctuary and you feel like you’re right up close with these lions and tigers, and that shows you the joyful virtual reality experience’.”

Monetisation of the medium

Of course, with all the monetary pressures that news publishers currently operate under, there are questions around the monetisation potential of the medium.

There are already cases of 360/VR content being used to supplement and illustrate existing sponsored campaigns, like the Financial Times’ Hidden Cities exploration of Rio through 360 video. 

And, as Watson makes clear in the report, such branded campaigns are currently de rigueur for monetising VR content:

“Everyone is trying to figure out how to monetise VR through ads, but no one has the answers yet’, admits Jessica Lauretti of RYOT. But she adds: ‘I think right now everyone is doing a pretty standard branded content model.”

Watson notes the irony that, for a medium that is still considered future tech, publishers are still relying on old methods of monetisation like sponsored or branded content. However, she also explains there are early attempts to create new ad formats that work well in VR, citing the AP’s Cheung as saying:

“We did that because most of what was out there in terms of monetising VR were people who were taking video ad units and trying to make them work in VR space, and that was a poor expression of shovelware that we chose to eschew and instead focus on creating a made-for-the-medium ad unit.”

And as social VR like that expounded upon by Facebook becomes a larger part of the use case for virtual reality, it’s very possible that social VR spaces will be used as marketplaces for entertainment content or for affiliate revenue through purchasing clothes ‘tried on’ in VR. Those options are all a ways off, however, and in the meantime publishers are likely to port across other old monetisation strategies and try to make them fit in VR.

So, while widespread adoption of VR is potentially a while off to the degree than most publishers would consider that they absolutely have to be creating VR content, there are a number of things publishers looking to dip their toes early should consider:

  1. There is value in being among the more established players in the space for when a mainstream audience arrives
  2. That audience might not arrive until 2022 or later, particularly for more high-end VR rigs
  3. The versatility of the medium suggests there will be a wide range of players within the emergent space
  4. While empathetic journalism is a big attraction of the medium, publishers have the ability to do entertainment and more
  5. No truly native VR advertising model has yet arrived, so subscriptions to a wider service and branded campaigns are likely to be the big money-spinners for the medium in the short- to mid-term.