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Virtual Reality in focus

FutureSource Consulting analyst, Michael Boreham, told attendees at VRAR World in London recently that "we have finally entered an age where VR can become a commercial reality as the hardware and, more importantly, cost had reached a tipping point".

“Many people, while aware of VR, haven’t experienced a truly great VR experience yet,” he said. However, Boreham pointed out that the number of 19 to 35-year-olds that had tried VR was double the average. “Retail channel is key here, to raise awareness,” he added, especially with the number of consumer releases in gaming. “The console space is beginning to get really interesting,” he said. FutureSource believes that, by 2020, total content revenue will be in excess of US$ 6bn worldwide. This will be split 24% to video and 76% to games. The gaming VR market, however, at US$ 4.8bn is still only 2.5% of the overall gaming market. Boreham believes that, in the shorter term, Pay-Per-View will be the preferred way to monetise VR in sports, echoing the early days of satellite TV. “In the short-term, it will be PPV around key boxing matches or other sporting events that we tap into on that basis”. He also suggested that major TV or movie franchises might also tap into VR. “This could include big studios or a tie-in to gaming, as we’ve seen with Fantastic Beasts,” he explained. “It might be bundled, so it might be a VR companion piece to our BluRay of a film.”

Above: Michael Boreham at VRAR World

However, Boreham told the audience in his session on’ Virtual Reality – Niche or Reality’ that “content is a bit further away, we are still in experimental mode”. He said that, thanks to the recent launches in gaming VR, “games are a bit closer than TV. But there is a lot of experimentation in broadcast”. Boreham explained that one of the major challenges to the true uptake of VR was monetisation. “It is not cheap to produce this content. Often content is quite short, so getting consumers to pay is difficult. From a consumer point of view, it is more accessible. The PS4 and others have helped here. There is a lot to be done to raise awareness. But is there an appetite? There is a challenge there in terms of raising appetite.” Another factor, he told the audience, was awareness. FutureSource research found that only 7% of UK consumers had tried VR, compared with 5% and 4% respectively in Germany and France. In the US, the figure stood at 8%.

The watershed for TV will be 2018, according to FutureSource, when the technology and take-up will be large enough.

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Vol. 38 No. 4 - November 2016 Issue