Why VR Will Probably Be A Bust for Publishers

Publishers are increasingly dipping their toes into virtual reality (VR). The New York Times, Condé Nast, and Time Inc. have all released VR apps in the past year, offering consumers access to 360-degree video, a stepping stone towards interactive VR (here’s the difference between the two). Platforms are placing big bets on VR too. Facebook purchased the VR company Oculus Rift in 2014 for $2 billion, and at the time Mark Zuckerberg predicted that VR would become a powerful way for users to play games, interact socially, and consume media. He compared VR to the internet, arguing that one day VR will become a pervasive part of consumers’ lives. Despite growing buzz around VR, Stephen Masiclat, director of the New Media Management program at The S.I. Newhouse School of Public Communications, says that its mostly hype. “In my opinion no technology has promised more, delivered less, and destroyed more wealth than virtual reality,” he says. Masiclat has spent much of his career researching emerging technology and its impact on the media business. He argues that despite the excitement around VR, there are huge barriers to widespread platform adoption and an unlikely path to profitability for publishers. Where publishers need to be paying greater attention, says Masiclat, is augmented reality (AR). Unlike VR, AR is easy to use, relatively inexpensive to develop, and most importantly, solves a problem for consumers: AR sifts through the media noise to bring consumers content that’s relevant, useful, and timely. [Editor’s Note: The following is based on an excerpt of Masiclat’s presentation at the 2016 FUSE Media summit.] VR Will Not Achieve Widespread Adoption In light of Zuckerberg’s enthusiasm for VR, Masiclat points out that pundits have been predicting a VR revolution for years. A 1993 episode of ABC’s Nightline reported that VR was on the rise and soon consumers would be able to experience VR at special theaters that were being planned across the world. “Has anyone ever been to one?” asks Masiclat. There are two reasons the technology won’t be revolutionizing the media business anytime soon, says Masiclat. First, the processing power and storage requirements needed to create a truly virtual experience, where consumers can interact with a virtual environment, are immense. Publishers would need to invest significant resources to create this type of media experience, an investment that will be out of reach for many in the industry. [caption id="attachment_21773" align="aligncenter" width="500"] For a technology to reach widespread adoption, it must meet certain criteria.[/caption] Second, Masiclat thinks not enough consumers will adopt VR technology to make publishers’ investments worthwhile. To predict whether or not a new technology is likely to achieve adoption, Masiclat uses a model developed by Forrester Research VP and principal analyst James McQuivey. According to this model, a new technology needs to hit three marks to achieve a high adoption rate. The new technology needs to be convenient to use, it needs to be emotionally engaging, and it needs to be used frequently. While VR might provide an emotionally engaging experience, it is not easy to use. VR can disorient users and even cause nausea. Because of this issue, it’s also unlikely that consumers would use VR frequently, argues Masiclat. Gamers might be one exception, he adds. McQuivey’s model also asserts that for a technology to achieve high adoption needs an ecosystem that supports its proliferation. For example, Apple made apps ubiquitous by opening up the App Store to any developer that wanted to create and sell an app. Currently, VR does not have a supportive ecosystem that will facilitate greater adoption. Given the cost of development and the barriers to adoption, Masiclat urges publishers to carefully consider the ROI before diving into VR. One bright spot Masiclat indicated for VR is that publishers are most likely to find the technology viable through working with brands to deliver highly-specialized experiences. “Really you don’t want to spend the money doing VR. You want the Aston Martins that are making the super cars to make the VR presentation. You’re just going to deliver the audience.” And in fact, most use cases we’ve seen in the industry thus far have been VR efforts underwritten by sponsors (often the VR tech producers themselves.) Masiclat presented his take on VR and AR at FUSE: The Convergence of Media & Technology. Watch Masiclat’s complete FUSE presentation on new technology and its impact on media here. AR Is a Tool for Publishers to Provide Greater Context Although augmented reality has not captured the imagination of industry as VR has, Masiclat thinks it will have a much more profound impact on how publishers create and deliver their content to consumers. The key to AR technology is its ability to provide context to the user. In a noisy world where consumers are inundated with information, AR enables people to interact with content that is most relevant to where they are or what they’re doing. AR is also easy for consumers to access (on their ever-present mobile devices), conducive to frequent use (Pokémon Go is a prime example), and relatively inexpensive for publishers to produce. “I think you can draw a straight line between the information that publishers create and making it useful in some kind of real-world context,” says Masiclat. AR apps collect valuable data about the user, taking into account their location, camera feed, user profile, and behaviors. Publishers have an opportunity to use this data to provide the most relevant content to consumers. “How many of you have been talking about ‘news you can use’ throughout your career,” asks Masliclat. “That’s the essence of augmented reality: having a useful information layer on top of everyday context.” Capturing information about the user’s behavior and environment, processing it, and providing contextual information gives an individual a situational advantage. And technology has advanced to where we are increasingly able to discern the user's context and make information valuable in a granular form, says Masiclat. The publisher’s value will be in providing this content layer, which plays to publisher’s expertise. “I think AR is the next evolutionary step for journalism and content businesses." [caption id="attachment_21771" align="aligncenter" width="500"] A diagram of the different information layers AR uses to provide the most relevant content to consumers (Click to enlarge)[/caption] To develop this informational layer, publishers will need to continue to invest in audience data management, as well as the ability to parse and understand data at a granular level and in real time. Publishers will need to be able to ingest the data provided by the AR app and mobile device and determine user intentions. Cloud data storage as well as analytics tools will be central to these efforts. "I think the move to make for the next 10-20 years is investing in the ability to make this information granular and context aware,” says Masiclat. One basic example Masiclat gives is an AR app envisioned by technology company Magic Leap. Using this app, a user can look at the sky through her camera phone lens, and a weather report will overlay on top of that camera view, sharing the temperature and weather patterns for the day. [caption id="attachment_21769" align="aligncenter" width="500"] An example from Magic Leap of how AR can add context to people's everyday lives. (Click to enlarge.)[/caption] AR doesn’t just make publishers invaluable to their readers, but Masiclat argues that it also increases their value in the eyes of platforms and device manufacturers. He predicts that AR will soon be a standard feature within a device’s operating system, and device manufacturers like Google and Apple will need publishers’ content to add greater value to their offering. “AR is another opportunity for you to renegotiate your terms for how your content is used.”

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Why VR Will Probably Be A Bust for Publishers — And Why AR Has Promise

Ellen Harvey

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Ellen Harvey