Having been in the Virtual Reality (VR, Virtual Tour, 360 Video) space for a number of years now, it is a question we get asked a great deal, how does a company monetize the content that is created in VR . . . how do we make this worth our hard earned dollars? It still seems a significant barrier to entry for a number of companies, and because of it, content, and the VR industry as a whole, suffer. So to answer the above question, we need to ask a few more questions first :
#1 WHAT IS YOUR TARGET AUDIENCE?
Of course most all advertisers, marketing execs and networks know their core demographics and who they want to view their programs, but is that audience in VR, do they need a virtual tour or experience? If they are, what is the best way to reach them? At what rate are they adopting VR, or what rate is the audience adopting it?
#2 DO YOU HAVE AN IMMERSIVE MEDIA ROLL OUT PLAN FOR NEW CONTENT?
Where do you intend to display the content? Is it simply being put up on Facebook and hoping that it does the job? Because that rarely is enough. Are you looking for shared VR experiences in group settings and events? Dome or Planetarium distribution? Are you looking to create a subscription based content service, or sell content direct to consumers via a platform like Oculus, HTC or others? Is it a combination?
This is perhaps the greatest answer needed to help assess not only what is right, but what budget is right as well.
#3 WHY USE VR?
Through Immersive technology, for the first time EVER, the viewer is 100% engaged, without distraction, in the story that is being laid in front of them. They can’t hold a cell phone to their face during any portion of the program, nor can they get distracted and leave a room, or go fix a snack. They are 100% at the attention of what they are experiencing. VR has the ability to transform the how audiences see the world in unexpected ways, and in ways that far transcend that of standard video. But if there isn’t a clear and decisive reason that VR is the right way to tell this story, VR simply becomes a novelty, not a tool for engagement and brand retention. The power of attention is the true value in VR, it is your brand, your story, your message from the moment they start the program, to the moment it ends.
#4 DOES THIS IMMERSIVE PIECE HELP SOLVE ANY OTHER PROBLEMS IN THE VR SPACE?
Users need a vast library of top tier content to keep themselves entertained and engaged in the space. Users exist in all corners of the globe, and reports of continued 30% year over year growth in headset sales means the market only continues to grow, and quickly. To keep this audience level engaged, the level of content available for them needs to increase almost to the same tier.
And only just now are camera developments, and headset developments allowing for content playback that matches what most brands would be looking for in terms of quality. As quality of content increases, audience retention, engagement and market growth are likely to follow.
#5 - WHAT MATTERS MOST TO YOU?
Perhaps the simplest and most important question here is—what really matters? Networks need eyeballs on programs to sell add space. Streaming services need breadth of content to maintain monthly subscriptions. Advertisers need to know they are reaching their target market.
In truth, this is still where VR is finding its footing. While companies are working to create the “Netflix of VR,” it isn’t here yet. There are a handful of apps that act similar to networks, but with a lack of content, viewer growth remains slow. Advertisers have limited places to create and distribute content as most filmed projects don’t have add space. These things will change, but not right away.
That is why this question matters most. What do you want your audience to get out of a VR experience? Knowing this helps drive the answers to all the other questions.
The Solution: Proper planning, proper budgeting, proper execution, and reasonable expectations
This all may seem to go without saying, but VR isn’t the same as Television or Cinema, not by a long shot. It is a new medium that needs to be handled as such. Understanding both what you want, but also what your viewer wants and how they will engage with it matters.
ADVERTISERS :
If you are an advertiser you may be limited on direct VR ads beyond Facebook, so your budget should reflect that, as content is often limited in quality and playback. Instead, perhaps look at telling a brand story to further engage your audience, help drive a narrative and leave the audience more informed and enlightened about what you do.
DISTRIBUTORS :
There are a lot more options, and ideally, you will want to keep all the doors open. Look at both headset as well as Dome and Planetarium distribution points.
Sales via a headset are straight to consumer and can act much like the purchase of an app. While individual sale dollars are not high, volume is typically the name of the game here, and giving audiences something they feel they got their moneys worth out of keeps them happy and looking for more content from you in the future. $10 for a 10 minute project is expensive. $8 for a 60 minute documentary starts to make much more sense. As with most things, volume wins the day, and with global headset numbers approaching 10 million, you are not without an audience hungry for content. Giving them proper value is what matters.
Then there is the shared experiences, group VR settings where all audience members present watch the same piece, at the same time. These do continue to grow in popularity and as VR begins to find its footing, location based VR will look to license content for these types of experiences. This could either be via headsets or Domes and Planetariums and the market looks to be adopting both. Sales here will depend on the subject matter, audience and intended place of presentation.
Shared VR experiences are also a unique and emerging market. NatGeo for example hosted a Dome experience in Times Square recently, Las Vegas is in the process of building a permanent dome structure for mass audiences . . . the space is growing, and will need content to keep their viewers engaged and coming back. These will often need unique and exclusive content rights as getting audiences to pay to see something in a venue if they could simply watch it at home limits the appeal. Planning for this, and pricing content accordingly is essential.
The final variable: What should VR production cost?
Take the below with a grain of salt, as each project will have its own components that play into final cost, and never be afraid to tell us a little about your project and ask what we think it may cost.
ADVERTISERS :
Know your roll out plans and prepare accordingly. If it is web based, you could be looking at anything between $2,000 to $3,000 per clip or more simply by using stock content. Actual produced projects could cost $15,000 or more per minute (for the finished piece) as the level of production needed in terms of travel, planning, gear, and post production are not small, and with short projects, this cost per minute has less space to spread out. Solution: When filming specific videos for your brand, aim to film and produce more than one variant in each location. Look for ways to maximize crew times and production time by getting more than one advertisement out of each project. In this, you could take what would have been $7,500 for a one minute piece and produce three, one minute advertisements, for $15,000.
DISTRIBUTORS :
This depends greatly on the scale of each project, the teams needed, and the post production required. We for example, have a range of cost depending on client overall needs and what we are doing both short and long term for the project. If we are able to pull content from our own internal library to create projects, final projects may end up in the $2,500 to $5,500 range or higher depending on the actual clip itself. If we are sending crews to film projects specifically or we are using top tier content, costs can range from $4,000 to $10,000 or more per minute, greatly depending on what the project looks like. The most important thing here, as always, is planning. For us, getting the story right is just as important as making sure projects fit within a budget that our clients are comfortable with and can still find ways to find good upside.
Don't let a potential cost scare you, ask questions!
We love to chat about what we do, and we love to work on new and exciting projects. We also pride ourselves in helping find creative solutions to getting projects done. Knowing what you are looking for, and how you envision the final project looking can dictate a lot of the budget, so if you are interested . . . ask us . . . and lets try to put a project together.