How Far Can Old Media Take New Virtual Reality?
Can virtual reality become the Next Big Thing for a media industry that has struggled to find ways to get young people excited? The answers: yes, no and maybe — from, respectively, a New York Times ( NYT ) executive, an analyst with a private merchant bank who instead loves the outlook for another emerging technology, and … well, many others. “Maybe” is the predominant answer. Every year or two, a new savior arrives for media companies in their quest to woo millennials and others in the short-attention digital age. News organizations need to do something to get consumers excited. The growth in digital advertising simply hasn’t been nearly enough to keep pace with the steady declines in advertising for traditional media, especially print media. Enter virtual reality. It’s a form of modern technology that simulates a live experience for a user, whether it places an individual at a Paul McCartney concert or a basketball game or even on a battlefield. It’s designed to supplement the traditional reporting of who-what-when-where-why-and-how information and add to the mix a spectacular experience, going beyond the sedentary act of reading a newspaper or website or watching television. The added attraction of using special headsets makes virtual reality that much more appealing for people who love to experiment with the newest gadgets. Millennials are a key market for virtual reality, since many in this demographic are tech-savvy and more receptive to accepting new kinds of technological experiences than are their more tradition-bound parents. Still, millennials won’t automatically embrace virtual reality. “The technology is still too new for a lot of people to get excited about, and there is also a price consideration,” said John Feinberg, an undergraduate at Stony Brook University. “Maybe you can simulate going on a visit to Ikea, without leaving your home, but it’s not as easy to tell if (young) people are going to find this technology to be consumer-friendly.” Media companies say they can tell, and they are excited by the prospects for the technology. “VR is already margin-positive for us. We’re making money out of VR. We expect to make money again in 2016,” NYT CEO Mark Thompson said on Beet TV at the Consumer Electronics Show in January. Just how the NYT will use VR is hard to say, but it and other media firms see it as a way to provide a more enriching journalistic experience and add some razzle-dazzle beyond gray text and static photos. Thompson might be right, but not right away, says a tech author. Virtual Reality At The Early-Netflix Stage “Virtual Reality is probably at about the same stage as when Reed Hastings first started experimenting with streaming media at Netflix — around the year 2000,” said Chunka Mui, the author of “The New Killer Apps.” Hastings is co-founder and CEO of streaming video leader Netflix ( NFLX ). “It took Hastings another 10 years before Netflix offered a commercial-grade streaming-only option,” said Mui. “The eventual winners (in VR) will be the ones that think big and start small now, and thus become the fastest learners. The learning cycles before technology is ready, and the market is ripe to determine the winner.” Millennials aren’t the only skeptical group that virtual reality purveyors in the media industry have to win over in a big way. Another component is Wall Street, which has yet to leap aboard the VR bandwagon. “Virtual Reality will never become mainstream and won’t do much to slow down the desecration of Old Media,” said Porter Bibb, an analyst at merchant bank Mediatech Capital Partners. “It’s provided a great experience but will be relegated to the same status as 3D.” Bibb has his eye on another emerging technology he finds much more promising. “Much more likely to become the next huge consumer electronics is the voice-activated device that controls everything from TV, Internet and the entire Internet of Things,” Bibb said. Bibb says Amazon ’s ( AMZN ) Echo, which has achieved buzz in this area, will face challenges from such ambitious companies as Apple ( AAPL ), Alphabet ’s ( GOOGL ) Google, Microsoft ( MSFT ) “and dozens of U.S. and Chinese companies to come up with competing products, which have the potential of equaling or exceeding smartphones.” Tablet Was The Last Media Savior Media companies can never predict what device will turn the marketplace upside down. A few years ago, many people expected that the marketing clout of Google would steer Google Glass, which was supposed to revolutionize the wearable-object movement, to become a big success. Likewise, pundits anticipated seeing the Apple Watch take its place alongside the iPod, the iPhone and the iPad as Apple’s newest consumer sensation. And the media hoped to capitalize on the boom of both products, perhaps believing that these attractions were perfect for conveying news and information to the public. But neither of those products has set the world on fire. In fact, neither has the vaunted Apple TV, underscoring the element of unpredictability. What’s the verdict? It’s hard for anyone to tell early on how the public will differentiate ultimately between a Big Thing and a gimmick. Not so long ago, it was the tablet that was going to provide a way for news companies to maximize the Web and gain new readers and advertisers. It seemed plausible that a device which linked the best newsgathering features of the old media — newspapers, magazines and television — with the technological dazzle of the Internet technology would appeal to millennials. But it didn’t. News consumers weren’t ready to allow tablets to take over the marketplace. More recently, “mobile” became the catchword to help the industry move beyond mainframe computers and go bravely into the future. But neither innovation shook the foundation of the media ecosystem. Now, it is virtual reality’s turn to try to win over young, tech-savvy consumers.