Global Editors Network: Can virtual reality make actual money?

“If you build it they will come.” A memorable line from 1989’s Field of Dreams but I’ve heard it repeated in boardrooms too many times.

“Why will they come?”, is often my response, “and if they do, how much will they pay?”

It’s not that I’m negative, it’s not that I don’t want new ideas to work, I just don’t like when we don’t think development through to its ultimate end. How will it pay for itself? Why will it work? Are we the first mover, if not what can we learn from others?

But often I find myself the sole dissenting voice as everyone nods enthusiastically and rolls their eyes when my hand goes up.

I sort of felt that way listening to the fascinating opening debate at the Global Editors Network GEN Summit 2017 in Vienna, titled VR is here to stay – what’s next for journalism?

An illustrious panel of experts sat on stage to tell the audience about their ongoing editorial adventures in virtual reality.

The line-up included Jonathan He, General Manager of Tencent, the Chinese online media powerhouse remaking traditional talent shows into VR content.

There was also Bin Gu, Founder and CEO of Yue Cheng Media, also from China (leading the way as ever), who has opened a VR cinema.

There was Francesca Panetta, Executive Editor VR of financially embattled but innovation-loving The Guardian and Latoya Peterson,┬áDeputy Editor, Digital Innovation for The Undefeated/ESPN who is on a laudable mission to deliver cost-effective ‘run and gun’ VR journalism.

The creative discussion was moderated by the excellent Robert Hernandez, Associate Professor at USC Annenberg, who delved into all four’s projects, all of which have much creative merit, all are groundbreaking, all are in inspiring in different ways.

 movies mlb baseball Field of Dreams evan kaufman GIF

“The VR market right now, it’s floating on artificial money.”

But, being the guy who gets people rolling their eyes, these were the responses when I popped my hand up and asked: ‘Where is the money? Is there advertising appetite?”

Jonathan He, of Tencent: “So far, no. There’s no advertisers participating.

“We need to build a ecosystem that’s good for both the VR producers and also the platform. But right now, we are in the stage of curating the VR producers. Right now the entire Tencent Video platform is — it’s big enough, so that we can subsidise the VR producers in order to make them grow.

“I think it’s prominent that we have enough subsidiaries from either the advertisers or from the paid users, from subscriptions in order to make this ecosystem grow.”

Bin Gu’s response: “I think for this moment VR need more interest, because we need more technology, we need more money, we need more investors. But I think producers’ interest and consumers’ interest is most important.┬áSo we built VR cinema for consumers seek into our cinema.”

Latoya Peterson for me crystalised the question perfectly with her response: “So the interesting thing about ESPN outside of every other media company that I’ve worked for is that ESPN asks the money question upfront.

“So when you are pitching ideas or stuff like that they’re like, okay, this is so cool. How are we going to make this a business? Like, what does this actually look like?

“And so, what’s interesting is in the ESPN VR experiments, what we’ve seen is, either, one, they’re coming under an existing sponsorship deal. Right? So college game day, which we did — was under a deal that Home Depot currently sponsors. So Home Depot was in the built VR experience that is on the Jaunt thing, and you see the Home Depot logo the same way you see on TV broadcasts. Right? Product placement is another area where people are monetising against that.

“But we’ve also seen, I think, to the questioner’s point, is that the VR market right now, it’s floating on artificial money.”

“And we know that, right. A lot of the big players are spending a lot to sponsor it to have things on their platform. So it’s Facebook’s and the Samsung’s and the Sony’s of the world, who are going out to creators outside of the games industry, which we’ll talk about in a second. But who are going to creators and saying, please make content for us, we’ll pay you, because we need consumers to adopt this more because we’re making these products.

“It’s a little bit of the tail wagging the dog. It’s not necessarily consumer demand, and that makes it more difficult in a traditional advertising strategy, where you’re going to be able to say against the metrics you have.

“There’s a lot of things that need to mature before there’s like a financial maturity in the market.”

And finally Francesca Panetta told the conference: “So we are looking at the revenue models, we’re looking for tech partnerships and commercial partnerships and philanthropic ones too and we’re kind of currently investigating all three at the moment.

“But for sure the kind of commercial opportunities seem to be smaller than the tech opportunities, as Latoya’s saying. Philanthropic organizations are interested as well. And we’re particularly interested in doing pieces which have got social causes.

“And so, you know, there’s opportunities there and sometimes it’s a merge 6×9 was a merge of all three in terms of money coming together. So we’re definitely still exploring that.”

I found all four projects totally fascinating, but was left wondering ‘does not considering the financial model at the start of the creative process not ultimately hurt the long-term viability of VR journalism?’

To come back to the title…it’s only here to stay until the money runs out.

But hey perhaps I’m wrong, to quote Bin Gu (quoting jack Ma): “Today is difficult, tomorrow is difficult, but after tomorrow?”

Watch the debate for yourself and form your own view.

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