Earlier this year at NAB, IABM (the international trade association for suppliers of broadcast and media technology) asked attendees how they planned to monetize VR video offerings. Yesterday, they shared the results of their survey.
Around one third of those surveyed said they didn’t know. Another one third said they weren’t planning on monetizing VR content. Around 12 percent said they planned to monetize VR with ads, with another 16 percent responding in favor of a subscription model (8 percent) and ‘other’ methods (8 percent). Another 4 percent said they would be monetizing VR with a pay-per-view model.
“VR advertising is arguably the most attractive option as it could radically change the advertising experience compared to traditional television,” read the report. “In fact, as opposed to HD or UHD advertising inventory, which is not generally charged at a premium, VR advertising inventory could potentially be charged at a premium to advertisers due to its immersive and memorable nature.”
Another interesting component of an advertising-based model is the “immersive nature of the medium,” which requires the viewer’s undivided attention–there’s no prospect of second screen distractions when it comes to VR.
Although pay-per-view was the least common answer at 4 percent of respondents, it could also be a promising avenue.
“Broadcasters will also find that subscription-based offerings and PPV could be valid models for content monetization – the NBA Digital case is an example of a subscription-based VR offering,” the report reads, referring to NextVR’s partnership with NBA Digital to broadcast one game a week in VR, viewable only by subscription.
“Viewers may be more inclined to subscribe to a new VR video service if this includes the type of content they are interested in watching in that format – particularly live sports. This is because the VR live experience could represent an alternative, or surrogate, to watching the same match in the stadium. Advances in technology will allow real live experiences to be reproduced much more accurately in a virtual world.”
The report also talked about how outsourcing VR broadcasting relates to the monetization (or lack, thereof) of the medium.
“Early use cases of VR technology show that most broadcasters have so far relied on external suppliers such as NextVR to deliver VR experiences; this has been achieved through investments or partnership,” the report reads. “The rationale behind outsourcing VR broadcasting resides in the inexperience of broadcasters with the technology and, more importantly, in the current absence of financial gains from VR broadcasting.”
Of course, as IABM outlines, a lot of these efforts to monetize VR content are limited by the actual number of VR users. The number of people experiencing this content in a headset is vastly outnumbered by those watching 360 video versions on a smartphone or desktop via YouTube or Facebook, the revenue models of which may not be so different from fixed frame video.
But, with some more affordable headsets coming out this holiday season, alongside a few standalone VR headsets this winter and spring, the number of headsets in the market is sure to grow. And we’ll need to have strategized ways to profit from this VR content.
How are you planning to monetize your VR content? Share your thoughts in the comments.