Virtual reality at MIPTV 2017: “It’s going to be the next mass medium!”

One of the big themes at this year’s MIPTV has been virtual reality. There’s a bustling VR demo area in the Palais, and a number of sessions discussing the technology’s creative and business potential, including what it might mean for the future of television.

MIPBlog, naturally, was along for the ride. Here’s our wrap of the key points made over the last few days, following on from our coverage of the VR sessions at MIPFormats and MIPDoc last weekend.

Wednesday afternoon saw HTC’s president of Viveport, HTC Vive Rikard Steiber give a keynote speech before sitting down with Worldscreen chief editor Anna Carugati to chat about what his company is up to.

“We will all have super powers. Because in virtual reality you can be anyone, you can go anywhere, and you can create anything,” said Steiber. He admitted that virtual reality’s chief problem in these early days is getting people to experience it first-hand, but was bullish about the emotional impact when they do.

“What is amazing with virtual reality is you can achieve something called true presence. it’s when your visual system, your auditory system and your motor system is fully immersed. Your brain thinks the virtual experience is actually the real experience,” he said. “And we’re just at the beginning of what the technology can do. It’s a new computing platform: it’s going to be the next mass medium… We’re in year one of virtual reality, which means of course it is entertainment and gaming-related. But moving forward, there will be new categories of experiences.”

Steiber talked about the coming together of the cinematographic and gaming worlds, citing examples like David Attenborough’s Great Barrier Reef on the former side, and The Blu on the latter. “What’s exciting with virtual reality is you can not just capture things around you, but you can capture yourself and become an avatar: a holographic movie,” he said, citing a new music video from Björk as an example.

Steiber claimed that the entertainment industry “is going to change radically” once VR is up and running as a mainstream technology, and encouraged TV producers to work with companies like HTC to drive that change.

“The reason I’m here is to reach out to those of you who are the real heroes: who are creating the stories and representing the content,” he said. HTC’s relationship with content firms is focused on its Viveport brand, which this week has launched a new subscription model where Vive headset owners pay $5.99 a month for access to five VR apps/experiences, with the ability to swap new ones in on a monthly basis.

“Please come to us if you have game-changing ideas for virtual reality… Hopefully like Neo you’ll take the pill and run down the rabbit-hole with us!” he said. During the interview segment, though, Steiber admitted that the VR market will also have opportunities for new creators rather than just traditional TV producers.

“Could the current storytellers do it? I don’t know. I do think there are a lot that won’t make it, so I do think there will be this new breed: new young talent that can understand both the essence of storytelling, but also how you can use this technology and medium to tell those stories in new ways.”

Steiber was also asked how VR will avoid the fate of 3D TV, which promised more immersive entertainment, but was a high-profile flop with consumers. “It’s most important that we have great content and great storytelling. I do think 3D is an unfair comparison, because this technology is orders of magnitude more immersive and a step-change,” he said. “We’re in year one, but we’re going to work hard to make sure it becomes very user-friendly and very affordable.”

Earlier, a pair of panels on Monday dug deeper into the opportunities around VR, including Vast Media MD Matthias Puschmann outlining some of the key stats around the market.

“Headset sales are a bit slower than expected, and there is still a lack of qualitative content,” he admitted, but pointed to 10m shipments of Google Cardboard headsets; 5m for Samsung’s Gear VR; and 915k units sold of Sony’s PlayStation VR headset as evidence of nascent consumer interest. HTC’s Vive is estimated to have sold 420k units, while Facebook’s Oculus Rift is pegged at around 300k.

Puschmann reminded the audience to look beyond headset ownership, pointing out that VR ‘arcades’ are opening in their thousands in China, and starting to spread elsewhere in the world. These 21st-century equivalents of the video-game arcades of the 1980s could provide many people with their first experience of VR, and perhaps convince them to buy a headset for home.

Puschmann also talked about “the battle of the platforms”, with different app stores and content ecosystems across the various devices. “Content has to be adapted for each platform, which is a huge challenge for developers,” he warned, before expressing similar caution about the challenges for content firms of making a business out of VR.

“The VR community needs to work on the separation of promotional content on one side, and what is eventually worth paying for on the other side,” he said. “The creators have to work out a healthy VR ecosystem.”

The panel also saw Alex Kunawicz, VP of strategy at Laduma, warned content firms to get their priorities straight. “Some companies, they sell themselves on the tech and not the story,” he said, while encouraging experimentation to understand what form that storytelling should take. “The media is so new that we are learning all the time… Because you’re trying things at the cutting-edge all the time, not everything is always going to work how you want it.” But that’s an important part of the learning experience.

Greg Ivanov, head of Daydream business development at Google, provided a VR platform-owner’s perspective on the wider market. “Quite clearly we have to accept that there’s a lot of fragmentation, so that’s clearly a challenge. That’s the main challenge we have. Ultimately, distribution will probably unify on some level at some point,” he said. Google’s place in that battle started with Google Cardboard, and now its Daydream platform.

“The key thing we’re trying to achieve right now is to drive that recurring usage. We want to get past the ‘Cardboard curiosity’ stage where you try on a headset… then take it off and don’t pick it up again. We want to get people to use it regularly… And we want to get partners to think, actually, about why they want to do something in VR,” said Ivanov.

He talked about how Google interacts with the world of VR content. “This year, we’ve seen a lot more content makers, media companies, are taking VR way more seriously than they’ve ever done. So for us it’s quite easy to partner with companies around VR content,” he said.

“The partners and media companies that know how to do this are pretty self-selective. Let’s be honest: VR is pretty hard, it’s pretty expensive still,” said Ivanov. “So in a sense that’s actually quite simple. There are not that many truly forward-thinking companies out there. But Daydream is open as a platform for anyone to develop on.”

What makes good VR? Ivanov: “Good VR is an experience that’s well thought out in terms of why it is actually in VR. Good VR has a proposition that is unique to VR. It sounds really obvious, but it’s key,” he said. “It has to be better in VR, or only in VR… A lot of media companies have a tendency to take what they have and put it in VR. That might be a good bridge, but it’s not the ultimate destination for VR.”

Kunawicz agreed: “It has to be that you’re watching something and you’re really grateful it’s in VR: that you wouldn’t get the same experience in 2D.”

A follow-on session explored the sub-category of social VR, which included startups AltspaceVR and vTime, which both create virtual environments for people to meet in.

“We like to think of ourselves as a place where people can hang out when they can’t physically be together,” said Jane Fang, director of business development for AltspaceVR. “We’re also really well known for our marquee events, whether it’s a concert or a comedy show… The whole point is you can do it with others.”

Julian Price, CMO at vTime, threw a new definition into the mix. “We believe the future of VR is sociable, not social,” he said. “We believe current social networks: Facebook, Twitter, are mostly asynchronous networks where you post and somebody later comes along [and reads, comments on and/or shares it]. They may be social, but they’re not sociable. Whereas we believe that virtual reality is very sociable: you meet with your friends.”

vTime’s app was released just over a year ago, and has been downloaded more than 500k times so far. “It’s about going places and doing things you can’t do in real life,” he said. “There’s no point in making it real, because that would be real reality. This is virtual reality!” Soon the company will bring streaming media – video, TV shows and movies – into vTime, to foster the conversation around that too.

The human-to-human interaction is the key to these virtual worlds. “With the power of VR hardware there are certain things you can do that make it super, super-immersive that make it feel like you’re face-to-face with someone,” said Fang. “There are simple things that go a long way, like eye contact… we can move around a space. All those things make it much more enriching than just a verbal conversation.”

“We are quite a disconnected world as a society. But we believe that because VR is this synchronous thing where people get together and talk in real-time. It isn’t like other social networks,” said Price. “The social networks promote digital narcissism, and the extreme example of that is probably the new American president! Technologies like ours don’t. They promote people sitting and talking together.”

However, he was open about the financial challenges facing startups trying to develop this area. “The biggest challenge our company – and the vast number of companies I know in virtual reality – is facing is survival until such time as any of us can actually make some money out of this!” he said.

“Any commercialisation that we do plan to do with vTime, the vast majority of it is reliant on reach and distribution, and a large user base… that’s not going to happen until 2019, 2020. We know that… so the challenge is survival until then… We’ve a long way to go with the hardware.”

Fabrice Lorenceau, head of production at LIVELIKE, talked about his company’s role as a service provider working with broadcasters and brands, suggesting that in the short term, there is money to be made from those partnerships. “We’re making decent money! But the whole industry obviously is still in the maturing phase,” he said.

“The kind of companies who will survive are companies like all of ours that have already got something out there that is proven and working; people who keep their burn rate low, stay very very lean and agile,” said Price. “Companies may have to look at taking on commercial projects that they wouldn’t normally take on, to keep the lights on… But I don’t want to paint a glum picture of this. It will get there, and it will be huge. And probably led by mobile.”

VR isn’t just for grown-ups. On Tuesday, a panel explored its potential for children’s entertainment. “How amazing is it for a child to team up with their favourite character and go on an adventure with them?” wondered moderator Dr Anke Beining-Wellhausen of UTO Film, before introducing Peter Robinson, head of research at Dubit, to outline some of his company’s recent research on VR and kids.

He claimed that 20% of American under-16s have tried VR, just ahead of the 18% who’ve given it a go in the UK, although that falls to 7% in France and 5% in Germany. Overall, though: “It’s pretty much doubled over the past 12 months,” said Robinson. “We know technology is a big part of kids’ lives: they’re looking to it for innovation.”

He too warned that VR isn’t a market paved with gold for its content companies. “So far, it’s not making tons of money. 30 apps have generated over $250k. So it’s not making anyone rich yet,” he admitted. Robinson showed some of the success stories, like Job Simulator, as  well as the “wow factor” for children of using Google Earth in VR, and underwater wildlife experience The Blu.

Robinson provided some cultural lessons from Job Simulator, which challenges players to take on a range of workplace tasks, virtually. “Can kids use VR? They can! Often they can use it better than adults. And girls can use it better than boys… Boys start smashing things up and throwing things. Girls actually start undertaking a task, and organising and sorting things.”

Marc Goodchild, head of digital content strategy and product at Turner EMEA, said that VR could be seen as a logical extension of broadcasters’ efforts in recent years to take their shows and characters to a range of devices and technologies.

“Virtual reality and augmented reality are the next tools in that armoury, but it’s very early days… it allows you for the first time to put children into their favourite programmes with their favourite characters. Or even to become their favourite characters,” said Goodchild, who went on to note that the more expensive VR headsets tend to be aimed at people older than 13, making “entry-level” headsets like Google Cardboard (which works with smartphones) potentially a better choice for children’s experiences.

That was Turner subsidiary Cartoon Network’s strategy with its I See Ooo VR game for Adventure Time. Goodchild also noted that its developers put ‘time-out breaks’ into the game, as part of its “considered” approach to getting children into virtual reality without worrying their parents about its effects on young minds.

“This is the best test for a company in its flexibility of storytelling.It is not a business, it is research. It is creating technology, it is creating storytelling for young people to be able to understand this new world of virtual reality,” suggested Dmitry Mednikov, chairman of the board at Digital Television Russia. “It is our job together to understand how to make these devices safe for children.”

Tom Burton, interactive and technology lead at BBC Studios, agreed that a careful approach is needed when developing VR content aimed at children.

“For the BBC at the moment we’ve been concentrating first of all on how to tell stories, and then looking at what is quite a fragmented landscape, and how we get this content in front of audiences,” he said. “It’s not that we aren’t thinking about kids content: there’s clearly huge potential there… I think we’re taking it carefully. Let’s be honest, we’re not going to stop kids from enjoying and wanting to experience this content, but our duty is looking into what the risks are, and making it safe.”

“Actually the biggest concern we have is around content. Especially within the VR industry we talk a lot about the psychological impact that things can have, in a very positive way… but we do have to think about the fact that this can have a reverse effect as well,” he continued, noting that there isn’t really an age-rating system for VR content yet, or a way of preventing children from accessing VR experiences that are not age-appropriate for them.

But more positively, Burton suggested that VR could be a wonderful creative tool for children, citing the all-ages app Tilt Brush as an inspiring example. He also sees a role for VR in teaching kids about subjects that are hard to explain: “The world of nuclear physics or whatever it might be… the ability to sit within an atom and understand how everything works!”

Goodchild stressed the importance of agency for children using VR. “In a kids world, actually most media is interactive. They’re used to having agency in whatever they do. It’s only the television which is the last bastion of passive viewing. So although a lot of the VR conversations you’ll hear here [at MIPTV]are either cinematographic, or it’s a gaming experience, the kids space is a lot more blurred. Kids will expect when they’re in that world to have some agency. The first thing they’ll look for is the hands… It’s going to be hard to expect children to watch something sitting back almost tied to their chair, and only able to look around.”

Wednesday saw the Majestic hotel play host to MIPTV’s inaugural Immersive Content Leadership Summit, where an invited audience heard from some experts in the VR and AR spaces give their views on the potential these technologies have for the industry.

Laduma CEO Ben Smith (above) added his introductory thoughts: “We believe that virtual reality has the power to shape the world in years to come… it can move people and give them memories they will never forget,” he said, while warning that these emotions will not be stirred simply by the technology itself.

“We’re in the post-wow era, where storytelling has to come to the fore and audiences will become more demanding… It’s our shared responsibility to ensure we’re brave and bold enough to get past the buzzwords… All of us know that this is not a passing fad: that the new media revolution has begun.”

“There’s plenty of bad VR out there, and consumers are thrown by seeing bad experiences,” added event host Brian Seth Hurst, when he took the stage, before listing some recent events – from the last few weeks alone – that show the pace at which the market is moving:

Hurst provided some stats from research firm Greenlight Insights, with a figure claiming that the VR market will grow to $59.1bn of revenues globally by 2021, including 181.1m headsets shipped. But it has started relatively slowly. By the end of 2016, 20m headsets had been shipped by the “big four” of VR: Samsung’s Gear VR, Sony’s PlayStation VR, HTC Vive and Oculus Rift, estimates Greenlight.

Revenues from VR content are expected to reach $22bn by 2021, including $9bn of consumer spending. “Games will be the largest single sub-category,” noted Hurst. “But games is just the beginning.” Travel and adventure, movies and recorded videos, live events, home design and live sports are among the use cases interesting consumers, according to the research.

The panel saw TF1‘s head of digital business and open innovation Guillaume Esmiol talk about some of the broadcaster’s early lessons from trying to charge brands to participate in its VR content. I think the prices are quite high because we wanted to cover all of the costs that we had. I think it’s a real issue: you finish with high prices without having the KPIs [key performance indicators]at the beginning! Now we have the KPIs, so it’s easier,” he said.

Hervé Fontaine, VP of virtual reality B2B and business development at HTC, talked about that company’s ambitions to grow the ecosystem of VR content providers. While it has its in-house Vive Studio division to create and co-produce for VR, Fontaine stressed that the company does not see itself rivalling the big TV firms.

“The core of the strategy is really about making the market grow as fast as possible for content developers. Rather than just to subsidise content… We’re developing as much as possible the opportunities to sell content for our partner developers than to want to produce this massively ourselves. We will produce some reference content that we need to drive the story, but really we are about supporting the ecosystem,” he said.

Richard Nockles, creative director of Sky VR Studios, made an interesting point about the question of whether VR storytelling will be about video or computer-generated worlds. “At Sky VR we still see 2017 as a time to really keep experimenting,” he said. “My personal mission this year is really to try to work with interactivity as much as possible. The game engine is 100% the future of this industry… But it is about audience: it is about trying to reach as many people as possible. And we are still at the beginning of this journey.”

“I’m so excited about what we’re gong to see over the next two to three years, and this merging that’s coming together from the broadcast and gaming worlds. I’m fascinated with how this is going to work: the controllers, interactive, branching narratives,” he later continued, while noting that for now, the most important attribute for VR content might be that it “makes people feel something” – more so than the level of its production quality.

“2017 feels to me like a crazy year for a lot of the people in our industry. There’s this smashing together of the platforms. This crazy fight almost, in its infancy. And it’s 2018 when the dust kinda settles after this crazy year, it’s going to be interesting,” added Nockles. Later, he came back to the game-engines point, suggesting that it could also help solve the industry’s bandwidth challenges: “360 video is unbelievably heavy [to stream]. I would love to watch a 90-minute feature film, and the only way you could do that now is through game engines and animation,” he said.

The conversation also focused on pricing and business models for VR. Mugavero gave Littlstar’s view. “Networks and studios want to maintain their brand in this new world,” he said, pointing to Syfy and Discovery’s premium VR channels as examples. “We work with everybody, and they all want different models. Some of them make most of their money on advertising, others make it on a la carte downloads, others are baked into subscription services,” he said. What about consumers? He suggested a combination of ad-supported content and premium subscriptions is the model most likely to prosper: “something akin to Hulu”.

“A large TV network is used to operating in a certain way: a lot of the time contracts come back and you can tell that it’s a lot of old-TV terms in there… This isn’t Netflix paying $100m for Daredevil. That’s not going to happen for a very long time. This is all short-form and very experimental.”

The summit then broke for roundtable discussions between the attendees, before their table leaders reported back on the conclusions. Among them: the fear that if people’s first experience of VR is a bad one, they won’t come back; that the technology may still be too complex or intimidating for many consumers; and that a lot of people still don’t really know what VR even is – a challenge for marketers of this technology to meet.

Also on Wednesday, we heard from Sony Interactive Entertainment, maker of the PlayStation VR headset. Simon Benson, director of its immersive technology group, talked about the kind of VR entertainment Sony is trying to bring into homes, with the help of its content partners.

He started by putting PlayStation VR into context of the new media of virtual reality. “TV content can be very immersive. The idea of having something on our screens that we watch, we can get very absorbed in that. Equally, you can get very absorbed in a book!” he said. But the latter requires the viewer or reader to use their imagination to ‘see’ what’s being described. “In virtual reality, there is no sense of screen. You put the headset on and it’s stimulating our senses in a way that it’s used to being stimulated to accept a reality,” said Benson. “We don’t have to engage our imagination.”

Benson talked content differences. “When you think about creating content for virtual reality, it’s more like theatre than movies. But it’s a very unusual theatre: for one person… And as with any theatre performance, if there are lots of actors are on-stage performing, you can’t guarantee all your audience are looking somewhere at a particular time… the whole scene has to be tangible at all times. You lose control of focusing in on a particular element. It’s more like a theatre-type production, but you have this audience of one.”

The advantage: you can directly address that single viewer, and bring the performance around them. “You can invade their personal space! You can really engage with the player now,” said Benson. “Fears and phobias can be very real. This audience of one you have, you don’t really know what their fears and phobias are… they might cower away from it or want to exit the experience altogether. You might say ‘I want a scare moment so I’ll put in a spider’. But they might not be scared of spiders at all. Or they might be terrified!”

A key point. “Rather than being an audience member in virtual reality, you can put them right in the middle of the narrative… that’s really when the power of virtual reality comes into play,” he said. Here too there are risks, though. “If you have a strong narrative that’s very important and you make this person the main character, how can you guarantee they’re going to drive the narrative in the way you want? They may be a brave person, they may be a shy person. They may be gung-ho, or not.”

Sony has learned that it can work better if the viewer is “more Robin than Batman… more Chewbacca than Han Solo” – a secondary character paired with a strong (virtual) lead that drives the action, and can even give the viewer instructions about what to do next.

Benson gave some examples of PSVR apps and games that are worth checking out: interactive-narrative game Farpoint; the London Heist and Ocean Descent experiences within PlayStation VR Worlds; logic-puzzles game Tumble VR, which he compared to a TV game-show. “We’re only at the very beginning of what we’re doing, particularly with the non-game side,” said Benson. For example: 360-video services Littlstar, Jaunt and Lens, as well as animated application Invasion!; 4K documentary content app Virry VR; space-focused app Apollo 11; movie The Martian‘s VR experience; and Sony Pictures’ own Ghostbusters VR.

And the future? Benson agreed with Sky’s Nockles: that game engines like Unreal Engine and Unity will have an important role to play, even for non-gaming VR content. “Maybe when we’re making a new piece of content… a drama as an example, you capture the performances of all your actors. Maybe that’s motion-captured, and their likenesses are recreated, and you’re putting all that into one of these game engines,” he said.

“Once it all exists digitally as a complete piece, you can choose where to put the cameras later. You can choose where you want the lighting later. You can do all that, fundamentally, in the post-production process.” And then output it for VR, for TV or even for film at whatever quality is required. Benson also pointed to shared social experiences as having huge importance in the VR world going forwards.

A session on Wednesday explored the potential for branded VR content. If VR becomes one of the most engaging ways brands can captivate people, what’s the key to making great content? Damian Collier (left), CEO of VR company Blend Media and session sponsor, moderated a panel of creative experts. The first example came from Rogier Schalken, head of films at MediaMonks, who showed off a project called ‘Enter the Sandbox’ which was created for Audi:

In this experience, users are invited to “test” an Audi vehicle inside a giant virtual sandbox experience. The team took great pains to consider physical sensations and facilitate natural movement.

“It’s not just VR; it’s also TVC, online, the whole shebang,” said Schalken. “Audi let us have creative freedom because they were quite new to the medium. They wanted to be as surprised as the audience themselves … and they loved it, being scaled down to a miniature version and driving in a sandbox was wonderful.”

Audi is currently touring the experience. Collier asked Schalken how he measures the success of this kind of project. “For me personally, as a creative, reactions are the biggest rewards“, he said.

Solomon Rogers, CEO of Rewind talked about a recent project for Paramount/DreamWorks: a promotional VR experience for the new film Ghost in the Shell, which was released for Oculus Rift, Gear VR and as a Facebook 360 video:

“We talk about sweating the assets,” he said. Once you’ve made your piece of CGI for the given project, how many more content experiences can you create with it?

“In the past three years we’ve mostly done cinematic movies for VR,” he continued. Those include documentaries, science fiction and ads. “Commercials are like a laboratory. We can do a lot of R&D, and with a brand, everything has to go fast. It’s a cool lab, so we do many brands.”

“How are you working in terms of story, people’s attention and narrative, in the interest of brands?” asked Collier.

“In the end, it is about the idea“, answered Schalken. ‘In the beginning of VR it was mostly static shots, looking around. The first time you experience VR you’re completely amazed,” he said. But things have moved on. “It needs to become more creative… we’re experimenting heavily with placing of the camera. Where can we put the camera in order to give you a different feeling or sensation within the film?”

Antoine Cayrol from Okio-Studio weighed in on potential mistakes. “Do not get rid of the director! A DP [director of photography]is not a director!” he said. “Some agencies will tell me ‘Your quote is high, how can we reduce it?’ And they’ll sometimes try to reduce it by saying, ‘You don’t need a director, you put a camera and the story will be told.’” Instead, the key is getting a “great VR director” who understands that the challenge is in directing the gaze of the viewer.

“It has been quite a tech driven and dominated medium. Often you hear, do you need the DP? Do you need the director? I think you need it more,” agreed Schalken. “Just because you hide behind the box and look silly doesn’t mean you have a purpose on the shoot.”

Asked by Collier for closing advice, Rogers offered a valuable “just because you think you should doesn’t mean you have to.” Try the hardware and understand it before making the giant leap into VR, suggested the Rewind exec, urging the audience to look to the stage: “Some of our best directors are transitioning from theatre, who understand groups of people, dynamics and choreography,” he said.

And Schalken concluded with a demographic warning. “Don’t try to be something you’re not. If your target audience is 50-70, don’t make a roller coaster in VR because half of them will puke,” he said. “Keep it genuine.”

Finally, Sunday’s MIPDoc lineup featured one more session which touched on VR: a panel about new technology’s impact on factual storytelling. Isabelle Graziadey, head of international sales and acquisitions at Terranoa in France, talked about her company’s desire to experiment with VR through a project focused on an expedition to Antarctica.

“As a distributor you’re always on the lookout for those marginal things that will become the talk of the city,” said Graziadey. “We wanted to experiment… VR was thought to be an additional piece that would bring the complementary part of the experience: being totally immersed in the best cinematographic quality, to see Antarctica as you’d never seen it before.”

Cue a VR experience enabling viewers to dive under an iceberg and get close-up with penguins. “It’s not like monetising VR is going to help you recoup the cost, but it’s very important, nice-to-have packaging… and opens the way into how you can make close encounters in 3D and 360 degrees,” she said.

On the same panel, Kim Shillinglaw, director of factual at Endemol Shine Group, expressed a mixture of caution and excitement about this technology. “VR is still very much still jury out,” said Shillinglaw. “I’m always interested and intrigued by the way technology can sometimes provide a leap forward, particularly in factual… That idea of a piece or kit or a new approach to technology really driving storytelling and opening up a new wave of television is really interesting. It’s incumbent on all of us to stay really curious about all these applications.”

Curiosity about VR was plentiful at MIPTV. The challenge now is to turn that curiosity into creative content in the coming year – and perhaps also into healthy business models too.

Angela Natividad contributed reporting to this post.