Is the VR consumer market really “barren”?

Earlier this week a very interesting article was published on VentureBeat titled: VR startups go into cockroach mode to survive barren consumer market. The title is a bit alarming, especially when looking at it through the eyes of a player in the VR market.
We read the article carefully and found we agree with some of the concerns raised in it. Having said that, we don’t believe that going “cockroach mode” is really the way to go. In other words: yes, there may be areas where we, as the players in the VR market, should do more, but there is no cause for alarm and for talking about survival just yet.

Let’s explore the main claims in the article:

“The VR market is still very young and consumers seem to be taking a cautious approach,” (Jitesh Ubrani, senior research analyst at IDC, source).

Over the past year we have witnessed several conflicting trends in consumer behavior when it comes to VR. As with any new invention or field, there are the early adopters. These are people who will spend anything on any new gadget or content, often before it is even out in the market. While one can argue that these are not the average consumer, many of them are. Many of the people who pre-order VR cameras and headsets are “regular consumers” who are passionate about innovation and technology, driven by FOMO (Fear Of Missing Out) and the notion of pioneering a certain field.

At the same time, we do see the more cautious consumers that Urbani mentions. But these are people who have always and will always behave in the same way – they wait until something is out in the market, look for reviews and support and purchase when they feel safe.

“With plenty of headset options already in the market and even more coming soon, hardware isn’t the issue. The bigger challenge is the slow growth in content that appeals to a mass audience, combined with the confusion associated with a lack of cross-platform support.” (Jitesh Ubrani, senior research analyst at IDC, source).

At least in our experience with the Vuze camera, most of the purchase came from people who have their own idea about what they can do with it (be it for personal use or for business use) and none of them was worried about the lack of content. They buy the camera because they want to be the ones creating VR content.

However, Urbani does have a point when he talks about “content that appeals to a mass audience” and abut “cross-platform support”.

One of the biggest issues we see with the VR market these days is that content is still created for flat screens (YouTube or Facebook). To experience the full immersion of true VR you have to consume the content on a headset. Let’s set aside for now the way the content is created and the way it makes you feel physically, we’ll get to that in a moment. Consuming content on a headset, is a very personal experience. You put on a headset (so even if you are in a group, you have to use separate headsets) and you step into the VR world. This alone already challenges the “masses” notion, because just as with reality, two people standing side by side looking at the same thing will have a different, personal experience.

Now let’s get back to the physical aspect of consuming VR content on a headset. The content has to be very carefully crafted. There are rules to VR content creation that are totally different than those for non VR cinematic content. The placement of the camera has to take into account the future stitch lines, the fps, the speed of scene changing, the angle, the lighting and colors between scene and their changing – all of these and more are not trivial. The VR content creator has to consider what the audience experiences, assuming they consume the content on a headset – is the shift from light to dark to light again too fast so they have no time to adjust their eyes and get a headache? Is the sound too loud or too soft? Where in the scene is the most important thing happening? Do they need to completely look back to get it?

The slow growth in content creation that Urbani talks about is not because people are unaware of VR or don’t want it (as suggested from the tone of the article). What’s really missing in the VR industry is good education about what VR really is and how to create good VR content.

The other, technical, concern Urbani raises is valid. The cross-platform support is lacking and the abundance of headsets is actually confusing to both consumer and VR creators. When you need to be very tech savvy to change file types of VR footage to be able to consume it on different headsets, there is a problem. When the creator has to keep in mind the different requirements and prepare separate downloads for each type of headset – there is a problem.

We agree that standardization is in order for headsets and online players so that any type of VR content can be consumed by anyone on any platform – even without technical knowledge.

“I see well-funded European startups that have returned from the US to their home country go into pause-mode or preparation-mode instead of scaling up fast, waiting for the industry to mature a bit more.” (Daniel Doornink, founder and CEO at VRBASE, a VR incubator, accelerator, and studio based in Amsterdam and Berlin).

Doornink describes what happens to any startup that finds out the market is not as big or as prepared as they thought it was, not just in VR. This is exactly where Startups shouldn’t get into “pause” mode but rather into real “innovation mode”, pioneering, educating the market, creating things people can actually use now, rather than wait for them “mature”.

The bottom line, at least for us:

We don’t believe the VR market is barren. We do see the slow growth but we don’t think that waiting for it change on its own will be useful. The demand for VR technology and content will grow only if and when the consumers are more aware of its uniqueness and benefits. Someone has to be the first one to show the consumers around this exciting world of VR and this is what we set out to do.