Attendees use the new Samsung Gear 360, a 360-degree camera, during the Samsung Galaxy Unpacked 2016 event on the eve of Mobile World Congress wireless show, in Barcelona, Spain, Sunday, Feb. 21, 2016. (AP Photo/Manu Fernadez)
Shock waves recently jolted the tech industry after reports hit earlier this month that Facebook was shutting down 200 of its 500 Oculus Rift Virtual Reality (VR) pop-up stores in certain retail locations around the country. This drastic action was rumored to be taken due, in large part, to underwhelming interest from the public. But not so fast on predicting the demise of VR adoption. This is a game that has only yet begun to be played. It includes various access options and a number of content possibilities most of which have not yet even been seen. And, one specific content segment is particularly compelling because it has the potential of truly driving the next level of adoption VR in a very cool way: music concerts. The expanding interest and production around the intersection of virtual reality and music concerts lately simply can’t be denied. The new developments are intriguing, the challenges staggering, and the potential overwhelming. But the main questions are just what type of players will actually get it right, and what are current and future key factors to consider within such a precarious arena in order to seize business success?
First, a bit on the state-of-VR-interest. Consumer intrigue about VR is actually high and seems to be particularly ripe for greater experience and exploration with music and VR. In fact, results from a VR focus group study conducted by the Consumer Technology Assocation (CTA) found that the most popular suggestions from consumers interviewed for VR content include lifestyle activities such as concerts, sports and exercise. “Concerts are a natural and viable application for VR – a technology that has the potential to change entertainment as we know it,” said Brian Markwalter, senior vice president, research and standards, Consumer Technology Association. “Just as VR is transforming the way we enjoy gaming and travel, VR has the unique ability to offer an immersive, one-of-kind experience – engaging audiences and tapping their passion like ever before."
In fact, CTA has projected that VR headsets will be among the tech sector's overwhelming leaders in year-over-year growth in 2017, projecting U.S. sales to reach 2.5 million units (a 79% increase over 2016) and $660 million in revenues (43% increase).
However if this is the case, there seems to be a bit of a slow build. And many in the industry say that lack of diverse and quality content is a factor.
The research indicates that there is still a perception that gamers are the target audience for VR, an opinion shared by 60% of CTA respondents. “People are very interested in VR, but it’s seen as sitting in the gaming niche,” explains Stevenson. “They are waiting for the industry to show cool, new VR applications from movies and music to news.” But that’s not the only factor. “CTA’s research reinforces what those who have tried VR say, you have to experience it to really understand how it can transport you to an event, such as a concert,” adds Markwalter. Thus, peer-to-peer exchange will be even more important in this arena as it pertains to driving adoption.
However, the ability to actually produce such content and get onto the radars of intended fans takes commitment and, definitely, promotion. For example, the music-streaming service Rhapsody released a virtual reality app, called Rhapsody VR, that was positioned to offer exclusive 360-degree concert videos. That was nearly a year ago, but not much has been said about this between and among the millennial influencers that can make or break such entries.
Yet Live Nation, the global entertainment and concert booking behemoth, seems very committed to creating unparalleled experiences in this space. In September 2016, Live Nation, Citi and VR production company NextVR announced a partnership in which the trio will produce a series of up to 10 live virtual reality concerts as a new part of their ongoing “Backstage with Citi” initiative. This series is intended to offer fans an immersive VR experience with some of the world’s biggest recording artists. In addition to being able to watch select concerts live in VR, fans will also be taken “backstage” with the artists as they prepare to take the stage. And just after this deal announcement, Live Nation actually streamed its first VR concert with NextVR – not under the Citi banner - in December 2016 with the group Thievery Corporation. And as if that weren’t enough, Live Nation has also created a partnership with Hulu that will offer 8-10 minute experiences similar to music documentaries. Entitled "OnStage", the content premiered in January, 2017 and featured hip hop star Lil Wayne.
Kevin Chernett, EVP of Global Distribution, Partnerships and Content at Live Nation is quick to point out the company's experience behind such ambitious work. “It’s important to understand that this is not our first foray into digital. In fact, our first experience was streaming over 600 concerts with Yahoo previously. So we’ve learned a lot. One thing that we've realized is that it’s all about live. There is this magical moment around which consumers engage heavily, and there is huge, huge sharing.” And their absolute mission is to now further such fan engagement to the maximum.
“We’re kinda obsessed with free right now, “ adds Chernett. “We want more users to come on board by being best in class. If it's a great experience, this will then inspire them even more to want to attend a live show in person. We also believe that VR can also deepen an artist’s relationship with fans and expand their audience.”
But of course this all begins with the backbone in overall VR ecosystem, that is the VR production company. One such business quietly building a particular buzz is Vantage.TV. While the company was founded in 2014 by Juan Santillan, the team has actually been producing 360 video and pictures experiences for over 10 years. In just the past two years the company has produced more than 350 live streams of several major music festivals in the U.S., including Coachella, Lollapalooza, Austin City Limits and Outside Lands. “In some cases live streams for the entire events have appeared on partner distribution sites, such as YouTube, Redbull TV and Samsung, while in other cases we have filmed performances for exclusive release on the vantage.tv app platform,” explains Harrison Weiss, Director of Marketing & Business Development at Vantage."
“What we are particularly excited about is that we launched our first transactional VR concert earlier this month,” Weiss continues. The event was Eric Church’s performance from his Stagecoach appearance. VR ticket sales have never been done before, and we’re learning a lot from the fans that have downloaded the free app and purchased the experience. We’re seeing excellent session times and video segment completions, which means fans are staying in the headsets to enjoy the full song after they push play. This is a notable achievement for VR content,” says Weiss.
When asked about current challenges, most VR production companies such as Vantage will say that the biggest challenge has been educating the market. But there are also a few other considerations on the road to big VR concert business.
"Technically speaking, particularly if it's indoors, light sensitivity is one,” explains Jessica Brillhart the principal VR filmmaker at Google. “Close proximity to anything -- fans, equipment -- can also prove fickle since that generally breaks a stitch or in our case produces ghosting in those objects. There's also a level of detail in objects (wires especially, and we've seen this in microphone poles as well or bows of violins) that's harder to stitch without resulting visual weirdness. It's not the end of the world when this happens, and generally folks don't mind, but if you're looking for everything to be perfect, then it’s an issue.”
She continues, “Also something that I've been struggling with when I go into venues is finding a place to put the rig that isn't in someone's way. If you want the best seat in the house you then end up blocking someone else's IRL experience. Or you're in the way of some camera guy who's been working at that event for thirty something years and territorial. So it's also having a sense of how these events work, who works them, and who goes to them if you really wanna get it right. But as we've seen in sports adoption of VR, I imagine all this will change as VR rigs evolve and the components are built to accommodate.”
“But I think concerts in VR are precarious for a number of other reasons, too,” adds Brillhart. “Generally, just filming a concert VR isn't always compelling right now. For one, concerts in generally can be super boring because lots of live shows are also super boring in real life.”
But re-thinking this a bit could be where the sweet spot really lies for the VR concert business.
Brillhart continues, “In a real concert, you're being shoved, and crammed, and maybe there's some really drunk guy trying to start a mosh pit. There is so very much that can happen inside the crowd. So there's a lot to what interactive considerations can do to highlight a live VR event. The point of going to a concert -- at least for me -- is being in the presence of an artist you admire. I can imagine interactivity providing a means of understanding what it means to be in the presence of an artist in this context while also having it be less about the music directly and more about the experience of this music in a unique space and at a unique time with people who you've never met.” Brillhart is quick to point out that it is the microcosms that co-exist as the event happens is where the intrigue lies. "VR is a great medium to use to embrace these sorts of things, " she says. "It's the other stuff that happens around the concert that takes it from easy to artful.”
Such additional creative approaches such as this could help the adoption explode quickly. Especially if they are met with the right business model once scale is present. “We think there are lot of options for packages,” says Weiss. “For instance, we sell a bundle where fans can buy the VR ticket and a Google Cardboard together. Those bundles make up roughly half our sales. But to be clear, in terms of revenue in the live events space, we expect VR live events to be additive to, and not cannibalizing, industry revenues. VR can’t replace the magic of attending live events, at least not yet. So it should be about striving to provide valuable experiences to users in different ways."
Chernett concurs, “One day, digital VR tickets will be significant, but it’s never going to replace live performance. We see VR gateway to concert and/or way to extend the live show. Right now we at Live Nation are working to learn consumer behaviors and just follow the lead of the fans.”