IMAX, best known as a pioneer of immersive, high-fidelity movies, is pushing into virtual reality with plans to open as many as 11 VR parlors around the world, Bloomberg reports.
A pilot VR center in Los Angeles has proven so popular that the company has almost doubled the number of parlors it plans to open from an initial six.
Parlors like these will play a crucial role in introducing VR content to a broad audience. They're becoming more common and they offer a relatively inexpensive and accessible way for consumers to experience the technology.
Even at the $1-a-minute cost cited by Bloomberg, IMAX's VR parlors will offer a much cheaper way to try VR than is currently available. Prices for PC- and game console-powered VR headsets generally range between $500 to $1,000 or more. And VR games and movies can also be expensive, costing approximately $50, and are in limited supply.
Such VR offerings could rejuvenate the US movie industry, which has seen revenue growth stagnate in recent years, and help companies like IMAX to claim a slice of what Goldman Sachs estimates will be an $80 billion VR market by 2015:
- * Film studios and exhibitors are partnering on these initiatives. For instance, IMAX recently cut a deal with Warner Bros. for VR content around DC Comics superhero movies like Justice League and Aquaman, which will run exclusively in the VR centers.
- * IMAX is already registering impressive revenue from its VR centers. For the first four months of 2017, IMAX clocked more than 25,000 admissions and an average revenue of $15,000 per week from its single VR Center in LA. With 100 locations, IMAX estimates it would generate about $25 million in annual revenue.
As aversion to advertising continues to grow and as ad-blocking adoption increases across the globe, publishers and brands are turning to immersive video — namely 360-degree video, augmented reality (AR), and virtual reality (VR) — to win back some of their lost market share.
Immersive video can provide the impactful, emotion-driven storytelling that's needed to capture the attention of consumers and cut through the saturated ad space.
Already, brands across numerous industries have seen significant success. For example, Hong Kong Airlines’ 360-degree ad was 35 times more effective than the same traditional 2D ad. Meanwhile, Lionsgate's Blair Witch VR campaign elicited a 57% voluntary replay rate. And consumers are confident in the future of immersive video – 63% of US consumers who’ve tried an immersive experience feel it’s the “next big thing” in video, according to a YuMe study.
Dylan Mortensen, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on immersive video that breaks down the benefits of each immersive video format and outlines the ways in which brands and publishers can implement each format into their digital strategy.
Here are some key points from the report:
- Google and Facebook continue to dominate the digital ad space. Excluding Facebook and Google, the digital industry saw a 2% ad revenue decline year-over-year in H1 2016, according to the IAB.
- Marketers are falling behind on the consumer shift to mobile. Consumers in the US spent over a third of their total media time on mobile devices in 2016, while only 17% of advertisers' digital spend went toward mobile.
- 360-degree video presents an opportunity for advertisers to reach massive audiences, while allowing viewers to engage with ads as they see fit. The format also has the potential to generate longer viewing times.
- AR blends the physical and digital worlds. The global AR market is forecast to grow at a nearly 81% compound annual growth rate (CAGR) from 2016 to 2024, according to Global Market Insights.
- VR is the most complex experience, but also the most rewarding. VR content was found to elicit higher emotional engagement and longer engagement periods than traditional 2D, according to YuMe and Nielsen. BI Intelligence predicts that global VR headset shipments will increase 359% over the next six years, from 12 million in 2017 to just over 55 million in 2022.
In full, the report:
- Highlights the rising popularity of immersive video with consumers and brands.
- Explores why immersive video advertising growth will help publishers buck the Google and Facebook digital duopoly.
- Outlines successful use cases that have propelled brands’ overall reach and retention.
- Forecasts the growth of the virtual reality market.
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