Is the VR market primed to pluck?

For all the promise of virtual reality (VR) the consumer appetite remains as somewhat of an unknown. Theoretically the technology could revolutionise the entertainment space, but we’re currently in a bit of a waiting game.

HTC is ready to gamble the consumer appetite, supporting ecosystem and product portfolio has evolved to such a position to provide the fuel for a subscription-based library of premium VR content.

“We have built a new model for VR that shines a light on the great library of VR content this industry has developed and gives users a reason to spend more time in headset than ever before,” said Rikard Steiber, President of Viveport.

“At the same time, we’re increasing developer reach and potential revenue as more developers can monetize a single Infinity user. We believe this model matches how consumers want to experience VR”

In pursuit of simplicity, Viveport is effectively a ‘Netflix for VR’. Customers can either pay $12.99 a month or $99 a year to access a VR content library with more than 600 titles already listed. As with other subscription models such as Netflix for content and Spotify for music, customers will have unlimited access to all content hosted on the platform.

However, you still have to answer the question as to whether the VR segment is ready to deliver the much-anticipated riches.

For the profits to be made, three criteria have to be satisfied. Firstly, is there an ecosystem which is creating enough volume of content, wide enough variety and immersive enough experiences. Secondly, is the hardware priced to allow the opportunity to generate mass market penetration. And finally, is there enough demand from the consumer.

With 600 titles already listed on the platform, this would suggest there is a large enough ecosystem in place to create the content. HTC is promising more titles, as well as some co-ordinated launches such as ‘Angry Birds VR: Isle of Pigs’. Secondly, the price of VR headsets has been coming down recently, and while it is still expensive, it is not prohibitively so. Consumers can spend thousands at the top end, but then again Google Daydream View can be purchased for £69. The breadth of products is now available to make this segment potentially viable.

The final criterion is the consumer appetite. This is incredibly difficult to gauge without launching a product, but as long as there are early adopters it is a good time to launch. Let’s not forget, Netflix was not an immediate success, it took time to develop the monstrous subscription base it has today, but it steadily attracted more and more thanks to it being first to market, while also offering an affordable (and very good) experience. Much of this was done through word of mouth.

Another lesson which HTC will have to learn is that enough is never enough. Netflix has maintained it position as the leader in the content world because it is constantly driving for more. Last year, the team spend almost $8 billion on content acquisition and creation, a number which will drastically increase this year. Not only is Netflix funding bigger-budget productions, but it is also expanding the local content libraries around the world. With Viveport, HTC could do the same, but it needs to ensure it is constantly expanding.

HTC has crafted itself a leadership position in the VR world, and the raw materials are currently in place to make this a profitable segment. Add improved connectivity with fibre penetration increasing and 4G constantly improving to the above three criteria, and HTC could be onto a winner.

Who knows, maybe in a few years’ time we’ll be referencing Viveport as the heavyweight of the entertainment space, not Netflix.