Is Europe Behind the Curve in VR?
…and is anyone making any money?
Next weekend I will be attending IBC Europe, the Global Media, Entertainment and Technology conference in Amsterdam to learn about how marketers and brands are leveraging VR, make a lot of new friends, and hopefully learn a few more tricks. The conference is one of the biggest in Europe and will feature VR, AR and other immersive and interactive technologies.
After the disappointing TechXLR8 event in London this past June, where the talks were fairly good but there were only a handful of booths dedicated to VR or AR — and most of those cheap prosumer VR cameras — I nearly decided to pass on IBC. But with over 55,000 attendees, dozens of parallel events and 2,000 booths, I am keen to attend IBC to see how active the VR community is evolving across Europe and whether they are addressing the most important question this industry faces globally: scalability and monetisation.
We have seen some impressive forays into compelling, cinematic quality VR content but the obstacle to further growth is that many believe that prospects for monetization in the industry remain limited apart from gaming. In my view, this means people aren’t thinking creatively enough about how massive an opportunity a wealth of new content can create across social media platforms. But more about that later. First, lets look at the European VR market today.
The European VR Landscape is Growing — and Fast
According to the 1H 2017 European VR landscape report by the Venture Reality fund, the number of European companies in VR AR and MR increased by 57% over 1H2016. Perhaps not surprisingly, the report also found that the U.K. leads with the largest number of companies overall. Given its position as a leader in global media and strong talent pool of post-production experts, FX specialists and other creatives I believe the UK market is on parallel with the New York VR landscape in terms of resources, but both markets fail to put VR AR and MR to broader commercial use.
The French VR market ranks second in Europe, according to the report. This is thanks to the subsidies provided to the entertainment industry; the National Film Board has funneled over €3.5 million ($4.1 million) into VR projects (timeframe) (Variety magazine link). The department of education has also purportedly begun added VR to the curriculum in several elementary schools.
As in the U.S., gaming remains the most profitable and competitive category in Europe. Recently the transformational power of VR for industries has begun to take effect: in 1H 2017 the number of Enterprise VR technologies for industries like medicine, education, engineering, manufacturing, retail and real estate have increased by over 55%. Of these, education has increased the most during the period, with nearly twice as many companies listed in this category, as compared to 2H 2016.
Finally, Europe doesn’t really lead in the hardware segment — that area is led by the US and Asia, where the major players continue their battle for dominance of the HMD market, platforms and
capturing/post processing (3D tools, reality capture).
Thinking Outside the Headset
VR can make money when marketers begin to use it more broadly. Currently, users are focused mainly the technology alone. In other words, how are people beginning to use VR AR and MR to develop campaigns which immerse, engage and enthrall consumers?
ADVERTISING AND FUTURE FOR BRANDED CONTENT
I was thrilled to see a new entrant into the European VR Landscape, a new VR “Advertising” category — dedicated to VR AR MR marketing and advertising specialists like Palpable Media. This is interesting because too little attention has been paid to the myriad of commercial applications across technologies, platforms and social media by traditional advertising and PR firms, much less popular consumer brands.
Making Money in VR
So yes, the European VR landscape seems to be expanding at a healthy clip. We know that the UK has good infrastructure for future industry growth, and that France continues to put its money behind its conviction in tech — but what remains unclear is if, and how, the industry will begin to take off commercially.
We can’t wait to see what IBC has in store for us. At the very least, we will learn about more gadgets, applications and cool new robots (Hello Einstein!) and mingle with some of top names in media and entertainment. Let’s hope they start to think more creatively about how VR, AR and MR will transform the way they communicate with their clients more broadly, and so stimulate further demand.
– stay tuned for our report next week!