The “Infinite” Courtside Seat

Analysts Believe an “infinite seat” at Sporting Events will be a big money maker for VR

First appeared on on March 15, 2015

Back in March 2015, Facebook’s acquisition of Oculus left most of Wall St. scratching their heads. The acquisition didn’t come with a clear go-to-market strategy because the VR market, well, didn’t, and to some extent still doesn’t, exist. While the possible implications of virtual reality are promising, some analysts are still unconvinced that the acquisition would eventually provide a reliable stream of revenue. However a recent report by investment bank PiperJaffray indicates that Wall St. may be starting to change its tune.

NextVR has done much to quell analysts’ skepticism by showing how VR can tap into the lucrative professional sports industry by live streaming professional sporting events to anyone, anywhere. When Samsung debuted Milk VR (their 360 video streaming service) at CES 2015 they also announced content partnerships with the NBA, stating that they would provide ”a mix of game action and behind the scenes footage from marquee events” for the Gear VR. This content would transport Gear VR users courtside at the NBA All-Star festivities that happened on February 14th. Not coincidentally, right before All-Star Weekend NBA Commissioner Adam Silver stopped by Stanford University’s VR Lab to assess the potential of virtual reality. Since Silver took office in February, he has focused much of his attention on improving the accessibility to every demographic and VR can be a great tool for Silver to advance his mission. The NHL is also seeing what it looks like to bring people rinkside with NextVR’s technology.

NextVR has a proprietary camera system that uses modified RED Dragons

According to the PiperJaffray report, “we are likely about 8–10 years away” from live streaming “photo realistic” courtside seats. But not to fret…the report also states that “courtside broadcast after the fact and with a time lag are likely due in the near future.” Just this month NextVR presented a live stream of the Warriors vs. Bucks game to the ownership of the team. Filming VR-compatible experiences for a once-a-year event like the All-Star game is one thing, but the possibility of broadcasting the equivalent of NBA League Pass in VR has a massive potential market.

The profitable opportunity that lies in the ability to enable virtual courtside or rinkside seats is changing how investors value Facebook’s purchase of Oculus, and the promise of VR. When the PiperJaffray report was released on February 25th, Facebook’s stock price rose 2.4% opening at $80.41 on the 26th. Considering PiperJaffray has consulted with Facebook in the past, their extensive knowledge on the inner workings of Facebook’s financials makes them a source of influence on the true value of the company’s stock. While no causation can be concluded, its not a stretch to say that PiperJaffary’s confidence in VR’s ability to generate revenue influenced the increase in stock price.

The possibility of an “infinite seat” that the NBA or NHL can sell an infinite number of times seems almost too good to be true. Oh and by the way, that 2.4% increase in stock price equates to a $ 5.614 Billion increase in Facebook’s market cap. The $2 Billion Facebook paid for the price of admission into the VR market is starting to look like chump change.

10/9/16 Update:

Facebook continues to invest time and resources in their livestreaming product, Facebook Live along with their renewed focus on video in general.

Facebook’s willingness to go head-to-head with other social juggernauts like Youtube and Twitter for live stream audiences tells me that livestreaming is only getting started on Facebook’s platform. There is certainly a difference between correlation and causation, but Facebook’s acquisition of Oculus hasn’t hurt Facebook any. Since March 13th, 2015 to date, Facebook’s stock is up 64% from $78.60 to $128.99.

Since this article was published, NextVR has raised $116 million total funding to date (Series A + B rounds + additional $5.5 million to start the company), which puts it among the most well-funded VR startups. Live broadcasts by NextVR included the U.S. Open and the Masters Tournament, the Kentucky Derby, the DAYTONA 500, the International Champions Cup (ICC), and the Final Four. An agreement with Live Nation also promises to deliver “hundreds” of performances in VR Signed a five-year deal with FOX Sports, who have the rights to broadcast the NFL, Major League Baseball, and the U.S. Open Golf Championship.