NextVR Inc. is developing the TV Guide of virtual reality content as the sizzling nascent segment draws more viewers with the launch of several headset systems.
The Laguna Beach-based company, which recently landed a five-year deal with FOX Sports to broadcast virtual reality content, aims to debut the guide this summer, providing users with a go-to source for VR scheduling, calendars and events via an app or website portal.
The service, which will offer free and paid content, will be among the first monetization plays in the VR industry, incorporating e-commerce functions similar to the App Store, iTunes and pay-per-view cable.
“This is going to be a fundamentally different experience than a 2-D Web stream,” said Executive Vice President of Corporate Strategy David Cramer.
Cramer, who was hired about a year ago to lead business development and partnerships to scale the company, served as general counsel at Quest Software Inc. when the Aliso Viejo-based business software maker was sold in 2012 to Dell Inc. for $2.8 billion.
He was introduced to NextVR by Quest Chief Executive Vinny Smith, who invested in the company last year under his Newport Beach-based Toba Capital Management, OC’s largest venture capital firm.
Users can expect a heavy dose of sports content, musical performances and immersive experiences, like traversing the rugged landscape of Big Sur—the type of live content NextVR has specialized in since first demonstrating its technology less than two years ago.
The company was founded in 2009 and has raised $35.5 million.
Pricing and Options
Pricing hasn’t been disclosed, Cramer said, but will be similar to renting an HD movie on demand through a cable service or renting a movie through iTunes for about $5.
“That’s probably the ballpark of what we’re talking about a la carte,” he said. “We’ll do it first in areas where people are accustomed to paying to access or order certain types of events.”
Individual sporting events will cost about the same as a single game purchase through other services, plus some sort of “VR premium.” NBA.com charges $6.99 to watch a single game.
Expect NextVR to leverage its ties with FOX Sports and the network’s deep list of broadcasting rights, which include nearly every professional sport.
It recently broadcasted in virtual reality several games of the Big East men’s basketball tournament, which aired on FOX and FS1. In January it demoed a Chicago Bulls-Boston Celtics game at CES, the world’s largest consumer electronics show, held annually in Las Vegas. That followed virtual reality broadcasts of presidential debates on CNN and NASCAR, PGA and NHL live streams.
Subscriptions may be an option if enough content is available to consumers, a big concern in the segment that could derail ultimate adoption.
Industry watchers will get some clarity regarding adoption in the coming months with the launch of several VR headsets. HTC and Valve’s $800 Vive is scheduled for release next month with 50 titles, according to a recent Forbes report.
And perhaps more importantly, none are video games, which are considered low-hanging fruit in VR circles.
Tokyo-based Sony Computer Entertainment Inc. plans to release PlayStation VR in October for about $500; it will be compatible with at least 50 games. Preorders began last week, and several retailers have sold out of stock, according to initial news reports.
Oculus VR Inc., which started in Irvine and maintains a presence here after its $2 billion sale in 2014 to Menlo Park-based Facebook Inc., began shipping the Oculus Rift this week. The Oculus Ready PC and Rift Bundle costs $1,500 and will launch with 30 games.
Samsung Electronics Co. in November became the first manufacturer to release a commercial virtual reality headset, although content on the Samsung Gear VR can be displayed only through an app running on the Note 4, Galaxy S6, S6 Edge or the newly released Galaxy S7 and S7 Edge smartphones. The device, which was bundled for free with the latest Samsung smartphone models in a short-run promotion that ended last week, is featured in a running national television advertising campaign, the first of its kind in the VR segment.
Samsung will distribute more than 300,000 free units in the U.S. alone and 1 million globally, according to reports. The headset, which is powered by Oculus and utilizes NextVR’s ultra high-definition, 3-D virtual reality technology and content to create 360-degree videos, features more than 200 apps and games.
A Banner Year?
“From a user growth standpoint, 2016 is the year of VR,” Cramer said.
Taiwan-based market researcher TrendForce Corp. predicts that 14 million VR units will sell this year. Some analysts, like R.W. Baird’s Colin Sebastian, are less bullish. He forecasted in a recent note to investors that Rift sales will be 500,000 to 1 million units this year, roughly half of consensus estimates.
“If you can approach 10 million headsets in the market this year, you have a user base to generate meaningful amounts of revenue,” Cramer said. “We think the revenue side of the equation will play out.”
Smartphone kits, such as Google Cardboard and Unofficial Cardboard, which allow users to access VR content through a makeshift collapsible headset, could spur adoption much quicker than high-cost, high-tech headsets, since they cost less than $20, making global accessibility possible.
NextVR is also well positioned to take advantage of the medium, largely due to its recent partnership with Qualcomm Inc. in San Diego.
“You can have a premium experience right from the moment you go out of the store,” NextVR co-founder DJ Roller told the Business Journal on the showroom floor during CES. “It should be a high rate of adoption.”
NextVR’s new content utilizes Qualcomm’s flagship Snapdragon 820 processor, which produces 3-D imaging in 4K Ultra HD resolution at a performance rate 40% faster than current standards.
The Snapdragon chip is carried in about 85% of Android phones, and new Android smartphones, like the S7, will carry NextVR technology.
“Lots of people’s first experience will be on a mobile VR platform,” Cramer said. “Mobile will define the VR market.”
