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The adjacent fields of augmented reality (AR) and virtual reality (VR) seem likely to dominate 2016 hype – with high-end VR headsets finally shipping in the first half of this year, and the curtain potentially being pulled back on what Magic Leap is actually about in AR. While VR is much more of a media-friendly platform, it is AR that will ultimately have more devices, applications, and regular users.

Media for VR will take off in 2017/2018

While many people lump AR and VR together – mainly because of the very similar hardware that advanced AR seems to be adopting – their application areas are pretty much mutually exclusive (VR’s total immersion versus AR’s “overlaying” of the real world). It’s early days yet, with few marketplaces, few devices aside from cheap viewers, and very little prior art to work from. Despite this, as VR builds into a sizable market beyond the 2016 hype/early adoption phase, digital media firms should start to:

  • Look seriously at how to acquire the skills needed to author content. VR video and interactive experiences need new framing, editing, and storytelling skills, as well as technical proficiencies. Few possess these skills yet or even recognize that the viewers’ freedom of movement (even if that only means looking around) in a scripted story creates as many headaches as it presents unique opportunities.
  • Work with hardware and marketing partners to cash in on the early hype. Few will make much money from VR in the immediate future (even the hardware is likely to be loss-making initially). Add in small user bases, no established stores or content business models and VR will take at least two to three years to become a revenue generator for those outside marketing agencies and indie game developers. So now is an ideal time to experiment and partner with those pioneers who desperately need compelling content and brands onboard – without betting the farm, obviously.
  • Keep a keen eye on AR – it will be bigger one day. 2016 will mainly be about VR, and this seems a more media-friendly platform than AR. But with many more application areas – and firms such as Microsoft (with HoloLens) and Magic Leap weighing in – AR potentially offers more opportunities for media brands and content providers, and more sophisticated interactive experiences.

I look in depth at AR and VR technology and opportunities in AR or VR – where digital media firms should focus first (report ID: ME0002-000648).


Further reading

AR or VR – where digital media firms should focus first, ME0002-000648 (February 2016)

Virtual Reality: Are We Poisoning the Well? ME0002-000598 (August 2015)

Innovation Primer: Virtual Reality, ME0002-000563 (March 2015)


Paul Jackson, Principal Analyst, Digital Media

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