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Digital Hollywood: the rise of virtual reality studios

Major Hollywood film studios are testing the potential of virtual reality movies in a bid to help counter the fact it’s getting harder for them to monetise their brands outside of theatres.

The technology is already here to bring interactive, virtual experiences to life but is currently expensive, lacking strong content and isn’t yet mainstream.

It won’t be this way for long, according to movie executives from 20th Century Fox and Lionsgate, who are working with developers to sustainably create virtual reality experiences that are more than just a 360-degree video. The reason for this is simple; movies are a product of another age. When people finish watching films they’re becoming less and less likely to watch them again. This is compounded by suspicions that Facebook’s acquisition of Oculus will see it start to create virtual experiences for OTT content hosted within its own ecosystem.  

Digital Hollywood

What VR offers movie studios then is a chance to ensure that viewers never see the same thing twice, whether it’s because they look in another direction and see and feel something difference or interactive with different characters. 

“What’s going to make VR successful has nothing to do with the advancement of tech but how we’re softened to a point where we’re ready for this experience,” said Ted Schilowitz, a futurist at 20th Century Fox at the Consumer Electonics Show (CES) in Las Vegas.

To test the theory, the studio unveiled 'The Martian VR Experience' at the conference to take delegates on a 20-minute interactive journey to the Red Planet where they undergo similar challenges faced by the film’s stranded character Mark Watney, played by Matt Damon.

Every major studio is testing the VR waters, with small scale projects run for popular franchises such Warner Bros ‘Batman vs Superman’, Fox’s ‘The X-Man’ and ‘How to Train Your Dragon. The explosion of hardware from the likes of Oculus, HTC and Sony alongside the emergence of Google and Facebook’s 360-degree tests has primed the market for this type of viewing, although Schilowitz believes demand will be overshadowed as premium, longer, scarcer content akin to a movie blockbuster dominates.

However, to take such a giant leap movie makers need to let go of some of the traditional story conventions that are baked in a very linear, static dynamic with the viewer. It’s easier said than done when you’ve been making movies a certain way for decades, which is why companies like Mirada are increasingly being brought in to help break down those barriers.

“The thinking of the creative will change,” assured Andy Cochrane, director of interactive and new media at Mirada, founded by filmmaker Guillermo del Toro.

“We’re not talking about telling stories anymore,” Cochrane added. “We’re creating experiences that they can enjoy. There are a lot of TV a cinematic structures that are currently failing in VR. We need to change the way everyone is thinking about this stuff because 360 video is not VR.”

The intersection between movies and games

For Lionsgate, this shift means it’s no longer just looking to create movies but also games. The studio sees part of its future based at the intersection of both mediums. A year ago the studio invested in video game developer TellTale Games in an attempt to do just and explore how it can turn brands like the Keanu Reeves sleeper hit of 2015 John Wick into games and better understand the technical challenges of creating something where even the slightest addition can trigger a ripple effect.

Further strategic tie-ups are likely, according to Peter Levin, president of Lionsgate’s interactive ventures and games division. “We have the luxury of working with some of the best developers in the world and so our aim at this point is finding an IP and coupling it to a developer of VR content and then bring that to life,” he continued.

“We’re just small of enough where the developers get to work creatively with our marketing arm where there’s this lift that the entire space gets when you’re able to couple it to these big IPs like the’ Hunger Games’ or ‘Divergent’. That hopefully will develop into a viable commercial model.”

Will VR ever go mainstream?

In spite of the excitement and potential of the technology to change the fabric of movie making, it’s still years away before the scale will be there to make it worthwhile. It’s unlikely many, beyond early adopters, will shell out $599 to purchase an Oculus Rift when it launches in March plus the PC to power the experience. In addition, the headsets are still clunky enough to ensure that people aren’t fully immersed in that way that’s needed to make someone truly terrified or excited by what they’re watching and feeling.

“We’re much closer to that than anyone realises…. and we’re at a point where we’re starting to believe we can create entertainment experiences that are no longer in this square box,” argued Schilowitz.

The studio’s recently acquired minority stake in augmented reality startup Osterhout Dseign Group offers up a clue as to how close the executive thinks his business is to being able to convince they’re walking on a wire between the Twin Towers or exploring a distant planet.

This doesn’t mean VR will be the way most people consume movies and shows. It was telling that a session on VR was attended by many people who did not own a headset themselves, which suggests that mobile might be the better vector for movie studios in the immediate future.

The mobile phone is more likely to be the vector on which you experience VR content as controversial as that may sound,” said Lucas Foster, co-founder, Headcase VR. It’s a claim backed by Nvidia’s revelation that less than one per cent of PCs expected to be used worldwide this year will be powerful enough to run VR experiences.

“There’s a lot of announcements about VR out there but it essentially doesn’t exist,” added Foster. How long is it going to take to have 100,000 in market at the price point they’re at? VCRs and DVD players didn’t hit saturation until they were $100.”

Conversely, what people have today is access to $1 piece of cardboard and have a VR headset that’s as good as the Oculus was two years ago. That builds demand and is how the movie studios hope will drive behaviour while they sharpen their knowledge of the channel.

Featured by The Drum