Google is going all in on content for its Daydream VR platform

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Google is investing heavily in virtual reality (VR) programming for the release of its Daydream VR platform, which is set to launch in the coming weeks, according to Bloomberg.

Daydream has been broadly designated as the runway on which Google’s hardware and software VR plans will take off. The project is now referred to in more specific terms as Google's mobile platform for housing VR apps, videos, games and other content. 

Early this week, Google launched its latest Android operating system (OS), Nougat, which renders phones, headsets and controllers Daydream-compatible. Daydream devices will feature an Android VR Mode enabling users to explore VR versions of Google’s native apps like YouTube, Street View, the Google Play Store, Play Movies and Google Photos. Along with special VR versions of these apps, Daydream's debut will be accompanied by new Android phones and VR headsets and controllers.

Google has also been working with an array of third-party creators and developers to produce content for Daydream. The company has enlisted the help of gaming companies like Ubisoft and Electronic Arts, teamed up with film and TV producers like Netflix, HBO, Hulu, Lionsgate, and IMAX, partnered with sports league like the NBA and MLB, and recruited filmmakers and YouTube stars to create VR apps, games, and video content for Daydream. Sticking to Google's open-source spirit, not all of this content will be exclusive to Google, with Hulu set to release VR video content on its own platforms in unison with Daydream's launch.  

Daydream could be a turning point in VR, pushing adoption of VR technologies closer towards a critical mass, because:

• Google is focused on mobile-based VR. Unlike some of its competitors in VR, Google is less intent on building consoles or headsets, and more focused on establishing Daydream (its mobile phones, Android VR) as the dominant interface for VR. Google doesn’t mind if users snap on third-party visors or headsets (it even released the designs for its Daydream headset for others to emulate), just as long as they’re using the hardware with Daydream. 
• Android is the runaway global leader in mobile OS. At the end of last year, Android controlled around 79% of the global smartphone install base, according to Tomi Ahonen's 2016 Almanac. Meanwhile, mobile developers are increasingly favoring Android over iOS as their primary platform, according to a new VisionMobile report covered by BI Intelligence last week.
• A content-based strategy will drive word-of-mouth referrals. Google is encouraging creators to make VR content so as to drive excitement for Daydream. Releasing a mélange of VR content will appeal to a varied audience and a wider range of interests. To this end the company is not being profligate with its spending, allocating five to six figures for each content initiative – a paucity compared to the $21.5 billion that Google earned last quarter – enabling it to cast its content net wide and see what sticks.

Advertisers, meanwhile, should be excited about the opportunities presented by Daydream, and VR more broadly, as it:

• Opens a massive opportunity for VR ads to flourish. Studies suggest that consumers engage with VR ads at a staggeringly higher rate than ads in mobile and desktop apps. VR ads drove 12 new app installs for every 1,000 video ad views, based on research by the VR marketing platform Immersv cited in Venture Beat. This is compared with industry averages of 1% for mobile and 0.4% for desktop, as stated in Innovid’s 2016 Global Video Benchmarks.
• Creates an entirely new way to reach and engage with consumers. VR is the next step in the evolution of media screens and consumer touchpoints. It will enable new forms of creativity, immersive storytelling, and ways to connect with potential customers, via an advertising medium that consumers might actually enjoy. In a study of 1300 consumers, more than half of respondents said they were more likely to make purchases from a brand using VR, according to GreenlightVR. 

The tech industry has promoted the prospect of VR for the past few decades. But only now, with headsets backed by big names like Sony and Facebook, is VR finally becoming a concrete product with mass market potential. While VR technology is largely associated with the gaming industry, the platform offers a new set of content opportunities in entertainment, advertising, and more.

But where is it all going?

Margaret Boland, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on virtual reality content that examines how various VR headset categories will shape VR content development and looks at the trajectory for mobile gaming revenues to get a sense of how spending on VR content might develop. The report also lays out what types of content users and developers can expect on VR platforms, including gaming, video entertainment, and advertising.

Here are some key takeaways from the report:

• VR headset manufacturers are driving both the development and distribution of VR content by investing significant technical and monetary resources in developers, in an effort to build up an exclusive content library.
• High demand for VR headsets by mobile and console gamers will fuel demand for VR content. The VR content market will take an increasing portion of the mobile gaming software industry.
• Beyond gaming, VR video entertainment will remain short form until demand for VR headsets increases.
• Ads featured on VR headsets will likely have higher view-through rates than standard video ad spots.
• Other industries are also beginning to experiment with VR content. Travel companies, publishers, e-commerce merchants, and social platforms are beginning to see potential in this new category.
• VR content faces major hurdles that could keep developers from investing: The VR experience must be good enough for people to take up the devices. In addition, developers need to know that a sufficient user base exists to be worthy of the resource investment in VR content.

In full, the report:

• Provides a breakdown of each type of VR headset, what platforms they run on, and how content will differ for each.
• Includes estimates for global VR headset shipments by category.
• Includes a mobile gaming forecast to give a sense of the most important market that will drive spending on VR content in the next five years.
• Lays out what other industries are developing VR programs.
• Discusses some of the potential barriers that could dissuade developers from investing in VR content.

To get your copy of this invaluable guide to the VR universe, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the world of VR.