Imagine going to a movie theater and experiencing the undersea world of Aquaman or visiting Superman's Fortress of Solitude. This may sound fanciful, but these types of virtual reality (VR) experiences may soon become actual reality thanks to a new partnership between Time Warner Inc.'s (NYSE:TWX) Warner Bros. Home Entertainment and IMAX Corporation (NYSE:IMAX). The companies have announced a co-financing and production agreement to create original interactive VR content for Aquaman and Justice League, as well as a third unnamed project.
Bringing superheroes to life
Recent developments, particularly in the area of special effects, have resulted in characters coming to life on the screen like never before. This has given rise to a renaissance in comic book movies that have delighted fans and created a worldwide box-office phenomenon. This partnership creates exciting new opportunities in VR.
"A key component of our vision for VR is to help usher in the first wave of high-end blockbuster-based content. Justice League and Aquaman feature some of the most beloved characters on the planet, providing iconic properties to launch this effort," said IMAX CEO Rich Gelfond. "This type of premium content will introduce audiences to virtual reality in stand-alone and multiplex-based IMAX VR centres as well as other platforms.
Warner Bros. hopes to leverage the box office success of its movies like Man of Steel, Batman v Superman: Dawn of Justice, and Suicide Squad for its upcoming creations while offering fans additional ways to interact with their heroes.
"Using content and characters from these upcoming films and incorporating creative direction from some of Hollywood's most innovative filmmakers will help us to bring a groundbreaking experience to audiences and consumers who are hungry for a cutting-edge virtual reality experience," said Warner Bros. Home Entertainment President Ron Sanders. Each super-sized experience will be available during an exclusive window at IMAX VR centers, later expanding to other VR platforms. Details regarding the exact nature of the content have not yet been revealed.
A communal experience
This announcement tops off a busy few months for IMAX in the area of VR. Though the company is best known for its premium large-format theaters, IMAX recently opened a pilot VR center in Los Angeles, and early reviews have been encouraging. It has plans to open five more locations by the end of the year.
These VR centers will employ IMAX's proprietary modular design that will allow multiple players to interact and enjoy a communal experience, envisioning it as a destination for groups of friends. If the testing at these initial locations proves successful, IMAX plans to expand the concept globally to multiplexes, shopping centers, and select tourist destinations.
Google partners on tech
IMAX recently partnered with Alphabet's (NASDAQ:GOOGL) (NASDAQ:GOOG) Google to develop a high-resolution cinema-grade VR camera using Google's Jump platform, which can stitch together 360-degree images into seamless content. The combination will address the technological challenges unique to VR.
Google recently made waves of its own in VR, receiving an Oscar nomination for its short film Pearl, a movie that was specifically created to be viewed in virtual reality. The story revolves around a father and daughter who travel the country chasing stardom as witnessed from the front seat of their car. Google Spotlight Stories has been creating animated shorts for several years to experiment with the challenges created by 360-degree storytelling.
VR for the masses
Virtual reality is in its infancy and systems can still run into the thousands of dollars. Reaching an untapped market of consumers that may be interested in the technology, but unwilling to make such a large expenditure on their own, may represent a huge payoff for the companies.
Virtual reality and its sibling augmented reality are still nascent technologies, but represent huge potential. IDC estimates that revenue from these markets could exceed $143 billion annually by 2020. These are early days for both IMAX and Warner Bros. in the area of VR, but by providing location-based options tied directly to fan favorite blockbuster movies, this could generate a new stream of revenue, and it looks like a smart way to get a foothold in an emerging field.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Alphabet (A shares) and IMAX. Danny Vena has the following options: long January 2018 $640 calls on Alphabet (C shares) and short January 2018 $650 calls on Alphabet (C shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and IMAX. The Motley Fool recommends Time Warner. The Motley Fool has a disclosure policy.