The New York Times (NYSE:NYT) recently handed out Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Cardboard VR headset to subscribers of its Sunday print edition. It also launched a companion VR app for iOS and Android, which features VR films that immerse readers in news stories. Its first 10-minute film, The Displaced, follows the lives of three children in a Syrian refugee camp. The second film features the making of Walking New York, a New York Times cover.
The New York Times' entrance into the VR market represents a fascinating way to boost mainstream awareness of VR devices and change how news stories are experienced. This move complements recent attempts by Google, Facebook (NASDAQ: FB), GoPro (NASDAQ: GPRO), and others to transform VR from a geeky niche hobby into a mainstream method of consuming digital content.
Why the time is right for VR
Virtual reality has been touted as the next big thing in tech for decades, but it was never taken seriously by major tech companies. That all started to change when Oculus created the Rift headset, a device which has already impressed hardcore gamers ahead of its commercial release next year.
After Facebook acquired Oculus for $2 billion last year, CEO Mark Zuckerberg declared that VR tech could change how people interact with each other over the Internet. Earlier this year, Facebook established a VR film studio, Oculus Story Studio, to produce original content for VR devices. In September, it introduced 360-degree videos to its News Feed to let its mobile users "look around" videos by rotating their devices.
While Facebook's Oculus focused on high-end VR headsets, Google launched a low-cost option to bring VR to the masses. Its Cardboard DIY kit simply used a user's smartphone as the guts of the headset, and used the lens and phone's 3D sensors to create a crude but effective VR experience. The Cardboard app was subsequently downloaded up to 5 million times from the Play Store, which encouraged more developers to create VR experiences. Google has since added Cardboard support for other apps, including YouTube and Google Maps' Street View. It also partnered with GoPro to create "Jump," a VR filmmaking initiative which uses a massive GoPro VR rig to create interactive videos which can be viewed on YouTube.
Why the New York Times matters
Over the past decade, the New York Times has struggled with declining print circulation and a sluggish shift toward digital initiatives. But after selling the Boston Globe at a steep loss, laying off employees, and hiring new execs to help it strengthen its digital and mobile efforts, the 164-year-old newspaper has shown signs of improvement.
Last quarter, the Times added 51,000 digital subscribers for a total of 1.04 million subscribers, which offset print declines and boosted total circulation revenues by 1% annually. CEO Mark Thompson believes that this gradual shift will enable the Times' annual digital advertising revenues to double to "around $800 million by 2020." Earlier this year, the New York Times agreed to publish "Instant Articles" on Facebook, which lets Facebook users read full stories directly within its site.
Bundling a Cardboard kit with its Sunday edition complements that initiative by letting digital subscribers experience the story in a more immersive way than reading a story or watching a video. Several studies have shown that VR films increase empathy by placing viewers into "lucid dreams." Offering this kind of immersive content to digital subscribers could boost digital revenues as mainstream acceptance of VR grows. After more advanced VR headsets hit the market next year, the quality of these VR films could improve and offer customers a new way to watch and understand the news.
The virtual road ahead
Tech M&A advisory firm Digi-Capital expects the fledgling VR market to grow from nearly nothing today to $30 billion by 2020, fueled by the growth of VR games, films, and experiences. But that won't happen unless mainstream customers understand the power of modern VR. That's why Google, Facebook, GoPro, and the New York Times are all dedicating resources to ensure that this technological shift happens.