YouTube and Facebook, by far the dominant platforms for online video, are both clearly determined to expand this dominance into the next wave of online video: 360-degree virtual reality content.
360-degree video is on the cusp of going mainstream with interesting content and affordable viewing devices becoming widely available. Advertisers, take note: this new wave will change how people consume online video content. In front of you is an opportunity to stand out and be amongst the first to use this new medium effectively to capture consumer attention.
The platforms are investing massively in this emerging ecosystem, and have recently announced compelling new initiatives. Both make it very easy to enjoy 360-degree video in a simple way with a device you already own: your smartphone. Both apps on iOS and Android play 360-degree videos directly, and let you swivel your phone around to explore different angles, or use your finger to control the perspective.
It’s to be expected that both companies will round out their offerings over the coming months. Google just started a VR division that is rumored to be working on high-end viewing devices, and Facebook is determined to make 360-degree content even more widely available, presumably with cheaper immersive viewing options.
Creating & Delivering 360-degree Video
Producing 360-degree content is still a somewhat cumbersome process. Most affordable cameras in the market are first-gen products with flaws, quirks and limitations. More mature high-end equipment costs well in the high five or even six figures.
That’s why Google and Facebook have come out with reference designs for cameras that they make freely available for manufacturers to copy and adapt. Both are also investing in software and streaming solutions to enable a simplified publishing process for 360-degree video content. The goal is to drive technology ahead more rapidly to make it easier for filmmakers to produce compelling content instead of worrying about technical details.
Marketers interested in capturing 360-degree footage are best served hiring a specialized production company that has some experience in dealing with this still nascent ecosystem. There are many technical pitfalls, and shooting 360-degree video effectively is quite different from traditional video — not just technically, but also in terms of storytelling.
Once a 360-degree clip is processed and edited, things fortunately become much easier. Both YouTube and Facebook allow for the direct upload of 360 clips, processing the videos automatically into a format that can be watched in each app. From this point on, 360 clips are treated like any other video.
Both companies continue to innovate for better content delivery. Facebook recently introduced dynamic streaming that optimizes the resolution while saving bandwidth, and YouTube just announced 360-degree live streaming and spatial sound. Another interesting development is new analytics functionality that gives publishers better insights into how viewers are experiencing their 360-degree content. Facebook is going to make heat maps available that show which direction viewers were looking in at any given point in a 360 video.
While the sector is still in its infancy, there is already plenty of interesting 360-degree VR video content available. YouTube has a dedicated channel on which viewers can find the latest 360-degree content, with many playlists of videos on topics from sports, nature, and music to comedy and dance. Similarly, Facebook offers a page that constantly announces new 360 clips.
The two video giants are strategically striking deals with content producers to make compelling 360 video available on their respective platforms. Facebook scored wins with a 360-degree trailer for the new Star Wars movie and more recently the intro sequence for Game of Thrones. Google has collaborated with MTV, Discovery and the New York Times, and it also invested in its own VR studio that makes very compelling narrative content under the Spotlight Stories label.
What about advertising?
Several large brands (such as Nestlé, Coke, and Volvo) have already started experimenting with 360-degree video, and the potential to capture consumers’ attention with this new format is huge.
Now for the key question that arises with every new content format: how it can be monetized? Pixability has tested 360-degree videos as ads on both platforms. Once the technical hurdles have been cleared, using and targeting 360-degree videos as pre-roll or native in-feed ads is relatively straightforward. And viewers clearly take notice: in our early tests we found engagement rates that were more than twice as high as that of comparable traditional video ads.
We see YouTube & Facebook, but where’s everyone else?
Other major video platforms like Twitter, Snapchat, Amazon and AOL are so far notably absent from the VR and 360-degree video market. It looks like the multifaceted, massive resources required to establish a foothold in the VR game are so far only achievable for the two industry giants, Google and Facebook.
The most serious contender in the hardware market is smartphone manufacturer HTC, which makes the high-end Vive VR system in collaboration with game publisher Valve. The Vive system is even more expensive than the Oculus Rift and currently clearly geared towards high-end gamers.
As usual, there are plenty of rumors but very little tangible information about what Apple might be up to in VR. Apple has some VR-related patents, and Apple CEO Tim Cook recently expressed interest in the sector, but so far Apple has not delivered any products or announcements.
Bottom line: Time to start experimenting
Virtual reality has experienced several false starts over the last couple of decades. Is it going to finally take off this time around? In particular, is 360-degree video the next big content format? The chances are certainly very good.
A very compelling VR experience from Oculus and Samsung is now available for a few hundred dollars, and an entry level teaser with Google Cardboard is basically free, thanks to the fact that most consumers already carry a smartphone in their pockets that is capable of playing this type of content. This broad accessibility is very different from earlier generations of VR technology. Maybe even more importantly, the two biggest video platforms in the world are putting their full distribution power and financial resources behind the trend.
On the production side, while devices and workflows still need to mature, it has become possible to produce 360-degree video at a fairly low cost. This allows for easy experimentation for brands looking to incorporate 360 video into their media strategy. Void of the production constraints of 30 second TV spots, 360-degree video opens up new avenues for deeply immersive advertising that invites the consumer in to engage with a personalized brand experience. Behind-the-scenes videos work particularly well in 360, and using celebrity spokespeople gives consumers a unique sense of access. Certain products, like cars, are very well presented in a 360-degree video, offering potential buyers a unique impression of what it feels like to sit in a new model.
Brands that act now have a unique opportunity to develop visibility and expertise in this compelling, uniquely engaging video format. Consumers have started entering the brave new world of virtual reality at scale; marketers: are you ready to meet them there?
For more great insights, sign up for our monthly newsletter here.