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SVVR 2016 - The Business Of VR (4.28.16)
1. THE BUSINESS OF VR
APRIL 2016
Sivan Iram
sivan@river.co
@sivaniram
2. “…a new computing platform always
emerges every 10 or 15 years…”
—Mark Zuckerberg, 2/28/16
Internet
1995
Mobile
2006
VR
2016
3. APPLICATIONS
Music Social Live Sports Games Journalism Real Estate
Entertainment Training Retail Health Education Productivity
4. Virtual Reality Market Forecast
$150Bn
market
Augmented and Virtual Reality
market to hit $150 billion
revenue by 2020.
[Digi=Capital Report]
13,000%
growth
Virtual Reality Market Expected
to Grow by Over 13,000%in next 3
Years, Nearly5Times faster
than the iPhone.[Kzero.co.uk]
12.2m
headsets
12.2 million VR headset
devices to be sold in 2016.
[Piper Jaffray]
7.7bn
software
Cumulative VR software
revenue from 2014 to 2018
estimated at 7.7bn.
[Kzero Report]
References: www.digi-capital.com piper2.bluematrix.com www.kzero.co.uk
5. INVESTORS ARE MOVING IN
AR/VR Investment Activity
Q1’12-Q4-15
Stock Changes In
Last 3 Months
17%
30%
13%
16%
42%
$2B $56M $35.5M
$100M $38M $22M
BIGGEST
Deal
7. • First mobile phone invented
in 1983, it took 13 (!) years to
become commercially available.
• It took smartphones 6 years to reach
the early majority.
• If we begin the count with the
release of the Oculus DK1 (3/13), it
early majority adoption will occur in
2019.
• We believe VR would be sooner.
SMARTPHONES ADOPTION RATE
9. “The High Cost Of Pricing Low”
• Don’t only think about device cost, think Customer Lifetime Value
• Consumer $ supports content development
• Apple users spend on content 4x compared to Android users -
$200 vs. $50 (Fortune 2014)
• Premium prices on devices preserved on content and
accessories
Pricing headsets low democratizes access, but also anchors low
perceived value.
10. VR ENTERTAINMENT DISTRIBUTION
• Free for users
• Maximum exposure
• Ad-rev model
• Requires user volume
User Generated Content (UGC)Marketing
Free Content For Consumers
• Paid by consumers
• VOD/Subscription
Film, Music, Sports
Premium Content (Paid)
11. SUMMARY
• Every major tech company is investing in VR, and the market
values it. Early consumer signals are STRONG
• The fact that mass consumer adoption is “4-5” years away, doesn’t
mean we can’t build great valuable businesses TODAY
• Not all content is equal. Some content should NOT be free.
• Don’t be pressured to eliminate margins to “force” adoption
• Build KILLER apps. Think 10x experiences
12. Q&A
1. Reach out: sivan@river.co, @sivaniram
2. Download our app: RiverStudios
(Available via AppStore & Google Play)
3. Visit our website: www.river.co
4. Tweet about us: @RiverVR