(Chinese Version)

Not long after IQIYI’s announcement about its VR ecosystem plan, YoukuTudou then held its VR Strategy Conference. However, besides having some famous guests and partners like IQIYI, Youku has in fact made the production, application, cash-in, and investment happen.

Report shows that YokuTudou mainly adopts co-production model and independent-production model together. At present, YoukuTudou’s VR variety shows include Mars Intelligence Agency, Go fighting, National Beauty, Kangxi etc.; VR music content covers Laure Shang, TFboys, Bigbang, and Edison Chen’s latest music videos. Furthermore, there are also VR streaming programs featuring tourism, such as Yu Minhong’s Dream Journey and Challenging The Mount Everest etc.

Rolling out multiple VR content products and setting up foundations for future copyright issue

“Youku has been keeping close tags of the VR sector since mid 2015 and has already started to invest in some areas,” Heyi Group’s chairman of board and CEO Gu Yongqiang revealed. “Besides connecting with more hardware and devices, this VR strategy also has another goal, which is establish co-production or copyright cooperation with international heavyweights and famous celebrities.”

On the conference, Youku even rolled out Mcdull, co-produced with Digital Domain, Raven, produced with Reload Studios, and Divergent 2 and Hunger Games 3 VR version with Lion Gates. Apart from that, Youku also launched the very first VR short video Black Fairy Tale in cooperation with Digital Domain and EasingMedia. Just looking at these film titles might not give you much impression on the situation, so here comes some numbers: around 20,000 VR videos have been launched on Youku VR after its app came online.

It’s reported that YouKu VR has teamed up with 80% of quality VR content teams in the country and has amassed over 50 overseas strategic partners. But as a matter of fact, although the VR content startup scene seems to be hot in China, the reality is there aren’t many production teams that have actual technology. Startups that focus on the film sector are even fewer.

What’s more, Youku has also announced its cooperation with ChinaRock Capital, which aims to build a foundation team that focuses on VR/AR technology, with an investment scale of millions.

Even though so far the competition among VR content platforms is still relatively light and most production teams have chosen to cooperate with each other through multiple channels, however, the completion will ultimately come. Strategies in the video site industry such as IP and exclusive content etc. can be also used in the VR content sector. By setting up its own foundation, Youku has no doubt solve the issue of copyright royalties in the very beginning.

So far VR content has to be free

Although copyright royalties can be regarded as the main profit model for VR content, it’s still incredibly hard to achieve it.

Gu Yongqiang believes that todays’ VR content sector is very similar to the video site industry ten years ago. “We call it the small-video age, and therefore we believe today is the small-video age for VR,” Gu stated in an interview. “It’s impossible to make blockbuster VR movies so far. But making a 10-minute or 20-minute long interactive experience is feasible.”

“When we were making the Youku membership system, we found it hard to charge users for fee. People just won’t pay for ordinary content. So then came two issues, the issues of piracy and mobile payment,” Gu added, stating that co-production or independent-production, building a mature VR video charging system, as well as importing content from overseas are the main strategies in the future. “However, the situation has changed completely as more and more people are willing to pay for content.”

When describing the prospect of the VR content market, Gu Yongqiang compared it to the Chinese film market: “Nowadays the box office of China has exceeded the American box office. When it’s about quality and unique content, Chinese users are willing to pay for them.” Apparently, Gu believes that it’s too early for companies to charge users for money on VR content.

Heyi Group’s vice president Zhang Cunna commented that in the U.S. VR has become a popular topic in Hollywood. When it comes to the content sector, almost every company will talk about it. They want to use VR technology to boost the interactive elements of their content so as to make it more appealing. “From Avatar, the beginning of the 3D age, to today’s VR, the patter has been the same. It’s all about using technologies to make the content better,” Zhang told our journalist at TMTpost.

Will the pouring capital stimulate the golden age for VR content?

The development of VR content is still in the beginning stage, there’s no doubt of that. Luckily, in accordance with TMTpost’s previous interviews and conclusion, 2017 or 2018 would welcome the turning point for VR content. The truth is the competition between distribution platforms might come sooner.

The completion between distribution platforms is sure to come, very soon. There are two main kinds of competitions here: One is the competition about the layout of video sites even before the content comes; second is the competition between giants and small and mid-sized platforms.

So what about the golden age for VR content? Capital is the catalyst that stimulates the market, which has been proven in the O2O and sharing economy sectors. But is it also true for the VR industry? A CEO of a VR content startup revealed to TMTpost: “Capital will stimulate the market to some extend, but at the end of the day the production capability of the platforms and the time also matter a great deal. When the whole industry’s production is far from mature, the power of capital is limited.”

It’s worth noting that Youku VR also plans to team up with Alibaba on e-commerce so as to help Alibaba nurture 30 million potential VR users. A few days ago, IQIYI announced that the company is hoping its initiatives will help achieve a sales volume of over ten million in the Chinese VR market.

It remains unkown whether the golden age for VR content will come soon, but the wide adoption of VR device is already happening.

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[The article is published and edited with authorization from the author @Han Pei, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.