Time Warner, 8i and the VR/AR Market
I am excited to announce our investment in 8i, leading a $27 million Series B round, along with a syndicate of new investors (Baidu, Verizon, Hearst) and existing investors (RRE Ventures, BDMI, Samsung, Signia, Dolby, Horizons, Founders Fund). 8i is a startup that creates 3D holograms of people, for use in virtual reality (VR), augmented reality (AR) and smartphones. After meeting with more than 100 VR/AR startups over the past two years, 8i is our second investment in the space; our first investment was in NextVR (Series A, 2015).
Some may ask: why would Time Warner want to invest in a VR/AR startup that makes holograms? Aren’t people saying that the VR/AR market will take a long time to mature? And who would want to wear a bulky VR headset all day?
To begin, let’s discuss holograms, or more technically, “volumetric media.” It is the process of recording a subject with an array of cameras, from various angles, all pointing inward. After volumetrically capturing the subject and processing the video (depth acquisition, data compression, etc.), a hologram is created. With the right hardware, a user can then view the subject (hologram) from all angles, walk around the subject, look up at the subject from below, or look down upon the subject from above. It feels like the subject is in the same room with you. For an old movie reference, consider the Princess Leia hologram seen in Star Wars.
The importance of holograms for 8i is about bringing real people into VR and AR. Not computer graphics, not avatars, not motion-captured people, but actual humans. Would you rather watch the Super Bowl live on TV, or watch it re-enacted with motion capture graphics? Would you rather have a FaceTime conversation with your best friend, or talk to an avatar version of your friend? Sometimes, you just want to see the actual person.
And with 8i’s technology, users can not just view holograms, but they can also create new mixed-reality (MR) videos, combining the real world (themselves and their surroundings) with holograms. These holograms could (hypothetically) be created from users’ favorite NBA player, superhero or Westworld character. Entertainment companies have built great libraries of memorable characters for 2D video (film and television), and fans may enjoy interacting with them in this new volumetric media.
The next important question is: which device will consumers use to interact with these holograms? Aren’t VR and AR devices taking a lot longer to gain mainstream traction than people thought? Well, 8i is planning to launch its consumer offering called Holo later this year on mobile phones to allow users to interact with holograms without requiring a VR headset or AR glasses.
The experience of viewing holograms inside a VR headset with positional tracking (e.g. Oculus, HTC Vive) is fantastic, but unfortunately, there are just not that many of them (so far…) in the hands of consumers. Same with Microsoft’s HoloLens and other AR headsets. And currently, they are expensive, bulky and uncomfortable, and no one would want to spend all day with one on his or her face.
While these dedicated AR/VR devices will undoubtedly get cheaper/better/lighter in the future, most everyone has a smartphone today. As can be seen by the huge success of Pokémon Go and Snapchat, consumers are happy with the level of AR technically possible on current smartphones. By adding 3D depth-sensing capabilities (such as the recently launched Google Tango on the Lenovo Phab 2 Pro device), AR can become even better on phones, enabling users to place holograms on a surface in your real-world environment (e.g. on your table), and view them from different angles. And there are already rumors that certain phone manufacturers will include such depth-sensing capabilities into their upcoming phones (e.g. Apple).
Eventually, these dedicated AR/VR devices will become mainstream products, and viewing holograms on such hardware will become even more immersive and engaging. Yes, many technologies need to improve before this hardware will be available to a mass market at a low price; e.g. higher screen resolution, wider field-of-view, better positional tracking and depth mapping, larger storage, faster processors, lightweight and comfortable, reduced latency and better battery life. With companies like Google, Facebook, Apple (rumored), Microsoft, Samsung, Sony, Intel, Magic Leap, HTC and others spending billions of dollars working on these issues, there is definitely hope.
But even if all the technical challenges can be solved in the future, would people still want to spend several hours a day in VR and/or AR? Let’s recall that in the dawn of the television era, the legendary movie producer Darryl F. Zanuck said in 1946, “Television won’t be able to hold on to any market it captures after six months. People will soon get tired of staring at a plywood box every night.” Well, 70 years later, the average American adult still watches five hours of television every day, and people certainly love staring at their phones. Dedicated VR/AR devices certainly have a shot at being the next big computing platform. And if so, VR/AR has the potential to fundamentally change the way that people will engage with media & entertainment…