Media and entertainment companies want to help shape the next entertainment platform: virtual reality.
Over the last several months, companies including Condé Nast and Vice Media have delved into the technology as a new frontier for storytelling and a potential outlet for selling ads. They have forged partnerships with companies that make virtual reality headsets and software makers that broadcast events in virtual reality, and are trying to figure out how best to create virtual reality content.
Some media and entertainment companies are also starting to invest in virtual reality companies themselves.
HBO was recently the lead investor in an addition to a funding round for Otoy, a Los Angeles-based special effects start-up. Otoy, whose LightStage facial rendering technology, used in films like “The Curious Case of Benjamin Button,” has won an Academy Award, has also gotten into virtual reality. Discovery Communications and Liberty Media participated in the funding, which raised as much as $37 million and was an extension of financing that took place in 2014, according to VC Experts, a venture capital research firm.
“Not a single media company isn’t thinking about what happens when the rectangle goes away,” said Jules Urbach, 41, the founder of Otoy, referring to a future when videos are experienced in virtual reality rather than watched on screens. “Everyone needs a strategy.”
Otoy, whose name is short for “online toy,” lets people capture virtual reality video, process it and then distribute it to viewers with its technology. Otoy also makes a virtual reality player that is free to download; the company wants to become the open standard for virtual reality distribution.
“Think of them as the cloud system similar to what Pixar would use to create incredible graphics,” said Matt Miesnieks, whose firm Super Ventures invests in virtual and augmented reality start-ups. Otoy could eventually become a platform, like an Amazon Web Services for graphics, he said.
Michael Lombardo, HBO’s president for programming, said most video created for virtual reality currently “leans toward marketing stunts or promotional opportunities,” but that could change when companies like Otoy become more integrated into the process of creating programming.
With the additional funding, Otoy’s valuation of more than $300 million did not change from 2014, according to VC Experts, which added that the start-up had raised a total of $101 million.