Future of VR : VeeR

As VR is still an emerging field, these type of startups are quite rare in the ecosystem. Definitely, it is not easy to set up a business and convince investors to be the first to pull funds in a domain that might or might not grow. However, for creators, having startups as allies to support their work is crucial. And one of the startups that support creators with distribution is VeeR VR, one of the few startups brave enough to launch in the field of VR cinematic distribution.
We discussed with the Co-Founder and CPO of VeeR VR, Jingshu Chen about the early start, how is to run a startup in an environment that is constantly evolving, about their journeys to find a business model and how they changed it several times, how they work with creators, and how content is evolving, the future of Virtual Reality, and obviously about their secret projects☺

TechvangArt (TVA): You set up the company in 2016, so you already have 3-4 years, and you moved from Silicon Valley back to China. How did all these happen? How did the idea come about?
Jingshu Chen: I did my master’s degree in Silicon Valley and worked there for about two years, at that time I was thinking about what will be my next journey in my career. And in 2016, my co-founder contacted me with the idea of a startup, focusing on VR. And that was the first time I heard about VR, but I decided to start this company together with him. We’ve known each other since undergrad and we were both in Silicon Valley, and I was doing my own startup at that time. But when he mentioned this new idea to me I thought it’s really interesting. So we moved back to Beijing and started this company in 2016.

TVA: Because you are also the Chief Product Officer in VeeR, how is it to set up a startup in such an emerging market? I am asking because we know that technology is changing and it’s evolving very fast bringing in new opportunities, and the creators are adapting, coming up with new stories and experiences. And these changes, for a while, they will go on also in the future, if the entire VR market wants to evolve. And then it’s coming in the business part, that has to adapt both to tech and creators. It is very different than to work in an established market, where you know the rules.
Jingshu Chen: As you mentioned VR is an emerging technology, and the biggest challenge in the industry is indeed the business model. Because it’s so new, and there isn’t an established industry value chain, there isn’t an established business model. And the business model is actually what we explored a lot since we founded.
Initially, we were doing only online, we wanted to be kind of ‘the YouTube for VR videos’ so creators could upload their VR content and the audience who has bought the VR headset can watch those content on our platform in their headset. But since the number of VR headset users is still very limited. And also, the quality of their content was not very high 3-4 years ago. So, it was hard to form a business model around this type of YouTube model because, in the YouTube model, you really need a huge amount of free and good quality videos.
As this model actually didn’t work, we shifted our focus to premium content. We curated cinematic VR content and introduced a paid section on our platform, and the model would be a pay-per-view for cinematic content. We explored this business model in 2018, but still, the number of VR headset users is still quite limited, so in 2019 last year we started to open our VR cinema chain in China. Besides our online platform, we focused on offline or location-based entertainment (LBE). From there on, we built a scalable and sustainable business model to distribute and monetize, cinematic VR content.

TVA: Indeed, these are all interesting changes in the business model, and especially a mix of URL and IRL experience. But why this move to IRL and how are the VR cinemas functioning?
Jingshu Chen: The biggest hurdle for people to adopt VR content is the headset. With VR cinemas, the users don’t need to buy a VR headset, they only need to enter the cinema to experience the content, and they just pay the tickets per content. Just like when you go to the cinema, you buy a ticket for a movie. And this model worked. In the next 2-3 years in China, the location-based entertainment (LBE) market is going to be much larger than the home entertainment, the online market for VR content. We have built a VR cinema chain in China, about 30 sites, most of them located in Tier 1 And Tier 2 cities – in shopping malls or tourism attractions. Because the market is pretty new and it’s not very easy to attract people to the VR cinema, so we go where people go. That’s why we choose those top shopping malls and tourist attractions because people go there and they are willing to try out new experiences in those scenarios. After a lot of exploration about the business model, this is the model we find, currently, works for cinematic VR. We sell tickets for VR content, and we share the revenue with our creators and other partners.

TVA: I really like the VR cinema chains that you have set up, but how has this entire COVID-19 situation affected you? In Europe, for example, cultural and entertainment venues, cinemas, theaters are not recovered. How is the situation in China?
Jingshu Chen: In China, the situation is different, the first half of this year, we closed our cinemas because of the COVID-19, and then we started to reopen in May. And until July, we are fully recovered. Currently in China, most of the LBEs and also shopping malls, restaurants, they’re back to business. But I heard from our partners the situation from Europe and the US.
The industry landscape is just a bit different. In Europe and US, the online market for VR, because of the launch of Quest, is probably bigger than the LBE market; but in China, it’s the opposite. In China, the LBE VR market is growing much faster than the online VR market.
TVA: And what is the relation between the online and offline platforms? Because you are a curated platform, I guess, your online library is bigger compared with the offline. So, how are you doing the selection, what stays online, what goes offline?
Jingshu Chen: We have that internal decision process. For our online platform, the content library is much open and much larger, and most of it is free content. As long as there isn’t a quality issue or some sensitivity, we allow creators to upload their content to our online platform. But there is a paid section in our online platform and the criteria for that paid section is higher than the free content. And in our offline content library, we are more selective – we will select content from the online paid section. We have about 100 pieces of content in our online paid section, but in our LBE, we only select around 50 from them. The difference is the audience, in the sense that, in the LBE market, most of the users are new to VR, or it’s, it’s their first or second time they try VR. And also, they paid tickets for this content, so they have quite high expectations. We really select the best content from our whole library.
In general, the LBE audience, they want a complete good quality storyline. If the VR content doesn’t have a clear storyline, the audience will feel that you are showing a trailer or demo. In the LBE market, you are facing a more general audience, not just the early adopters of the headset, so they are less tolerant about the quality. The storytelling is crucial, and also the image and sound quality are really important.

TVA: In terms of audience, who is the LBE audience?
Jingshu Chen: There are mainly two groups of people. One is the young generation, people from 18 to 30 – they’re very willing to try new things, new media, new forms of entertainment. And the other group are actually the kids, around 7 to 12 – they are really attracted by VR and they don’t even feel this is a new thing, it’s very natural for them. But, in the online library, we have less kid-friendly content, simply because there are not that many online kids’ users. But, in the LBE, there are a lot of kids, they really love VR and they keep coming back to try different content. As such, we have more kids friendly content in our LBE cinema.

TVA: This is interesting. I didn’t expect it to have like the kids’ market so early in the VR market.
Jingshu Chen: We didn’t expect it either! But after we opened, we noticed we have about 40% of our sales toward kids. I’m not sure if it’s something specific for the Chinese market, because in China, if you go to a shopping mall at the weekends, probably 30 to 40% are families – the parents take the kids to the shopping mall and there will select some sort of indoor playground for the kids. I think there’s definitely a market for VR in the kids market.

TVA: I looked at it a bit on your website, and you seem to have a close collaboration with the creators. Besides, sharing data with them about the audience, which is really important to know, and good feedback, you have grant opportunities for creators, and sometimes you are also acting as a producer. Can you tell us more about this, how are all these setups?
Jingshu Chen: We share the data and some of the audience feedback to the creators because we think it’s only by receiving true and real feedback from the audience, we can keep improving the content in the industry. And we have launched a VeeR Immersive Film Fund last year. The story behind is that as I mentioned we’ve found our business model, but we learned that we don’t have enough good content that meets our market criteria. That was the moment when we started two things. Firstly, it is our VR studio where we focus on producing cinematic VR content, we have producers and the production team. Secondly, we have launched an immersive film fund, so creators, directors or producers can pitch to us through the online submission system. And, we will have a review process. If we think it fits our criteria for the content, we will invest money, and we can help in the pre-production as some might still need some resources or some artists.

TVA: And till now, how did it work, what films were you supporting?
Jingshu Chen: Last year, we had the first batch and we invested in three projects, and two of them are already finished. “Close Encounter” is a documentary about wildlife in Africa, South Africa, and is already in commercial distribution – on our online platform, and LBE market, and also to some third-party distribution channels. The second one is “Ajax All Powerful” – a 6DOF animation, but we will also have a 360-video version. Currently is touring around all the international film festivals, such as Venice, Tribecca and also animation festivals. So, after the film festivals, we are going to do the commercial distribution.

TVA: How is the working process with creators? And are you supporting creators from China only, or anybody can apply?
Jingshu Chen: The model we work with creators is that they pitch to us, and we give them a lot of freedom in terms of the creation, but we will also provide our advice at production and distribution. And after we finish the project, if it’s suitable for a film festival, we will choose to go. So, premiere is preferred at the film festival first, and then standard commercial distribution through our online and LBE platform, right after the film festival.
And, yes, anybody can apply! Actually, in the first batch, two creators were from South Africa, and one from the US. We want to incubate more content from China, but there are not that many VR studios at the moment. In China, the work will be a bit different: we are the producing company, and we search for the directors and the creative team. For teams outside of China, they are more likely to have mature VR studios and great directors, so, in this case we invest in them and work with them.

TVA: Because I noticed that you are present in all major events, festivals, etc.,
How do you see the evolution of VR creation across the years, in terms of creation, production, distribution, so on….?

Jingshu Chen: The first trend is more and more mature storytelling in VR. In 2016 or 2017, a lot of content was more like a demo content and trying to create as they tried to play with this new media. But recently we’ve seen more mature content that’s, it’s not just exploring the media itself, it is also ready for the market, for commercial distribution.
The second trend, we’ve noticed is that the form of VR creation is getting more and more diverse. So it’s not just a 360 video, it’s not just documentary, live-action or animation, I see creators that try new ways of storytelling. It’s hard to categorize some of the VR content. For example, we see volumetric capturing, and the art style is different from live-action shoots. Strictly speaking, it’s not simply an animation or a live-action project as the actor has been volumetric captured, and CGI effects might be added afterwards. This new form of VR content could be catalogued to digital art, or documentary as well. For example, this year, we collaborated with Cannes XR. And the winner is called “1ST STEP”- it’s a CGI work, but it’s also supra-realistic, and it’s also a documentary, and we find it’s hard to categorize it – it’s both a documentary and a fairytale.
In VR and Film Festivals, we see the form of creation is getting more and more diverse. So last year at Venice Film Festival VR, they had 360 cinema, 6DOF installation, and installations with VR and live actors. So, I think it’s getting really diverse and the people are just exploring this new media, and that’s quite exciting.
The third trend is that we see game demos in the Film Festival in a VR showcase. I think in VR, the border between games and cinematic contents are a little bit blurry now. But in the future, we expect more interactive content to appear.

TVA: So, the last question: what is your next big secret project that nobody should know about? ☺
Jingshu Chen:: Before we have built this business model, a lot of creators from the traditional film industry, always ask us how we will distribute our content, and how we will monetize. And now, after we have this business model and it’s pretty solid, we are approaching a lot of traditional film production companies, film directors, and they are willing to try this new media.
VR is still a small industry and we cannot just stay within this industry, we need to bring more people from outside the industry, from like film industry, entertainment industry, because those are the people who are really good at telling the story, or create very interesting worlds. So, we need to bring them into the VR industry.
So, this is what we are doing right now in the Chinese market. For example, we are working with film directors that are famous in China, have made a feature film before and now we work with them to have their first VR works, and we have cinematic quality in VR. Another thing we will do is to work with a big music label in China to create a music VR content with great visual and audio experience. We are trying to expand the border of our community and we need to do more cross-border collaboration with the traditional entertainment industry in order to create more interesting content.

All visual materials were integrated with VeeR consent © VeeR VR

VeeR is a leading VR entertainment platform with the mission of bringing cinematic VR content to the mass audience. With VeeR VR Video Platform and ZeroSpace 8K VR cinema chain, VeeR has helped creators across the world to distribute and monetize their works. VeeR Studio, the production arm of VeeR, works with global talents to create cinematic VR films with engaging narrative and great entertainment value.