What Virtual Reality Needs to Go From 'Next' to Now

This article originally appeared in the June 2016 issue of AVN magazine. Click here to see a digital edition of the magazine.

For quite a long time people talked about mobile being the next big thing in the world of online marketing. Some companies bought in too early, others missed the rise of mobile completely to their detriment, but everyone can agree the mobile era is now dominating digital commerce. As mobile continues to mature, industry pioneers are hard at work trying to figure out what comes next, and virtual reality is clearly among the leading candidates. AVN asked the brands at the forefront of the VR movement to give us their views on how close the technology is to being widely adopted, and to identify some of the milestones needed to allow virtual reality to go from being “next” to become a dominant force in digital revenue right now.

Todd Spaits, CMO of YanksVR, has been an early adopter of new technologies in the adult space throughout his time at Yanks.com, and while he was admittedly too early into mobile during the pre-smartphone era, he is applying those lessons to the company’s VR offerings with great success. “To be successful, content producers and affiliates should be laying the groundwork to become flexible and highly responsive to the market as it unfolds,” Spaits explained. “I expect VR to explode by Christmas of 2016, led by gaming and a flood of cardboard-holding pre-qualified customers. If I were an affiliate I would promote both the VR and flat version of any brand that converts. Then balance accordingly.”

One of the centerpieces of the new PimpRoll performance network is its flagship virtual reality site WankzVR.com. “What we have here is a technology that can vastly improve upon our experiences with media, similar to how the internet made information so attainable,” explained Bradley Phillips, vice president of PimpRoll. “While diving into VR is certainly a long play, the lack of competition as compared to other areas of adult gives affiliates who are early entrants to the market an incredible advantage and an opportunity to achieve significant market share before the space becomes saturated. Everything we are developing right now, with respect to VR technology, is 100 percent cutting edge.”

In some ways the rise of VR may also be an opportunity for adult to take the lead in regard to how the new technology is utilized for producing and consuming fresh content. “Although in the past adult has pushed the envelope with respect to development, I believe that we have taken an approach where we allow mainstream to prove the effectiveness of hardware before we adopt it,” said Phillips. “With VR we are sourcing new equipment and utilizing it in ways that were never expected, even by the developers and manufacturers. Currently, I’m working with several hardware developers on projects that involve technologies that are no further ahead in the mainstream world than they are in adult. I think mainstream has done an incredible job this time around with respect to providing a low barrier to entry for those who want to create content that can be viewed in a virtual environment and I think that will prove to be a big part of the staying power for VR this time around. Adult content producers however, are able to create features that take full advantage of what today’s VR technology has to offer, at a much lower cost than a mainstream production. Because of that, adult content is likely to be one of the most available sources of new material for those interested in VR and will be a driving force with respect to consumers investing in the technology.”

BaDoink VR has been early into the market with its own virtual reality offerings for adults, but when asked about their moves CEO Todd Glider saw the possibility of being too early as a much better move than the reality some companies will face when they find out they are too late. “The adult VR market is very, very green, largely because the entire VR space is even greener,” said Glider. “Honestly, if you’re someone with a 99-cent pair of Google Cardboard, you are an early adopter. Early majority? That on-ramp is still miles down the road. Affiliates are definitely encouraged to begin promoting VR, but there’s a huge caveat: you’ve got to educate the consumer to some extent before pushing them to a VR porn site.”

Brian Shuster, CEO of HoloFilm Productions, LLC and HoloGirlsVR.com, agreed that it might be early for some affiliates to cash in on virtual reality sites even though others are already doing quite well. “The issue for general affiliates is that there is not a high enough ratio of website visitors who have a headset to justify running ads for VR websites—even though the conversion rates are spectacular,” said Shuster. “Of course, VR blogs or technology-focused websites are making a killing with their traffic right now. The takeaway is that VR converts very well, but it’s a very shallow market as of today.”

That gap between the tech savvy of marketers and consumers was evident during the run-up to mobile, and didn’t really get solved until Apple taught the world about the iPhone. Now, with VR a similar level of customer education will be needed before consumers catch up with producers.

AVN Hall of Fame producer/director Colin Rowntree of Wasteland.com is already experimenting with the cinematic possibilities of new VR-adapted storytelling. “I directed our first VR movie last week for our FemDomBride.com reality series and see it as an opportunity to explore 360-degree storytelling as a cinematic experience,” said Rowntree. “What appeals to me is that in this format (as opposed to 180-degree POV sex experiences that other producers are creating) is the ability to transition the audience from being a passive viewer to an active audience member who is able to look around as if they were actually on the set during shooting. It does present some real challenges, as literally everything filmed on the set is viewable, so maintaining the immersive quality of the content without having crew and gear visible is something we are overcoming with a good deal of creativity. The key is that VR gives the audience member the freedom to watch what is most compelling to them from moment to moment, and that keeps fans fully engaged in the action of a narrative drama in ways that are impossible with traditional film.”

Getting the most out of the medium requires a combination of leading gear, creative filmmaking and figuring out the answers to technical questions that haven’t been asked before on any film set. That’s part of the reason why adult is taking the lead in VR film content.

“Adult is leading in VR. There’s no denying it. Adult is The Killer App for VR, hands down,” said Todd Glider of BaDoink. “Adult is not only leading, it’s creating demand, passion, enthusiasm, interest. Gaming will one day leapfrog over us, and carry that Killer App torch, but right now, games in VR are anemic. There’s no VR game out there that’s as dense, addictive and immersive as bestsellers like ‘Grand Theft Auto’ and ‘Call of Duty.’ They’re not even in the same league. And that’s because games like GTA cost a fortune to develop. Some will argue that all VR porn is the same—it’s all POV, and because it’s all POV, that it’s destined to ultimately bore the end user once that wow factor runs threadbare. I get it. However, that’s what the consumer wants right now. That’s what they tell us on Reddit. That’s what they tell us in our Feedback Forum. And when they’re sick of POV, we’ll be ready. And we’ll know the minute they are sick of it because these are very vocal subscribers. That also underscores a salient point, relative to the reasons adult is leading. That engagement we have, that we all have, with the end-user, it’s hugely valuable and unique. We’re all operating walled gardens. Members stick around for months. So as we evolve and innovate, we’re afforded an ongoing dialog. Not only do we know what ‘BaDoinkVR Member A’ thought of ‘VR Video 32’ three months ago, we know what ‘Member A’ thought of ‘VR Video 50’ in April. Nobody outside of adult has that, and since the virtual reality space is so embryonic, it’s a boon to everyone involved.”

That early comprehensive access to consumer feedback during the initial stages of massive growth is a very valuable commodity. It is also leading to a more secretive approach by the companies investing in the VR market, to secure a competitive advantage from the technical and user metric knowledge they are acquiring. “I make it a point to not discuss the equipment we use and the technologies we leverage with respect to virtual reality,” explained Phillips, “but I can tell you and our members will agree that a big part of our advantage is that we are never satisfied with our results. It has been that way with PimpRoll for over 15 years. The day we shot our first VR scene back in December, we were already working on our second-generation rig. Before that rig was sent to our producers, even before we had finished testing it, we were working on our third-generation rig. We are not only trying to push the boundaries of what available technology can do, we are working with hardware manufacturers to help guide them toward what will be winning products in the future. I am proud of every single scene we have shot. Each and every one of them has been a learning experience, an opportunity to not only see what we are doing right, but to learn from our mistakes and to understand what we can do and what requires further research or development.”

That exchange of needed information is very much a two-way form of communication between studios and consumers, according to Glider.

“A banner that reads ‘VR Porn: The Future is Now’ or ‘VR Is Here: You’ll Never Look at Smut the Same Way Again’ will not convert like a dating site or penis pill offer. It’s just so early,” Glider said. “Everybody reading this is on the cutting edge of technology, but the consumers, you can’t even assume they know what VR stands for. You can’t assume that they are even aware that virtual reality headsets exist. And there is also a marketing challenge that is intrinsic to VR, and this applies to any company pushing any VR-related product or solution to the consumer—whether adult-oriented or otherwise: it’s impossible to understand how truly unique and different virtual reality is from 2D entertainment—or even 3D entertainment—without putting the headgear on. It’s like trying to explain how delicious a calzone is to someone who’s never tasted mozzarella cheese.”

That learning curve is already leaving some content producers out in the cold. “As far as content producers, the market is already highly saturated,” explained Shuster. “Many companies jumped into VR production, but given the limited options for content production, and the limited size of the market, only a handful of production companies are profitable in the space.” Getting wider distribution channels to open up is mostly a matter of getting more headsets on the heads of consumers, according to Shuster.

“I would estimate that the number of headsets is doubling every quarter,” Shuster said. “That means that the number of potential customers is also doubling every quarter. The market may be small now, but double it 10 times (2.5 years) and it will be more than 1,000 times larger. I expect this kind of growth to continue for many years. The second major shift will happen when more mobile and new VR users come into the market than ‘old’ VR users who currently dominate it. Once new users outnumber the older, self-selected group of users, we will begin to see an emergence of niche content in VR porn. This will lead to an explosion in possibilities for production companies to get in and to become successful.”

From speaking with the leading companies in the space, it is fair to say that equalizing the expectations of the audience with the abilities of the technology and educating consumers are among the main obstacles to virtual reality dominating the marketplace at the moment. The tech has come a long way already and the pace of innovation is accelerating as the price of entry continues to drop. But that ‘a-ha moment’ that Steve Jobs delivered for mobile hasn’t been expressed yet in the virtual reality vertical. That may seem a daunting task to some, but to others in adult it represents the chance to express it effectively before anyone else can capture the imagination of millions of new fans.

When asked what else is holding VR back at the moment, Spaits offered three simple answers from Yanks VR: “Wider penetration of headsets, a willingness within mainstream to allow channel access on some level and some truly innovative third-party solutions within the adult industry, because most third-party providers have been resting on their laurels and extracting money from the survivors of the last financial crisis and tubes. The money is here again. Bring us great products again and we will spend. That is an important part of adult leading tech innovation as well.”

What gives adult a distinct advantage is the long history of living in a rapidly changing adapt-or-die industry where we are all used to discovering solutions to problems that have not yet been answered elsewhere. “Our achievements on the content front have as much to do with determination as they do with having a kickass production team,” said Glider. “With VR, there is no instruction manual; it’s learning while doing. I could ask my content manager to create a ‘Dummies’ guide to shooting stereoscopic 3D VR, and if you were coming to it cold, you’d be hard-pressed to pull it off in a way that would satisfy the consumer. Hell, if she gave me that ‘Dummies’ guide, I’d be in the same boat. It takes a lot of time, a lot of hands-on experimentation to make it work. From a tech perspective, I’m certainly proud of our native app players in the App Store and Google Play, as well as our Oculus Player; likewise, our mobile web player is exciting to the utmost and at each of those steps along the way, BaDoink is blazing a path where others might follow.”

“The importance of brand” needs to be considered strongly, according to Spaits. “The last washout of the industry significantly reduced the numbers of true brands and content producers in the market,” Spaits said. “The remaining brands, big or small, are in the driver’s seat with VR. They have the customer lists. They have the brand recognition and they have successful models built on their product. Most of these can be successfully translated to a deeper content experience for their customers, which has me believing that content will be king again soon.”

Protecting these early-entry brands and their positioning is receiving as much effort from their management teams as every other part of VR proliferation. “We’ve got numerous tech and content-oriented initiatives lined up, but the overwhelming majority are things I wouldn’t want to talk about without having all of your readers sign an NDA,” said Glider. “We’re going to support Kiiroo’s Onyx, so our members are afforded another piece of the telepresence puzzle. Video and audio are just two senses, after all. If one’s aim is to offer the end-user a truly immersive experience, you’ve got to hit all five. As well, we’re creating a Sex Therapy experience—and bringing on board a proper sex therapist for it. The goal: Use VR to help people become better, more attentive lovers.”

“I’m not going to give away the farm here,” Phillips pointed out. “I see no point in explaining to our competitors what our direction is for the future. I can however guarantee that our next camera rig will be almost entirely comprised of equipment none of our competitors have even heard of and the potential of the rig will go beyond that of any VR content produced by anyone, in any market.”

Shuster is proud of his own portfolio of VR patents that continue to accumulate along the way. “We have done a massive amount of R&D in this space, and we’ve produced some of the biggest breakthroughs in VR history. To begin, I’ll say that there is no way to cover everything, so it’s easiest to point to the huge portfolio of patents that I and my various teams have been awarded (and an even larger list that are pending). The implementation of these breakthroughs that we’ve developed over the past 13 years in the VR space will be nothing short of revolutionary. A few specifics from that list include new camera rigs, post production software and processes that allow us to completely eliminate VR sickness (we call this NoSick™ technology).  We’ve also created a process that allows us to output three complete scenes each week already, with a target of 12 scenes per week by the end of the year. This is allowing us to produce for other studios, which we are doing.”

Those kinds of adult industry-driven innovations are necessary and may yield major rewards because custom solutions from adult studios are already starting to outpace many of the mainstream big-box offerings.

“The store-bought camera options are exceedingly limited,” said Glider. “Products like Nokia’s Ozo get a lot of headlines, but it just doesn’t work for porn, least of all because the Ozo only shoots 30FPS. Oculus Rift is impressive. HTC Vive is amazing. But what I want to see is Apple’s solution; I want to see more Gear VR competitors. Huawei just announced that they’re throwing a hat in that ring. So more of that would be great. Anything that keys consumer uptake, that’s what it’s all about, not just for VR porn, but VR everything and anything. And of course, I want to see the HMDs get better, get to a point where the screen-door effect is gone, and where you’re not feeling silly because you’re essentially wearing ski goggles in the living room. On the tech side, I’m super-excited about foveated rendering, and the possibilities that presents. Once that’s firmly in place, demands on processing power drop, and that makes everything more affordable for the end user.”

The fact that the list of things needed to spur VR adoption seems never-ending is important; it shows how early in its lifecycle virtual reality is presently. However, the level of investment, innovation and adoption by companies and a passionate core audience surpasses anything seen in the early days of mobile. If you are taking a wait-and-see approach to virtual reality, you aren’t alone—there are a whole lot of people who took a wait-and-see approach to mobile for the longest time as well … though many of them are now no longer in business.

Above, the HoloGirlsVR.com booth at the 2016 AVN Adult Entertainment Expo. Photo by JFK/FUBARWebmasters.com