The New York Times touts its VR operation at South by Southwest
AUSTIN, Texas—At the SXSW Interactive festival here in 2014, The New York Times hosted an intimate cocktail hour to drum up buzz for its NYT Now app. In 2015, it threw a party to fete The New York Times Magazine.
Over the weekend at SXSW, there was a Friday-night Times bash with a band, a DJ, an open bar, ping pong and catering from the Austin barbecue hotspot Franklin. From morning to midnight on Saturday, the Times kept the festivities going at the popular downtown beer garden it had commandeered for the occasion, entertaining hundreds upon hundreds of conference-goers and other guests over the course of the two-day affair.
If it seems like the Times went all-out at SXSW this year, that’s not just because it's gotten more hip to the annual tech and media bonanza. Its latest soiree was essentially a big advertisement for the Times’ new slate of virtual reality films, which the Times has been gleefully rolling out since November.
The scene inside the bar was appropriately futuristic, with a gaggle of tipsy attendees checking out NYT VR on Google Cardboard viewers. Outside on the terrace, Times executives and journalists gabbed about VR in a series of panels that overlapped with CEO Mark Thompson’s separate VR presentation at a Hilton a few blocks away.
“Just about every desk is pitching stories on VR,” said Sam Dolnick, an associate digital editor and one of the journalists who sparked the Times’ VR adventure, during one such conversation. “We’re in real time figuring out which stories to do and why.”
“The promise of VR is that nothing gets left out, the viewer gets to be there,” said Times Magazine editor Jake Silverstein. “I keep thinking of it as being like a docent, giving a tour.”
VR hasn’t seen widespread adoption among news and media consumers. A recent study from Horizon Media found that two-thirds of Americans are unaware of VR devices, suggesting that “companies would be well served to walk before they run when incorporating virtual reality activations into marketing plans, at least until the technology reaches greater awareness and scale.”
Likewise, if VR were to become a significant money-maker for the Times—which is in the midst of a journalistic and business transformation as it strives to double its digital revenues to $800 million over the next five years, to offset a decline in print advertising—it arguably has a long way to go.
But if you talk to the people whose job it is to ensure a sustainable future for the Times, you might get the sense that there’s nothing the 165-year-old institution is more excited about.
Over the past year, NYT VR has received perhaps more promotion than any other Times initiative—starting with a splashy debut to the advertising community at last year's Digital Content NewFronts in Manhattan—and it gets lots of love on earnings calls with Wall Street analysts and shareholders. When Times executives trotted out NYT VR at the Consumer Electronics Show in Las Vegas in January, as a person involved in the strategy put it, "They were like rock stars."
At the same time, as the industry is starting to see a critical mass of publishers investing in VR, the Times appears to be emerging as something of a standard-bearer for the medium’s journalistic and financial potential.
“The prize for us as a company, it’s about, can we get right out there on the edge of what’s possible,” Thompson told POLITICO at Friday’s party. “It’s one of the most exciting things, one of the most buzzy things we’ve done.”
To date, the Times has created seven VR films, ranging from a heart-wrenching documentary about children displaced by war, to news coverage of vigils held after the Paris terror attacks, to a feature accompanying this week’s Times Magazine music issue. In November, it sent free Google Cardboard viewers (cheap and easy-to-assemble VR headsets that work with smartphones), to 1.3 million weekend print subscribers. The NYT VR app has racked up more than 500,000 downloads and the films have been streamed more than 1.5 million times.
Additionally, the Times has created or helped create six VR films for brands including Mini and GE, which shelled out roughly $1.5 million for their inaugural campaigns. (The price tag was acknowledged during Thompson's SXSW interview with Times media columnist Jim Rutenberg on Saturday.)
Sources familiar with the rates said GE and Mini were on the high end, with the other campaigns ranging between $500,000 and $1 million. Back-of-the-envelope math suggests the Times has brought in less than $8 million from VR so far—pocket change in the context of its roughly $400 million in annual digital revenue, but a promising start nonetheless.
“NYT VR is in a great position to popularize a wide range of VR content, and it is showing the path to a number of other print publications that are following them,” said Dario Raciti, director of Zero Code, the VR and gaming arm of media agency OMD.
In addition to the Times, the VR gold rush has attracted legacy outlets including The Wall Street Journal, the Associated Press, ABC News, USA Today, Time Inc., Hearst and Discovery, in addition to new media players like Fusion and Vice.
“The Times has made the biggest splash,” said Justin Hendrix, executive director of NYC Media Lab. His declaration came with a caveat that VR at this point is more of an “experiment” for publishers like the Times as opposed to a silver-bullet business strategy.
Still, Hendrix believes that if the technology becomes more seamless and accessible for consumers over the next few years, VR will find the type of large audience that can lead to significant profits for journalism. He cited a recent Goldman Sachs report projecting VR video entertainment will be a $3.2 billion market by 2025.
“People are figuring out a business model that will let them keep moving forward and experimenting,” he said, “and hopefully when the audience gets there, it will be profitable.”
Thompson shares his cautious optimism.
During his SXSW appearance on Saturday, he predicted that VR technology will "quickly" transform from a "super hi-tech complicated thing" into someting that has an "everyday quality to it." He talked up the prospect of doing VR with a battle-hardened war correspondent like C.J. Chivers "on the ground in very difficult stories," or using it to document "big rallies" like the presidential primary campaigns or the protests in Ferguson, Mo. He said that if the Times can "find the right partners" there is "significant revenue" to be had.
"I don’t know how big VR becomes," said Thompson. "We're spending a lot more on it this year than last year. There's plenty more for us to experiment with…I definitely see plenty more creative applications for VR. But the way I think about this is, our job as an organization—we’ve been telling journalistic stories since the 1850's. We want to be out there on the frontier."